Substantially Completed Form 5471 is Required to be Filed

- By : Parag Patel

…failures, an initial penalty of $10,000 per Form 5471 per year may be assessed. (Code Sec. 6038(b)(1)) In addition, a continuation penalty of $10,000 per Form 5471 per year may…

IRS Announces Increased Enforcement on Form 5471

- By : Parag Patel

…Forms 5471 by US shareholders of controlled foreign corporations (CFCs) rather than attaching the form to the accompanying tax returns, so-called “loose-filed Forms 5471.” The loose-filed Form 5471 campaign seeks…

The IRS Large Business and International division (LB&I) has announced a new Loose Filed Forms 5471 compliance enforcement campaign

- By : Parag Patel

The new Loose Filed Forms 5471 targeted enforcement campaign was identified through LB&I data analysis and suggestions from IRS employees. IRS employees likely received many Loose Filed Forms 5471 that…

Large Penalties: Form 5471 Information Return of U.S. Persons With Respect to Certain Foreign Corporations

- By : Parag Patel

…$10,000 for each Form 5471 that is filed after the due date of the associated income tax return, including any extensions. Penalties on late-filed Forms 5471 are systemically assessed, resulting…

Delinquent or unfiled IRS Form 5471

- By : Parag Patel

…of foreign (non-U.S.) financial accounts and their related incomes. Beware: As of January 1, 2009, the IRS began to automatically assert the $10,000 penalty on late filed Forms 5471. Due…

Complicated Form 5471 filing requirements simplified for dormant foreign corporations

- By : Parag Patel

…liabilities) did not exceed $100,000 No distributions were made by the foreign corporation; and The foreign corporation either had no current or accumulated earnings and profits or had only de…

Full Analysis of Updated 2012 OVDP Program

- By : Parag Patel

…penalties of up to $10,000 per foreign corporation per year (plus other sanctions) for failure to timely and correctly file Form 5471. Additionally, failure to comply with the FBAR reporting…

New IRS practice unit: “Substantial compliance” doctrine, international information return penalties

- By : Parag Patel

…a $10,000 penalty when certain forms are filed late, substantially incomplete, or not filed at all. Though the IPU specifically relates to Form 5471, Form 5472 is subject to the…

2018 ABA COMMENTS ON THE OFFSHORE VOLUNTARY DISCLOSURE PROGRAM AND THE STREAMLINED PROGRAMS

- By : Parag Patel

…and if so, on What Terms. The various iterations of the OVDP were very successful, bringing nearly 60,000 taxpayers into compliance and generating more than $11.1 billion in taxes, interest…

Method to Cure Delinquent or Incomplete Foreign Information Returns Without Penalties

- By : Parag Patel

…up to $10,000 and the penalty for a willful failure is the greater of $100,000 or 50 percent of the account balance. The various international-related information reporting rpenalties are also…

Protective Filing of Information Returns

- By : Parag Patel

…thresholds range from a low of $50,000 to a high of $600,000. It is advantageous to make a “protective” filing of tax returns or information returns. The primary reason is…

New IRS internal procedure guidance for Streamline Filing Compliance Procedures

- By : Parag Patel

…(Forms 3520, 3520-A, 5471, 5472, 8938, 926, or 8621) by e-mailing the CIS ID number to “*LB&I OVDP Compliance” with an explanation that the case is being forwarded due to…

New IRS Disclosure Program Announced for Non-Resident Taxpayers: Streamlined Foreign Offshore Procedures

- By : Parag Patel

…Income Tax Return, together with the required information returns (e.g., Forms 3520, 5471, and 8938) even if these information returns would normally be filed separately from the Form 1040 had…

New Streamlined Domestic Offshore Procedures (SDOP) is a Game Changer

- By : Parag Patel

…U.S. law, and may have failed to file an FBAR (FinCEN Form 114, previously Form TD F 90-22.1) and/or one or more international information returns (e.g., Forms 3520, 3520-A, 5471,…

The Risks of “Opting Out” of OVDI

- By : Parag Patel

…required to report information under IRC §§ 6035, 6038 and 6046.The penalty for failing to file each one of these information returns is $10,000, with an additional $10,000 added for…

