Post a new topic
    4 Replies Latest reply on Oct 4, 2009 7:45 PM by rp4232

    IRS Form 5472

    rp4232 Newbie
      I am totally confused with form 5472, A person owns 100% of an US 1120 Corporation, he is the sole shareholder. He is a citizen of the UK. I have declared him a foreign person owner because he owns more than 25% of the corporation and more than 50% of the voting power.

      Under question 5 of schedule K, no SS number, I listed his corporation ID. Should I list no ID or his corporation # is okay? Back to form 5472. I notice no transfers or payments to the foreign owner, however the company does a small amount of business (less than 2%) with the company that the Owner of the corporation works for. Also, I notice a long term liability account with this company, along with a deposit of funds from the company. These transactions appears to be a loan between the foreign company and the US corporation, however the corporation is not the owner of the US company only the sole shareholder. I am unaware if the Owner of the US corporation owns or have shares in the UK corporation. The US corporation had a loss in both years of operations.


      After reviewing form 5472, I noticed that you do not have to file if monetary related or non-related transactions occurred between the foreign owner and the corporation.


      I am concerned with the relationship between the foreign owner and the corporation the assist the US corporation with capital.
      What questions should I be concerned with the foreign owner to prove relationship and if any transactions are reportable. The owner only investment is a $1,000 to start the US corporation.


      I have also noticed the penalty for this form is very steep for not filing the form correctly and also timely. Another concern I have is the two years that I am preparing is 2007 and 2008 returns and no extensions was filed. Would the IRS consider the 5472 as being late and apply the $10,000 file if we are just filing for the two years above.


      I am very interested in filing this form out correctly with-out any liability. It appears to me, because no monetary transactions were made between the US Corporation and the foreign owner, we do not have to file form 5472.
        • Re: IRS Form 5472
          LUCKIEST Guide
          IRS Form 5472, We;come

          Who are you?? Go to Members page and share some info.

          Do you have a Lawyer?? an Accountant??
          <!--Session data-->
            • Re: IRS Form 5472
              rp4232 Newbie
              I am an accountant with 10 years experience with small business accounting, tax preparation and financial systems consulting. I bank and use BOA for my small business clients. This is the 1st time I came across form 5472. The form is very vaque and confusing with the reporting requirements. My client had no monetary transaction with the company, when he started the company 1,000 shares was allocated to start the corporation. He works for a company in the UK that buys a small percentage of product from his company. I am unaware if he is a shareholder of the company. The company also loaned the US corporation start up money, however they do no own shares in the company, my client owns 100% of the shares. It appears that I may not have to fill this form out, I am interested in preparing the form correctly, this form carries a very large penalty for not filing or filing the form out correctly $10,000. I am also wondering if a penalty would be access because these returns are for 2007 and 2008.
            • Re: IRS Form 5472
              phanio Pioneer
              Have you tried the IRS's website - tons of information there and instructions for these forms? Also, you should be able to call and set an appointment (by phone or in person) with a local IRS office - they should be able to answer your questions.

              Business Money Today