Regulations tightening Form 5472 filing requirements are finalized

By Sally P. Schreiber, J.D.

Final regulations issued by the IRS on Wednesday (T.D. 9707) remove the provision allowing Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business, to be timely filed separately from the corporation’s tax return if that return is filed late. The regulations finalize proposed rules issued in June (REG-114942-14) without substantive change.

Under the final regulations, Form 5472 is now required to be filed in all cases only with the filer’s income tax return by the due date (including extensions) of that return. This brings the Form 5472 filing requirements into line with those for Forms 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, and 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, for which there is no provision for timely filing of the form separate from the taxpayer’s tax return.

A corporation that fails to file Form 5472 by the due date may be assessed a penalty of $10,000 for each tax year for which a failure occurs. If the failure to file the form continues for more than 90 days after the IRS mails the corporation a notice of its failure to file, the IRS can impose an additional $10,000 penalty for each 30-day period (or part of a 30-day period) in which the company fails to provide the information (Sec. 6038A(d)(2)).

Sally P. Schreiber is a JofA senior editor.

SPONSORED REPORT

How the election may affect taxation of business income

This report summarizes recent proposals to reform the U.S. business income tax system and considers the path to enactment of any such legislation.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

Did you follow 2016’s biggest accounting news?

CPAs will remember 2016 as a year of new standards and new faces. How well did you follow the biggest accounting events? The 7 questions in this quiz will help you find out