Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

Relief on penalties on late filing form5472/fixing late file

Customer Question
I am looking for...

I am looking for information about relief from penalties for late filing of form 5472 and procedures for correcting the late filing.

Accountant's Assistant:
Can you give me any more details about your issue?

Customer:
New client Came into existence in 2012. Has a Mexican corporate shareholder which owns 100% of the stock of the US company. Has only borrowed money from the Mexican shareholder and has not repaid any of the borrowings as of yet.

Submitted: 2 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 20 minutes by:
2/3/2016
Tax Professional: Megan C, Certified Public Accountant (CPA) replied 2 years ago
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,609
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified
There are a couple of options at your disposal:
First time abatement can provide penalty relief if the taxpayer has not previously been required to file a return or has no prior penalties (except the estimated tax penalty) for the preceding three years with respect to the same IRS Master File module (IRM §20.1.1.3.6.1). With respect to a Form 5472 late-filing penalty, the IRM provides for an FTA if an FTA was applied to the taxpayer's related Form 1120 late-filing penalty or no penalty was assessed on the related Form 1120 (IRM §21.8.2.20.2).
Secs. 6038 and 6038A each provide a reasonable-cause basis for penalty relief (Regs. Secs. 1.6038-2(k) (3), 1.6038-3(k)(4), and 1.6038A-4(b)). A taxpayer may qualify for penalty relief based on reasonable cause if the taxpayer exercised ordinary business care and prudence in determining its tax obligations but was nevertheless unable to timely file the return to which the Form was attached.
As of July 1, 2014, taxpayers that have failed to file a Form 5472 may file it under the IRS's Delinquent International Information Return Submission Procedures. The procedures allow taxpayers to avoid penalties under Secs. 6038 and 6038 A if the taxpayer timely filed its original income tax return but omitted the required international information forms.
The procedures are available for taxpayers that (1) have not filed one or more required international information returns, (2) have reasonable cause for not timely filing the information returns, (3) are not under a civil examination or a criminal investigation by the IRS, and (4) have not already been contacted by the IRS about the delinquent information returns. Taxpayers who have unreported income or unpaid tax are not precluded from filing delinquent international information returns.
Taxpayers that meet the requirements should file the delinquent information returns with an amended income tax return and attach a statement of all facts establishing reasonable cause for the failure to timely file the international information returns. As part of that statement, taxpayers must certify that any entity for which the information returns are being filed was not engaged in tax evasion. The reasonable-cause statement must be signed under penalties of perjury.
If a taxpayer does not attach a reasonable-cause statement to each delinquent information return filed, penalties may be assessed in accordance with existing procedures. The IRS also may impose penalties if it does not accept the taxpayer's explanation of reasonable cause.
If a taxpayer meets the requirements for and follows these procedures, the IRS presumably will not automatically assess penalties under Secs. 6038 and 6038A for the late filing of the form.
Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Megan C Your Own Question
Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,609
16,609 Satisfied Customers
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Megan C is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

16,609 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
Go back to the previous questions. Since currently the C
go back to the previous questions. Since currently the C corporation is owned by the Canadian personally (100%) how can I convert the ownership to a Canadian corporation so the wittholding rate is 5%.… read more
taxmanrog
taxmanrog
Master\u0027s Degree
1,076 satisfied customers
This year LLC with sole members owned by %25 or more by a
This year LLC with sole members owned by %25 or more by a foreign must file form 5472. Question: If a client has a Delaware LLC that doesnt even contains an EIN are we obligated to file for the EIN an… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
We plan to setup a c corp in Delaware with non resident
We plan to setup a c corp in Delaware with non resident owner If the owner is also an employee does his pay taxes in us or in Europe where he leaves? Also what is the tax rate if we issue dividends?… read more
taxmanrog
taxmanrog
Master\u0027s Degree
1,076 satisfied customers
Can a C corp(personal service corp) still file a 2015 form
Can a C corp(personal service corp) still file a 2015 form 1120S and attach a form 2553 and site a late relief election on the forms or are we past the deadlines??… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,328 satisfied customers
An Australian company started an LLC in California in 2012.
An Australian company started an LLC in California in 2012. It did not get an EIN and has not filed the 1120 or form 5472. California has found the company and asked for a California return which woul… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,328 satisfied customers
Locked by Customer Service - PRIVACY To expert experienced
Locked by Customer Service - PRIVACY To expert experienced in appealing the IRS denial of Late filing of 1120S penalty ($195 per month): First-time penalty abatement request was denied by the IRS by s… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,693 satisfied customers
I still need your help on the previous question regarding
Hi Stephen,I still need your help on the previous question regarding abatement of late filing penalty on Form 5472… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
Should I use an attorney to go to appeals on this? I filed
Should I use an attorney to go to appeals on this? I filed a 1120 with a loss 5 days after the extended due date with a 5472 due date. This corporation has never had a late filing of any kind.… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Dear Tax Professional, On form 5472 PartIV - line 9, if
Dear Tax Professional, On form 5472 PartIV - line 9, if it says amounts borrowed, does it mean that the Corporation borrows money from shareholder or shareholder borrows money from Corporation? Thank … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
If someone forms a new company and wanted to file form 8832
If someone forms a new company and wanted to file form 8832 and form 2553 but thought they were when they filed their SS-4 form, this is the first year they are filing, can they still make these elect… read more
abci168
abci168
Principal
27 satisfied customers
Attempting to locate citation FTA - First Time Abate
Attempting to locate citation for the FTA - First Time Abate Program relative to late filing of Form 5472… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I received a letter from the IRS for Late Form 5472. I asked
I received a letter from the IRS for Late Form 5472. I asked for an extension to file, but I sent regular mail 0.46 Now I am being charged $20,000 because the C-Corp has 2 foreign shareholders d accor… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Reelection of filing form by a LLC If a LLC previously elected
Reelection of filing form by a LLC If a LLC previously elected to file as a C corp and was approved by IRS. But now want to re-elect the year approved as a partnership, is it practical or not? I read … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I formed a Florida LLC, single member, in June 2011. I did
I formed a Florida LLC, single member, in June 2011. I did not file the 2553 for s-corp election but had intended to elect to be taxed as an s-corp. What can be done at this point for my 2011 taxes? I… read more
fastfile
fastfile
Tax Advisor
Master's Degree
550 satisfied customers
My client was advised to incorporate her existing restaurant
My client was advised to incorporate her existing restaurant business, which is a sole proprietor located in California. The date of incorporation with the California Secretary of State is May 7, 2009… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
Hello Sir,Madam, My name isXXXXX am non-resident alien.I
Hello Sir,Madam, My name isXXXXX am non-resident alien.I found a company in NY before 2 years.Have 100 % of the voting shares.Now I see the form 5472 in my accounting software.What mean re-portable tr… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Im a small business owner. I filed my incorporating paperwork
I'm a small business owner. I filed my incorporating paperwork in late September / Early October of 2011, and the only money that entered my company's bank account was me purchasing my founder's stock… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Is there relief from a penalty for filing a late 1120-S?
A Client got a letter for late filing penalty for an 1120-S. My client filed the 1120-S on September 15, 2011 for tax year 2010. My client also believed that her previous accountant filed a tax extens… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x