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Mastering Form 5472: Filing Requirements for Foreign Individuals, LLCs, and Companies

Meeting Information Return Requirements for Foreign-Owned Disregarded Entities and 25%-Foreign-Owned U.S. Corporations

Note: CLE credit is not offered on this program

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

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Conducted on Tuesday, August 22, 2023

Recorded event now available

or call 1-800-926-7926

This course will provide tax advisers with a thorough and practical guide to completing Form 5472, focusing on the impact of IRS regulations requiring 5472 reporting by disregarded entities (DREs) with foreign owners. The panel will provide line-by-line guidance on completing the form, define complex concepts, and discuss the impact of IRS rules expanding filing requirements.

Description

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 require a reporting corporation to disclose specified reportable transactions 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.

Through attribution rules, foreign persons owning a U.S. domestic DRE, either directly or indirectly, 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 discussing the expanded filing requirements.

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Outline

  1. Statutory provisions of IRC 6038A and 6038C
  2. Key definitions under statutory provisions and regulations
    1. Reporting corporations
    2. Reportable transactions
    3. Related parties
  3. Regulations (TD 9796) requiring foreign-owned DREs to file Form 5472
  4. Corporate Transparency Act
  5. Completing the form
  6. Penalties and penalty abatement provisions

Benefits

The panel will discuss these and other vital issues:

  • What entities and individuals are subject to Form 5472 filing requirements?
  • Identifying essential elements of IRC 6038A and 6038C to determine definitions of transactions to report
  • Line-by-line guidance on completing Form 5472
  • Steps that foreign individuals owning DREs operating in the U.S. must take to fulfill filing requirements
  • Penalty abatement and mitigation provisions

Faculty

Fincher, Heather
Heather K.P. Fincher
Attorney
Kostelanetz

Ms. Fincher advises multinational businesses and high-net-worth individuals on US federal income tax matters, with a...  |  Read More

Russell, Robert
Robert Russell
Senior Counsel
Rutan & Tucker

Mr. Russell represents businesses and individuals in a wide-range of tax matters. He provides tax planning, tax...  |  Read More

Samtoy, John
John Samtoy
Tax Partner
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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