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Understanding the Complexities of Form 5472 and Its Transfer Pricing Implications

OnDemand Webinar (87 minutes)

Learn what you need to know about the Form 5472 including reporting guidelines and how to complete it properly.Many U.S. inbound investors are not aware of the complexity, documentation, and financial exposure associated with their requirement to report on Form 5472 inter- and intra-company activities conducted with various related foreign persons and entities. This topic helps identify who has a Form 5472 filing requirement, which transactions should be reported and the filers supporting documentation requirements. The material also explains the expanded statute of limitations potentially applicable to all aspects of the U.S. filer's tax return for failure to file a complete Form 5472 and the sizeable financial penalty and difficult penalty abatement procedures. Failure to properly complete a Form 5472 and maintain proper documentation is one of the most common areas of transfer pricing penalty concerns for U.S. inbound investors.


Brian D. Dill, J.D., LL.M., Cherry Bekaert Kirk A. Hesser, M.S., Cherry Bekaert William Y. Hooker, CPA, J.D., Cherry Bekaert


Form 5472 and Its Statutory Authority

• IRC §6038A

• IRC §6038C

Applicable Form 5472 Entities, Individuals, and Definitions

• Direct and Ultimate Indirect 25% Shareholders

• Rev. Proc. 91-55

• Key Terms

- Reporting Corporation

- Reportable Transaction

- Related Party

Latest Development: Reporting for Domestic Disregarded Entities Separate From Foreign Persons

• Treasury Decision 9796

• Treasury Regulation Section 301.7701-2

• Treasury Regulation Section 1.6038A-0

• Treasury Regulation Section 1.6038A-2

• Treas. Reg. §1.6038A-2(b)(9) e.g., 1 - Reporting for U.S. Disregarded Entity

• Treas. Reg. §1.6038A-2(b)(9) e.g., 2 - Reporting for Transactions Between U.S. Disregarded Entities

Transfer Pricing and Form 5472

• Transactions to Report

- Treas. Reg. §1.6038A-1(m)

- Irm §

• Documentation Requirements

Completing Form 5472

Statute of Limitations, Penalties and Penalty Abatement

• IRC §6501(a)

• IRC §6501(c)

• IRC §6501(c)(8)

• IRC §6038A(d), 6038C(c)