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.
