Form 926 Reporting Transfers to Foreign Corporations: Avoiding Harsh Penalties

Ensuring Consistency Between FATCA, FBAR, Form 5471 and Other Foreign Asset Forms

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


Conducted on Tuesday, August 30, 2016

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax advisers and compliance professionals with a comprehensive guide to reporting contributions to foreign corporations. The panel will identify the types of transactions that trigger Form 926 reporting obligations, discuss filing thresholds and information required to be reported on Form 926. The webinar will also cover the relationship and cross-referencing between Form 926 and other required foreign information filings, and detail the penalty regime for failure to report contributions on Form 926.

Description

Section 6038 requires U.S. persons to make an information report to the IRS when making certain transfers of property to non-U.S. corporations in certain “non-recognition” transactions, as specified in Section 367. While the Code Section and regulatory guidance is intended to prevent taxpayers from shifting appreciated property to foreign jurisdictions to avoid tax, the reporting requirements apply whether or not the transferred asset has appreciated in value.

Taxpayers making these transfers must file Form 926 and include the form with their individual income tax return. The filing requirements apply for both cash and tangible personal property, if the transfers involve amounts over the statutory threshold and the transferor holds more than 10% vote or value of the foreign corporation.

The information required on Form 926 is extensive, and the penalties for noncompliance are harsh, up to 10% of the market value of the asset transferred. Additionally, the IRS is utilizing Form 926 to verify consistency with other foreign reporting requirements, so a failure to file a complete and accurate Form 926 can result in other tax consequences—such as FATCA penalties—as the IRS cross-checks information, as well as extending the statute of limitation until the reporting is complete.

Listen as our experienced panel provides a thorough and practical guide to completing Form 926 to report property contributions to foreign corporations.

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Outline

  1. Transactions requiring Form 926 reporting
  2. What must be reported on Form 926
  3. Special issues related to partnerships and hedge funds
  4. Penalties for noncompliance

Benefits

The panel will discuss these and other important issues:

  • What are the thresholds for Form 926 reporting?
  • What are the Form 926 reporting requirements when a partnership transfers property to a foreign corporation?
  • What are the challenges of completing Part III, Information Regarding Transfer of Property, and how does Part III intersect with Form 5471 and TD F 90-22.1?
  • What are the calculations required to complete Part IV, Additional Information Regarding Transfer of Property?

Faculty

Dougherty, Alison
Alison N. Dougherty, J.D., LL.M.

Senior Manager
Aronson

Ms. Dougherty has extensive experience assisting clients with U.S. tax reporting and compliance for offshore assets and...  |  Read More

Mark C. Peltz
Mark C. Peltz

Principal
WeiserMazars

Mr. Peltz specializes in tax planning and research for corporate and high net worth individuals, foreign tax...  |  Read More

Hunter Norton
Hunter Norton
Tax Director
Farkouh Furman & Faccio

Mr. Norton's areas of expertise include business and investment partnerships, cross-border tax matters, high...  |  Read More

Eric Swerdlow, CPA
Eric Swerdlow, CPA
Tax Manager
Farkouh Furman & Faccio

Mr. Swerdlow is experienced in tax planning, research, and the supervision & review of staff work in a wide array...  |  Read More

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