6C-International information Reporting

Question 1

International Information Reporting-Foreign Bank and Financial Accounts

Answer 1

1. Must be filed by any citizen, resident, corporation, partnership, limited liability company,
   trust, or estate that:
   ‐ Has a financial interest in or signature authority over at least one financial account
   located outside the U.S. if the aggregate value of those foreign financial accounts
   exceeded $10,000 at any time during the calendar year.
2. It’s a separate filing from the tax return applicable to the entity (i.e., 1040, 1065, 1041, etc.)
3. Due on April 15 of the year following the calendar year reported. An automatic extension to
   October 15 if the due date of April 15 is not met. No need to request a separate extension.
4. Penalty – failure to file may be subject to a civil penalty not to exceed $10,000 per violation.
   Tax Courts – different decisions: per form vs. per bank account.
   ‐ Willful violations – penalties as high as $100,000 or 50% of the value of the account,
   whichever is greater

Question 2

International Information Reporting-Forom 8938-Statement of Foreign Financial Assets

Answer 2

1. Form is used by specified individuals to report foreign financial assets above the following
   thresholds for taxpayers living in the U.S.:
   a. Unmarried taxpayers and married filing separately – $50,000 on last day of year, or
   more than $75,000 at any time during tax year
   b. Married taxpayers filing a joint income tax return – $100,000 on last day of year, or
   more than $150,000at any time during tax year
2. The applicable reporting thresholds for taxpayers living outside the U.S. are:
   a. Unmarried taxpayers and married filing separately – $200,000 on last day of year, or
   more than $300,000 at any time during tax year
   b. Married taxpayers filing a joint income tax return – $400,000 on last day of year, or
   more than $600,000 at any time during tax year
3. Failure to file penalty – $10,000
4. Due date – Same as tax return date
5. Part of the entity tax return and submitted at the same time

Question 3

International Information Reporting-Forom 8865-Return of US Persons with Respect to Certain Foreign Patenerships

Answer 3

1. Must be filed by the following:
   a. A U.S. person who was in control of a foreign partnership at any given time during the
   year
   b. A U.S. person who had at least 10% partnership interest in foreign partnership controlled
   by U.S. person(s) each owning at least 10% interest
   c. A U.S. person who contributed property in exchange for at least 10% interest or the
   value of the transfer or of the property contributed exceeded $100,000
   d. Someone who acquired an interest in a foreign partnership that when added to their
   existing ownership percentage was 10% or more
   e. Someone whose ownership percentage in a foreign partnership went from above 10%
   to below 10% (divestiture)
2. Due date – Same as tax return date
3. Penalty – $10,000 for the failure to file for each year of each foreign partnership

Question 4

International Information Reporting-Forom 5471-Information Returns of US persons with respect to certain Foreign Corporation

Answer 4

1. Needs to be filed by any U.S. person with at least 10% ownership in a foreign corporation
2. Used for reporting GILTI income
3. Due date – Same as tax return
4. Penalty – $10,000 for each annual account period of the foreign corporation for which the
   U.S. taxpayer fails to file

Question 5

International Information Reporting-Forom 3520-Annua returns to report transactions with Foreign Trusts and Receipt of Certain Foreign Gifts

Answer 5

1. Needs to be filed by any U.S. person who:
   a. Transferred property to a foreign trust
   b. Owned some or all of the assets of a foreign trust
   c. Received distribution from foreign trust or estate
   d. Engaged in specified transactions with a foreign trust
2. Due Date – Same as tax return
3. Penalty – the greater of $10,000 or 35% of the gross value of the property transferred