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us form 5471 instructions

Get the us form 5471 instructions 2019-2020

I Beginning of annual accounting period Cat. No. 49958V ii End of annual Form 5471 Rev. 12-2015 Page 2 Schedule B U.S. Shareholders of Foreign Corporation see instructions number of shareholder shareholder. Defined in section 989 b and the related regulations see instructions Enter exchange rate used for line 5d e f g h 5a Schedule I 5b 5c 5d Summary of Shareholder s Income From Foreign Corporation see instructions If item E on page 1 is completed a separate Schedule I must be filed for each...
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Options for Delinquent FBARs and U.S. Foreign Reporting Forms

This week’s post from our CPA guest blog series comes to us again from Alison N. Dougherty, a Senior Manager in tax at 5471, etc. This procedure actually replaces IRS OVDP FAQs # 17 and 18, which are no longer in effect.

If some or all of the taxable income was not reported and the failure to file was due to non-willful conduct, there are two main options. First, the IRS has new Streamlined Offshore filing compliance procedures that allow taxpayers to file three years of amended U.S. Federal tax returns and six years of Foreign Bank Account Reports. The cost of the filing is a 5% Streamlined Offshore penalty plus additional tax and interest on the tax due with the amended tax returns. There is some risk of audit with a Streamlined Offshore filing, but the IRS will not impose the civil failure to file penalties, which is $10,000 USD per form per year unless there is evidence of fraud on the original Federal tax returns. Second, there is the quiet disclosure option to which the IRS is opposed and which invites audit risk for all open years including the risk of all applicable penalties being imposed. If the U.S. foreign reporting forms were required but were not filed, the statute of limitations will still be open on the prior year Federal tax return.

If the failure to file the U.S. foreign reporting forms was due to intentional or willful conduct, then the main option is the IRS Offshore Voluntary Disclosure Program (OVDP). In 2014, the IRS extended the amnesty available under the protection of the OVDP. The cost of the filing is a 27.5% Offshore penalty which in some circumstances could be higher if the U.S. taxpayer has foreign accounts with a foreign financial institution identified on a specific list by the U.S. Government. The main incentive offered with the OVDP is protection from criminal prosecution and possible imprisonment as a penalty for intentional or willful delinquencies.

Alison N. Dougherty
Senior Manager
Aronson LLC
805 King Farm Blvd, Suite 300
Rockville, MD 20850
adougherty@aronsonllc.com
Direct Line (301) 231-6290
Main Line (301) 231-6200
Fax (301) 231-7630

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today were talking about forum 54 71 mm-hm but if were going to talk about that forum the first thing we need to talk about is CFCs great or controlled foreign corporations right controlled foreign corporations and this is where you know this is Im going to go over some terms that the first time I heard him I definitely my eyes glazed over and maybe the tenth time I heard of my eyes glazed over so it takes a while to break things down okay so lets back off a little bit well just say controlled foreign corporations those are three words we can put together without too much confusion right so what is a you know whats a corporation well its a corporation actually mmm that know that lets just say entity foreign means offshore and controlled means foe controlled by 50 percent or more of a US person okay okay so theres a controlled foreign corporation now why the heck is it important I think is the real question to ask what does it mean why would you care why do you want to avoid it and it all comes down and if were going to talk about and were talking about international taxation and if were going to talk about international taxation we shouldnt go any further if were if were not going to talk about deferral okay so this is one of the terms that may cause you to glaze over as it did to me the first time I heard about this and so many years ago so deferral is the game of all international tax planning thats what youre trying to do when you move things off short typically okay for a tax planning for tax planning purposes trying to reduce your tax if youre looking to avoid taxes the whole thing you do it is to defer taxes so that whatever grows overseas grows tax-free just like a 401k exactly and so then the question is look why dont you just use a 401k and then stead of going through all these things well because you make too much money you dont qualify so for a lot or and the investment might not be what youre really looking to do to then you know the 401k is only going to be in certain things youre not going to be able to do you know a smaller medium-sized business that you know the business really well exactly so thats what youre trying to do deferring your income means it can grow tax and just some basic calculations on the differences of it so lets just say that you have an 8 return a year and its allowed to grow tax-free and you start with 100000 okay at the end youd have three hundred forty thousand dollars and thats after thirty years thats after thirty years now of course what if now and its when you repatriate the money bring it back to the US is what it becomes taxable okay so that three forty there would be tax due on the principle if you were bringing the whole thing back in one year which most people wouldnt do right to the US compare that if if if you were now that eight percent is only yielding you 5 after-tax which is a pretty fair assumption at the end youll have to you have two hundred fifty thousand dollars okay okay but at least...