The IRS Form 5472 Reporting Requirements for Foreign Owners of a U.S. Disregarded Entity
By Anthony Diosdi Recently, the Internal Revenue Service (“IRS”) and the Treasury Department issued final regulations regarding the reporting requirements for domestic disregarded entities held by a nonresident. According to the regulations under Internal Revenue Code Section 6038A, a disregarded entity will be treated as a U.S. corporation. Historically, a foreign-owned disregarded entity was just that- disregarded. As a result, nonresidents were not required to disclose disregarded entities to the IRS on a tax return or informational return. Under the new rules, this is no longer the case. Under the new regulations, a disregarded entity held by a nonresident individual or foreign entity is required to obtain a Employer Identification Number (“EIN”), prepare a pro-forma Form 1120, and file a Form 5472, Information Return of a 25% Foreign Owned US…