Caution: Foreign Businesses Require Additional Reporting

- By : Parag Patel

…CFCs are subject to potentially complex U.S. tax reporting requirements and, at a minimum, must file U.S. tax Form 5471 every year, whether or not the business is profitable. Even…

Beware of Overlooked Common Overseas Tax Forms

- By : Parag Patel

…the highest value reached during the year and on the last day of the year. These thresholds range from a low of $50,000 to a high of $600,000. Other Overseas…

The Misunderstood Extension of time to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR)

- By : Parag Patel

…person with an interest in, or signature or other authority over, one or more foreign financial accounts whose aggregate value exceeds $10,000 at any time during a calendar year is…

The New IRS Voluntary Disclosure Practice: Not a Good Deal for Noncompliant Taxpayers

- By : Parag Patel

…persuasively argue for such reduced penalty; Willful FBAR penalties (greater of $100,000 or 50% of the amount in the account at the time of the violation) will be asserted in…

The IRS is Hiring: Expect New Enforcement

- By : Parag Patel

…will be more audits with respect to Forms 5471 (owners of a foreign corporation), 3520/3520A (owners and beneficiaries of foreign trusts), 8621 (PFICs, including foreign mutual funds) and 8865 (owners…

2011 Offshore Voluntary Disclosure Initiative (OVDI)

- By : Parag Patel

…from IRS. Our law firm can assist. 2011 OVDI General Information from IRS 02.08.2011 IRS News Release introducing the 2011 OVDI Commissioner Douglas Shulman’s Statement 02.08.2011 announcing the 2011 OVDI…

IRS Releases FAQs for the Delinquent International Information Return Submission Procedures

- By : Parag Patel

…penalty for the failure to file the delinquent Forms 5471 and 3520 if there are no under-reported tax liabilities and you have not previously been contacted regarding an income tax…

A solution in a tough tax season: the IRS Streamlined Offshore Procedures

- By : Parag Patel

…returns (e.g., Forms 3520, 3520-A, 5471, 5472, 8938, 926, and 8621) for the foreign financial asset; and (4) these failures resulted from non-willful conduct. To be eligible for the streamlined…

Foreign bank account reports (FBARs) and the 2011 Offshore Voluntary Disclosure Initiative (2011 OVDI)

- By : Parag Patel

…such account. The IRS previously extended to June 30, 2011, the FBAR filing due date for such persons for 2009 and earlier calendar years. (Notice 2009-62 (8/7/09), Notice 2010-23 (2/26/2010))….

More Tax Complexity: New Form 8938

- By : Parag Patel

…$50,000 Highest Aggregate Value at Any Time During the Year: $100,000 Filing Status: Married Filing Joint Aggregate Value at Year End: $100,000 Highest Aggregate Value at Any Time During the…

New Extended Deadline for OVDI

- By : Parag Patel

…necessary actions that must occur by September 9th, including information to be submitted to the Criminal Investigation office, as well as submitting a request for a 90-day extension to provide…

Checklist of tax forms for taxpayers with foreign assets

- By : Parag Patel

…of Foreign Financial Assets — This is a new tax form that is expected to be required for anyone with more than $50,000 in foreign financial assets in 2010. A…

Instructions for New Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer U.S. Taxpayers

- By : Parag Patel

…information returns (e.g. Form 3520 or 5471), for the past three years and to file delinquent FBARs (Form TD F 90-22.1) for the past six years. Payment for the tax…

Taxpayers’ Evidence of Non-Willfulness or Willfulness Factors

- By : Parag Patel

…information returns, such as a Form 5471? — POAs as substitute for account holder/beneficial owner — full compliance after notification from bank of reporting requirements — actions on closure of…

Below is a List of Common Forms Applicable in Compliance Requirements for U.S. Citizens and Residents with Foreign Assets, Trusts, and Entities

- By : Parag Patel

…Specified Foreign Financial Assets Foreign Trusts Reporting Forms Form 3520-A Annual Information Return of Foreign Trust With a U.S. Owner Form 3520 Annual Return to Report Transactions With Foreign Trusts…