What to Know About IRS Form 5472

IRS Form 5472 is used for US companies with significant foreign ownership, as well as foreign companies conducting business in the US. Here’s what you need to know:

What is Form 5472 used for?

Form 5472 is used to disclose “reportable transactions” conducted in the US by foreign corporations or US-based corporations that are at least 25 percent foreign-owned. In general, the IRS defines reportable transactions as any type of transaction “for which monetary consideration (including US and foreign currency) was the sole consideration paid or received during the reporting corporation’s tax year.” This can include product sales or building rentals, among other things.

Who must file Form 5472?

According to the IRS, corporate entities required to file Form 5472 include:

• US corporations that are at least 25 percent foreign-owned
• Foreign corporations engaged in a trade or business within the US
• Foreign-owned LLCs that are treated as a disregarded entity

Form 5471 vs. Form 5472

Form 5471 is used by individuals to report financial ties to foreign corporations. Such persons can be officers, directors, or shareholders who own at least 10 percent of a foreign corporation’s stock. The main difference between Form 5471 and Form 5472 is that the former is filed by an individual, while the latter is filed by a corporation.

To determine whether IRS Form 5472 is necessary for your business, it’s a good idea to check with a CPA.