What Is a Form 5472?

  • Tax

Purpose and Overview

Form 5472 is an IRS information return for reporting reportable transactions between a U.S. corporation or a foreign corporation engaged in a U.S. trade or business and related foreign parties. Its goal is to provide transparency on income, deductions, and transfers that could shift taxable income out of the United States.

Who Must File

A U.S. corporation that is 25 percent foreign–owned or a foreign corporation with a U.S. permanent establishment must file Form 5472 when it has reportable transactions with a related party. Reportable transactions include sales, rents, royalties, interest, and service fees.

Filing Requirements

Form 5472 must be attached to the filer’s timely filed Form 1120 or 1120-F, including extensions. Each related–party transaction must be detailed by type, amount, and accounting method.

Penalties

Failure to file or to report complete information may result in a penalty of $25,000 per missing or incomplete form. Continued failure after IRS notification can trigger additional penalties every 30 days, up to a maximum.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.