Four Lines of Defense to a Form 5471 Penalty
By Anthony Diosdi In order to provide the Internal Revenue Service (“IRS”) with information necessary to ensure compliance with Global Intangible Low-Taxed Income (“GILTI”) and the Subpart F provisions of the Internal Revenue Code, each year a U.S. person who owns more than 50% or more of the stock, by vote or value, of a foreign corporation must file a Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations. See Treas. Reg. Section 1.6038-2(a) and (b). Other persons who must file a Form 5471 include 1) U.S. persons who acquire a 10% ownership interest, acquire an additional 10% ownership interest, or dispose of stock holdings to reduce their ownership in the foreign corporation to less than 10% and 2) U.S. citizens and residents who are officers…