Form 5471 Compliance after Tax Reform (Currently Unavailable)
Author: John Samtoy
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
A guide to completing the increasingly complex Form 5471 including identifying filing requirements and reporting of foreign taxes, earnings and profits, GILTI information, and previously taxed income.
Reporting requirements for the Form 5471, “Information Return of U.S. Persons with Respect to Certain Foreign Corporations”, have expanded significantly since tax reform legislation was passed in late 2017. The volume of information required to be reported, the complexity of the information reported, and the scope of U.S. taxpayers obligated to file the form have all increased.
It is critical for U.S. taxpayers and their advisors to understand the Form 5471 filing and reporting requirements. A missed or substantially incomplete Form 5471 filing may lead to penalties starting at $10,000 per missed or incomplete form per year.
Since tax reform, the reporting on Form 5471 has expanded to include detailed information on foreign tax payments and current earnings and profits. Entirely new schedules were added that require information for Global Intangible Low Taxed Income (“GILTI”) and previous taxed income (“PTI”). In addition, technical questions on the Form 5471 now target information related to tax reform provisions including potentially disallowed hybrid payments and foreign derived intangible income (“FDII”).
The December 2020 revision to the form for instance added two new schedules (Schedule Q and Schedule R). Schedule Q is used to report CFC income by income groups. Schedule R is used to report information related to distributions from foreign corporations. The December 2020 revision also expanded the filing categories to address limited filing requirements available to certain taxpayers that were addressed in Rev. Proc 2019-40. These changes add clarity but also increase the compliance burden and complexity of completing the Form 5471.
During this course you will learn how to identify Form 5471 filing requirements and complete the required Form 5471 schedules accurately.
Publication Date: June 2021
Designed For
CPAs, enrolled agents, tax preparers, attorneys and advisors who assist their clients with identifying these filings, internal tax staff and tax directors.
Topics Covered
- Overview and Background
- Filing Requirements
- Attribution and Control
- Exceptions to Filing
- Completing the Form
Learning Objectives
- Identify filing requirements and reporting of foreign taxes, earnings and profits, GILTI information, and previously taxed income
- Identify when Form 5471 is required by applying the attribution rules and exceptions
- Recognize how to accurately complete Form 5471
- Recognize which IRS Form is an important IRS tool for assessing the scope of a taxpayer's foreign holdings and operations
- Recognize which Schedule of Form 5471 a Category 4 filer is not required to complete
- Identify how many different categories of E&P there are for purposes of the ordering rules in §959, based on the TCJA revisions
- Identify which separate schedule is required to be filed for each U.S. shareholder who is a Category 4 or 5 filer on whose behalf the Form 5471
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
Basic understanding of federal international income taxation concepts
Advance Preparation
None
