What Is a Form 5472?

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.

Summary

Form 5472 is an IRS information return that reports reportable transactions between a U.S. corporation or foreign corporation engaged in a U.S. trade or business and related foreign parties. It must be filed by U.S. corporations that are at least 25 percent foreign-owned or by foreign corporations with a U.S. permanent establishment when reportable transactions occur. The form is attached to Form 1120 or 1120-F, and failure to file can result in a $25,000 penalty per missing or incomplete form, with additional penalties every 30 days after IRS notification.

Key Facts

Form 5472 is an IRS information return used to report reportable transactions between a U.S. corporation or foreign corporation engaged in a U.S. trade or business and related foreign parties.

A U.S. corporation that is 25 percent foreign-owned must file Form 5472 when it has reportable transactions with a related party.

A foreign corporation with a U.S. permanent establishment must file Form 5472 when it has reportable transactions with a related party.

Reportable transactions on Form 5472 include sales, rents, royalties, interest, and service fees.

Form 5472 must be attached to the filer's timely filed Form 1120 or 1120-F, including extensions.

Each related-party transaction on Form 5472 must be detailed by type, amount, and accounting method.

Failure to file Form 5472 or report complete information may result in a penalty of $25,000 per missing or incomplete form.

Continued failure to file Form 5472 after IRS notification can trigger additional penalties every 30 days, up to a maximum.

Frequently Asked Questions

What is the purpose of Form 5472?

Who must file Form 5472?

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.

What are reportable transactions for Form 5472?

Reportable transactions include sales, rents, royalties, interest, and service fees between the filer and a related party.

How and when is Form 5472 filed?

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.

What are the penalties for failing to file Form 5472?