A limited liability company (LLC) that is created under the laws of a US state and wholly owned by a single non-US person is required to report transactions with its non-US owner and other related parties to the Internal Revenue Service (IRS) on Form 5472, which must be submitted with a pro forma Form 1120. In response to the COVID-19 outbreak, the IRS has automatically extended the filing due date from 15 April 2020 to 15 July 2020.
Using Form BE-10, the Bureau of Economic Analysis (BEA) conducts a survey on US direct investment abroad. The survey is conducted every five years and currently covers fiscal years ending in 2019. The gathered data is used to produce statistics on the scale and effects of US-owned business activities abroad. All US persons subject to the reporting requirements must file, even if they are not contacted by the BEA. Families and their advisers should not ignore correspondence from the BEA.
On the evening of 9 April 2020, the Inland Revenue Service (IRS) issued Notice 2020-23 postponing additional tax deadlines to 15 July 2020. The notice clarifies that the extended deadline relief includes not just the filing of specified income tax forms, but also all schedules, returns and other forms that are filed as attachments to income tax forms or are required to be filed by the due date of a specified income tax form.
The Internal Revenue Service (IRS) is ramping up compliance initiatives targeting failures to file US tax and information returns. US tax attorneys and accountants are increasingly seeing IRS notifications and penalty assessments. As the new year begins, family advisers and trust officers should review succession planning structures to determine whether any entity or individual has a 15 April US reporting requirement.