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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Law

Date & Time
  • event Date

    Tuesday, December 5, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$347.00
CLE
CPE
ALL

This CLE/CPE course will provide tax counsel and advisers with a practical discussion of IRS International Practice Unit (IPU) guidance on what constitutes "substantial compliance" in filing Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations. The panel will detail the IRS guidance on applying the substantial compliance doctrine and the meaning of "substantially complete" for purposes of the Service's imposition of penalties related to international information return requirements.

Faculty

John Samtoy
Tax Partner
Holthouse Carlin & Van Trigt LLP

Mr. Samtoy’s practice specializes in international tax compliance and consulting services, with a focus on individuals, closely-held businesses, and hedge funds. He has particular expertise in structuring and reporting foreign manufacturing arrangements and foreign holding companies, and is experienced in foreign asset disclosure requirements, as well as foreign trust and estate reporting.

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Michael Sardar
Partner
Kostelanetz, LLP

Mr. Sardar has extensive experience on a wide range of tax controversy and white collar criminal defense matters. He represents clients in all stages of civil and criminal tax controversies before the Internal Revenue Service (IRS), state tax authorities, the Department of Justice, and local prosecutors. Mr. Sardar also represents and advises taxpayers facing audits and investigations of noncompliance with IRS foreign bank and asset reporting requirements, utilizing his skill, creative thinking, and deep knowledge of the law in this area. He also has a great deal of experience representing corporate and individual taxpayers making voluntary disclosures of unreported income to the IRS and state tax authorities. Mr. Sardar has also represented scores of clients with unreported foreign assets, enabling the repatriation of over half a billion dollars of offshore assets through the IRS Offshore Voluntary Disclosure Program, the Streamlined Compliance Procedures, and the IRS’ current Voluntary Disclosure Practice.

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Description

Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, is one of the most complex reporting obligations in the U.S. offshore information tax reporting regime. A taxpayer who fails to file a "substantially complete" Form 5471, absent reasonable cause, is subject to severe monetary and other penalties per year per missed filing the form.

Additionally, the statute of limitations remains open for failure to file a Form 5471 on the taxpayer's entire return until the IRS receives a substantially complete filing. This subjects the tax return to a longer period of audit scrutiny.

Further complicating matters is that neither IRC 6038 nor its regulations provide any definition of "substantially complete" to determine whether penalties apply. The Service issued an IPU guidance to tax examiners on failure to file penalties and what constitutes "substantial compliance" for a Form 5471 filing.

The IPU guidance provides fact pattern examples for IRS audit examiners showing where a Form 5471 may be considered not substantially complete and can be used by practitioners as a tool to evaluate the compliance of client filings.

Listen as our experienced panel provides a thorough and practical review of the IPU guidance on substantial compliance for Form 5471 information return filings.

Outline

  1. IPU guidance on the meaning of "substantially complete"
  2. Substantial compliance vs. strict compliance
    • Examples of application of substantial compliance by the tax court
    • Difference between an income tax return and an informational tax return in terms of substantial compliance
    • Other previous IRS guidance and memoranda
  3. Examples of when an informational filing is not substantially complete
  4. Errors apparent on the face of the Form 5471 return
  5. Errors beyond the face of the return
  6. Examples from the IPU

Benefits

The panel will review these and other highly relevant concepts:

  • IRC 6038 information reporting requirements and penalties
  • Guidance on Category 4 vs. Category 5 filers
  • How the IPU advises examiners to view substantial compliance in light of tax court holdings and prior IRS advice
  • Errors "beyond the face" of Form 5471 that will cause an examiner to treat the filing as not substantially complete
  • Common errors on Form 5471 that render the filing to be not substantially complete

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Detail the potential penalty exposure based on the IPU guidance for failure to file a substantially complete Form 5471
  • Determine how the IRS may apply "substantial compliance" to other foreign information filing requirements
  • Discern from the IPU what prior client filings run the risk of not being substantially complete
  • Decide what potentially noncompliant filings may need remedial actions
  • Recognize avenues of defense against an examiner's claim that a Form 5471 is not substantially complete

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Specific knowledge and understanding of Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations); familiarity with the 5471 IRS penalty structure and key U.S. international tax reporting rules and obligations of U.S. presons with interests in foreign corporations.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).