Form 5472 – Everything You Need To Know (Part II)

Last week’s blog post covered some basics about Form 5472, including how the Form helps the US Internal Revenue Service (IRS) learn about foreign-owned businesses in the US and when to audit them, the meanings of certain terms such as what is meant by a “reportable transaction” with a “related party”, and the situation requiring filing of the Form by a US company that is at least 25% owned by non-US shareholders that has such a reportable transaction.  Today’s blog post will cover the situation requiring filing of the Form by single member US LLCs with foreign owners (including the potentially troublesome EIN issue), and by foreign companies that are “engaged in a US trade or business”. It will discuss the penalties for noncompliance and finally, the surprises that can occur if a foreign jurisdiction’s community property rules come into play. Form 5472 is here and Instructions to Form…

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