Form 5472 Compliance for U.S. Corporations, Foreign Corporations, and Disregarded Entities

Author: John Samtoy

The Form 5472, “Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business”, filing requirements have expanded in recent years. With the expanded filing requirements have come an increased penalty from $10,000 per failure to file to $25,000 per failure to file. It is therefore critical for businesses, investors, and their professional advisors to be able to identify the Form 5472 filing requirements and ensure that forms are filed accurately.

The filing originally targeted, as the name of the form suggests, corporate entities that were foreign owned. The requirements have been expanded to include foreign owned U.S. disregarded entities such as single member LLCs. These new filing requirements expand the scope of the Form 5472 significantly.

The Form 5472 now also includes additional sections to gather information relevant to some of the new tax reform provisions. These new section include information on the new base erosion and anti-abuse tax (“BEAT”) as well as foreign derived intangible income (“FDII”). During this course you will learn how to complete these sections of the Form 5472 and what the IRS is looking for.

Publication Date: May 2021

Designed For
CPAs, enrolled agents, tax preparers, attorneys and advisors who assist their clients with identifying these filings, internal tax staff and tax directors.

Topics Covered

• What the IRS is looking for on the Form 5472 and how the information may be used
• The Form 5472 filing requirements
• Expanded reporting rules applicable to disregarded entities
• The attribution rules, how they affect Form 5472 filing requirements, and application of the rules to related entities
• Exceptions to filing Form 5472 that may apply
• Completing the Form 5472 including the new sections on BEAT and FDII
• Penalties related to Form 5472 and potential remediation options

Learning Objectives

• Identify when Form 5472 is required for both corporate and disregarded entities by applying the attribution rules and exceptions
• Identify how to complete the Form 5472 accurately
• Recognize the impact of the information reported on the Form 5472 and how the IRS will use it
• Describe the attributes of Form 5472
• Differentiate the Parts of Form 5472
• Recognize which form a related corporation that qualifies as a foreign sales corporation for the tax year file in order to be exempt from Filing Form 5472
• Describe provisions in Form 5472 and how they apply to your client
• Recognize how the BEAT applies to applicable taxpayers
• Describe how resisting new global disclosure standards provides and an array of secrecy and tax-free facilities for non-residents at federal and state levels, notably in which state
• Identify which Internal Revenue Code section of where the attribution rules used in determining whether a party is a related party can be found
• Recognize when EINs requested on Form SS-4 will be required to have an individual with a SSN or ITIN to be the responsible party begins
• Identify which form US person controlling a foreign related corporation file
• Recognize which Internal Revenue Code sections addresses the denial of deductions for hybrid transactions
• Describe the U.S. Corporate Tax Rate applicable to Foreign Derived Intangible Income
• Recognize the penalty for a failure to file Form 5472
• Differentiate which Parts of Form 54722 should be utilized

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None