IRS proposes Form 5472 filing duty for foreign-owned disregarded entities

Resource Information

The work IRS proposes Form 5472 filing duty for foreign-owned disregarded entities represents a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation. This resource is a combination of several types including: Work, Language Material, Continuing Resources.

Label

IRS proposes Form 5472 filing duty for foreign-owned disregarded entities

Creator

• Sheppard, H.E

Subject

• FATCA
• banking
• disregarded entity
• limited liability company
• penalties

Language

eng

Summary

The U.S. government, fed up with international tax evasion, has taken significant steps in recent years to curb the problem. Among the most notorious of these steps was the enactment of the Foreign Account Tax Compliance Act (FATCA), which effectively forces foreign financial institutions to provide the IRS with valuable data about U.S. clients. International organizations have pointed out a flaw with these efforts: while occupied pressuring others to surrender client data, the U.S. government supposedly has failed to keep its own house in order. The major criticism is that, as a result of gaps in U.S. tax law, foreigners can easily hide money in the United States by utilizing a domestic, single-member, limited liability company, treated as a disregarded entity (DRE) for federal tax purposes. In an effort to halt this practice, the IRS issued proposed regulations in May 2016 (Proposed Regulations) that would obligate foreign-owned, single-member, domestic DREs to file annual Forms 5472 (Information Return of a 25-percent-Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business) with the IRS. This article explores important aspects and consequences of the Proposed Regulations

Citation source

In: International tax journal. - Chicago. - Vol. 42 (2016), no. 4 (July-August) ; p. 17-32

Geographic coverage

North America

Language note

English