A Brief Introduction to the Brand New Schedule Q and Schedule R for IRS Form 5471
Since the Tax Cuts and Jobs Act was enacted, Internal Revenue Service (“IRS”) Form 5471 has given tax practitioners fits. Much of this confusion is the result of the Section 959 ordering and basketing rules. Things are not likely to improve next tax season. This is because the IRS has decided to add two more schedules to Form 5471. Beginning in this tax season, controlled foreign corporation (“CFC”) shareholders could be required to attach all new Schedule Q and Schedule R to the Form 5471. Category 4 and Category 5 filers will be required to attach Schedule Q and Schedule R to their Form 5471. A Category 4 filer is a U.S. person who had “control” of a foreign corporation for an uninterrupted period of at least 30 days during…