E-Alert
July 21 , 2009
$10,000 Late Filing Penalty on Form 5471 Late Filings
As a general rule, a Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, must be attached to the annual tax return of a US citizen or resident who serves as an officer or director in a foreign entity in which that person owns more than 10%.
Recently, the IRS began a program to automatically assess a $10,000 penalty for each late filed Form 5471 with related forms in the 1120 (corporation) series.
To make matters worse, late filing penalties will also be assessed for the Form 1120, even when no tax is due. IRS Service Centers will initially send the taxpayer a Notice to Respond in which the taxpayer can respond with a reasonable cause penalty/waiver request. If Form 1120 was filed without the required Form 5471, please contact our office so the requisite course of action can be taken.
If you have any questions regarding the information in this article, or have any other issues you would like to discuss, please feel free to contact the DZH Phillips tax department at 415.781.2500 or email cpas@dzhphillips.com.
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DZH Phillips LLP is one of the leading public accounting and strategic consulting firms in the San Francisco Bay Area. We provide the long-term relationships, industry expertise, and consistently high-quality service our clients need to make the right decisions today and in the future.
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