Form 5471 for Interests in Foreign Entities After Tax Reform

New Schedules, Determining Ownership Share and Correct Filing Status

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, June 12, 2019

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax advisers with a practical guide to completing the new Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations. The panel will detail the significant changes made to Form 5471 in light of the 2017 tax overhaul legislation. The webinar will discuss correctly identifying taxpayer categories, focusing on taxpayers with new filing duties, and will offer approaches on avoiding severe, but common, mistakes in completing the form.

Description

Form 5471 Information Return of U.S. Persons With Respect to Certain Foreign Corporations has long been one of the most complex reporting obligations in the U.S. offshore information tax reporting regime, and the 2017 legislation created additional challenges, increasing both the amount of information required and the number of U.S. taxpayers obligated to file. Failure to file a "substantially complete" Form 5471, absent reasonable cause, exposes the taxpayer to severe monetary and other penalties, beginning at $10,000 per year per missed form.

Filing Form 5471 requires data reporting from simple to highly intricate. Correctly completing the form involves hours of intensive work, including proper recordkeeping and data analysis. U.S. individuals and entities that own, acquire or dispose of shares of a foreign corporation may be required to file Form 5471 with their income tax returns. U.S. officers and directors of these foreign corporations may also have reporting responsibility.

Foreign corporation attribution rule changes under tax reform further complicate compliance. The law alters the definition of U.S. shareholder for purposes of information-filing duties, and some taxpayers will face new disclosure obligations for their foreign-sourced assets.

Listen as our panel of veteran advisers identifies and explains the more difficult aspects of preparing Form 5471 for U.S. owned foreign corporations. The panel will outline approaches to help you accurately identify taxpayer reporting categories, determine relevant direct, indirect and constructive ownership interests, identify common compliance mistakes, and stay ahead of IRS examination issues.

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Outline

  1. Purpose of Form 5471
  2. Who is required to file
  3. Tax reform changes to attribution rules and definition of U.S. shareholder
  4. Preparation of Form 5471
  5. New schedules added by 2017 tax reform law
  6. IRS enforcement and audit environment to date
    1. Background on Form 5471 penalties
    2. Penalty structure for Form 5471
    3. Use of Form 5471 as an IRS audit tool

Benefits

The panel will review these and other crucial concepts:

  • Understand the purpose of Form 5471, the categories of U.S. persons required to file, and reporting requirements
  • How 2017 tax law changes to attribution rules and the definition of U.S. shareholder likely increases the number of U.S. taxpayers required to file Form 54712
  • New schedules added to Form 5471 by the 2017 tax reform law
  • Grasp U.S. international tax reporting rules and obligations of U.S. persons with interests in foreign corporations
  • Avoid errors and audit red flags for the Service when reviewing Form 5471

Faculty

Dougherty, Alison
Alison N. Dougherty, J.D., LL.M.
Director, Tax Services
Aronson

Ms. Dougherty specializes in U.S. international tax reporting, compliance, consulting, planning, and structuring as a...  |  Read More

Samtoy, John
John Samtoy

Tax Principal
Holthouse Carlin & Van Trigt

Mr. Samtoy’s practice specializes in international tax compliance and consulting services, with a focus on...  |  Read More

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