On August 3, 2021, Henry Stow Lovejoy participates in a webinar entitled “Mastering Form 5472: Filing Requirements for Foreign Individuals, LLCs, and Companies” for Strafford Publications.
Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business, is one of the most complicated forms of all U.S. filing requirements concerning foreign persons. Initially, the reporting obligations applied to corporations only; now the requirements extend to DREs active in the U.S. owned by non-U.S. individuals and corporations.
IRC 6038A, IRC 6038C, and the regulations thereunder require a “reporting corporation” to disclose specified “reportable transactions” it has with any “related parties” on Form 5472. Defining these elements is highly sophisticated, so tax advisers must have a thorough grasp of each aspect to ensure that the taxpayer has disclosed all reportable transactions and met the record maintenance requirements to support its tax position for these transactions.
In response to scenarios in which foreign individuals and corporations were conducting business in the U.S. through DREs to avoid information reporting, the Service now requires foreign-owned single-member LLCs and other DREs to file Form 5472.
Foreign persons owning a U.S. domestic DRE, either directly or indirectly through attribution rules, must obtain necessary taxpayer-identification numbers and disclose reportable transactions. Penalties for failing to file Form 5472 are $25,000 per failure, with complicated rules for penalty mitigation.
Listen as our experienced panel provides a thorough and practical guide to completing Form 5472, including key definitions and a discussion of the expanded filing requirements.
Henry Stow Lovejoy, Kostelanetz & Fink, LLP
John Samtoy, Holthouse Carlin & Van Trigt LLP
Click here for more information and to register.