Received a Form 5472 Penalty?
A Form 5472 Penalty is issued to a US company that has Foreign Owner(s) or Shareholder(s). This is a complex form and is often overlooked by most accountants and tax preparers. We are CPAs with years of experience specialized in removing tax penalties.
If you have received a letter don’t be frightened or ignore it. We will deal with the IRS on your behalf and do our best to get these penalties removed completely. Although the process is not easy, we have been very successful at achieving an elimination of these penalties for our clients.
Who must file Form 5472?
A Foreign-Owned US company must file a Form 5472 every year in most cases. Since Form 5472 is an informational report, not an actual tax return, it is often forgotten. This is the main reason that when penalty letters are issued, business owners are caught by surprise. Form 5472 should be filed by the US corporation every year along with Form 1120 on April 15th or October 15th if an extension was filed.
The purpose of Form 5472 is to list all Reportable Transactions for that tax year. Reportable Transactions are defined broadly by the IRS but basically, they include most transactions between the Foreign Owner(s) and the US Corporation, regardless of the monetary amount. Examples of Reportable Transactions include disbursement of funds to a Foreign Owner(s) personal account from the US Company, contributions to the US company from a Foreign Owner, payment of an expense by the Foreign Owner on behalf of the US company or any other transactions involving the US Company and the Foreign Owner(s).
Penalties for not filing form 5472
In 2017 new laws were passed which increased the penalties significantly. If you are penalized for tax years before 2017 the penalties are $10,000 per year per owner. After 2017, however, the penalties increased to $25,000 per year per owner. Be aware that penalties are also assessed if Form 5472 was filed incorrectly or in an untimely manner.
If you received a penalty letter, act fast. The IRS will increase penalties the longer you take to file and/or amend and incorrect filing. The penalties are assessed as follows: $25,000 per year per owner, after 90 days the penalties increase by $25,000 per year per owner, after that, the penalties increase by $25,000 per year per owner every 30 days. The penalties will keep increasing with no limit until corrective action is taken. Also, the longer you take to respond to the IRS, the harder it will become to remove the already issued penalties.
Broward Office
Address
Suite 203
Pembroke Pines, FL 33027
Contact
phone: (954) 894-2003
fax: (786) 206-7065
email:
Hours
| Day | Hours |
|---|---|
| Monday | 8:30am – 5:30pm |
| Tuesday | 8:30am – 5:30pm |
| Wednesday | 8:30am – 5:30pm |
| Thursday | 8:30am – 5:30pm |
| Friday | 8:30am – 5:30pm |
| Saturday | Closed |
| Sunday | Closed |