Call us: 888.727.8796
Tax problems solved.
No matter where in the world you are.

The benefits of using IRS streamlined disclosure program for missing or incorrect Form 5471s

 

 

IRS Report of Foreign Bank Account (FBAR) penalties are so outrageous, they take the breath out of the room. But there are other, lesser known penalties that could devastate an international entrepreneur, or even a US retiree living abroad. These are Form 5471 penalties.

 

What are Form 5471 penalties?

IRS Form 5471 is a form that US owners of certain foreign corporations need to file. Failure to file can result in a $10,000 penalty -- per occurrence. And, the statute of limitations on assessment is much longer than people realize.

 

In a recent case, the IRS assessed twelve(!) Form 5471 penalties against a Canadian consultant who did business under a Canadian corporation. This resulted in a $120,000 tax penalty. A tax penalty that Canada actually helped the IRS collect.

 

The Streamlined Program is designed to lessen the risk of Form 5471 penalties. It created not just FBAR amnesty, but also Form 5471 amnesty. 

 

Do your missing or incorrect Form 5471s qualify for the Streamlined Program?

The question we are concerned with is - "Did you know that you had a Form 5471 filing requirement?"  Your subjective intent is the critical issue. For this, we recommend that you speak with us. Remember, every one of our offshore clients made some sort of mistake. Yet, many mistakes are not large enough to make someone ineligible for the Streamlined program.

 

If you don't qualify for the Streamlined Program, the Full Offshore Disclosure Program is still available. We just prefer the Streamlined program because in terms of time and cost, it is much, much less onerous for our clients.

 

It is critical you don't make assumptions about yourself, but relay your situation to one of our experienced disclosure attorneys.

 

The Benefits of the Streamlined OVDP for missing or incorrect Form 5471s

  • Only three years of Form 5471s are required. Follow the program rules and the IRS is not interested in going back further than that three years.
  • No penalty for filers who live outside the US.
  • A 5% penalty on stock value for those living in the US. Yet there are many way to legitmately claim a low valuation of your controlled foreign corporation.
  • A much quicker process than full OVDP.
  • You'll learn how to properly file Form 5471s going forward.
  • Any other missing forms can all too be included in a Streamlined Disclosure. For example: missing Forms 8938, 8865, 3520, 3520A (foreign pensions), and 8621

 

If you would like to speak to us regarding your Form 5471 issue to understand the best disclosure options for your specific situation, contact us. We can help. Call us at 888-727-8796 or email info@irsmedic.com.  Any information you share with us will be kept confidential. 


Categories


Related articles

Canada collects $120,000 in Form 5471 penalties for the IRS
Form 5471 and Dormant Foreign Corporations
Help for when the IRS audits your Streamlined Diclosure
Offshore Voluntary Disclosure Program Q & A
EMPLOYMENT PRIVACY POLICY DISCLAIMER
© 2020 Parent and Parent LLP All rights reserved.
Parent and Parent LLP, 144 South Main Street, Wallingford, CT 06492,
Tel. +1.203.269.6699 Fax +1.203.269.0385
IRS Medic: Parent & Parent, LLP
144 South Main Street Wallingford, CT 06492
Phone: (203) 269-6699