Real Tax Questions, Expert Answers
Get answers to your foreign-owned LLC tax questions from ForeignLLCTax. Every answer includes IRS source citations and step-by-step guidance.
What types of payments count as base erosion payments under BEAT?
We're trying to figure out exactly which payments our U.S. company makes to related foreign entities count as 'base erosion payments' for BEAT purposes. We pay our foreign parent for inventory (COGS),...
At what point does a Form 5472 penalty case become serious enough for Form 911 and the Taxpayer Advocate Service?
I do not want to over-escalate too early, but I also do not want to be stubborn about staying in ordinary channels once the case is clearly causing real damage. The company has already sent documents,...
The IRS denied my penalty relief request. Is Appeals actually the next step, or do I need a completely different type of filing now?
The denial letter is what rattled me because it felt final at first glance. But after reading more carefully, I realized the denial of relief might simply be the point where an appeal becomes availabl...
How does IRC 1442 withholding on foreign corporations differ from IRC 1441 withholding on individuals?
I have a holding company in the Netherlands that owns a U.S. LLC which elected corporate status. My U.S. accountant keeps mentioning both IRC 1441 and IRC 1442 — one for individuals and one for corpor...
Should I dispute the penalty by letter now, or pay first and use Form 843 later?
I keep seeing two different tracks described online. One is to write back to the notice and ask the IRS to reconsider the penalty. The other is to pay and then file Form 843 for a refund or abatement....
I got a Form 5472 penalty notice and now I keep hearing about a 90-day clock. What should I actually be doing before that turns into more penalties?
The notice itself was stressful enough, but then someone mentioned that if the failure continues for more than 90 days after IRS notification there can be more penalties layered on top. That turned wh...
My preparer says a workpaper index is optional, but I keep losing time finding support. Is building one worth it?
Every time a bank, accountant, or internal reviewer asks about related-party flows, we end up re-opening the same folders and recreating the same explanations. That makes me think the file may technic...
If I net everything through one owner ledger, can that make Form 5472 'substantially incomplete' even when the total balance is right?
My books currently collapse contributions, reimbursements, direct owner-paid bills, and later withdrawals into one running owner balance. The ending number is probably correct economically, but the pa...
I have all the related-party documents in Google Drive, but they are messy. Does that still satisfy the Form 5472 record rule?
Nothing is truly missing, but the file structure is chaotic. Wires, invoices, owner reimbursements, and intercompany agreements are all in the same broad folders, and I am now realizing that retrieval...
Our EIN is still pending, but a tax deposit is due. Does the pending EIN status change how we make the payment?
We understand the return-side rule about using 'Applied For' if the EIN has not arrived yet, but the deposit side feels less intuitive because payments usually have less room for informal explanations...
Our bank and state records are current, but the IRS mailing address may still be old. Is that really a big enough risk to fix immediately?
Part of the team thinks this is mostly theoretical because most communication is digital now anyway, and the company has already updated the operational systems it actually uses day to day. But I am l...
We missed the 60-day window for updating the responsible party. Is late Form 8822-B still worth filing?
The control change happened a while ago, and only now did someone on our side realize the IRS expects responsible-party changes to be reported within 60 days. That obviously means we are late. My inst...
The IRS online EIN tool will not accept my facts because I am abroad. Is that normal or am I missing a workaround?
I kept assuming I was doing something wrong in the online application, but after reading the IRS instructions more carefully it looks like the system itself may not be intended for applicants whose pr...
I mailed my ITIN package from overseas and the IRS still has not sent a notice. When does the delay become a real problem?
I understand that overseas ITIN applications can take longer than domestic ones, so I was patient at first. But now enough time has passed that I am no longer sure whether I am still in the normal pro...
We got an EIN for a startup that never really launched. Can we just abandon it, or should we close the IRS account properly?
The business never got beyond setup and testing, so part of me wants to leave the whole file alone and move on. But I also know the IRS does not really think about these things the same way founders d...
We changed registered agents months ago. Do we also need to tell the IRS separately?
The state records are updated and the new registered agent is in place, so internally we thought the address housekeeping was finished. Then someone pointed out that the IRS may still be working off t...
My ITIN expired before I could file. Should I renew it first or send the return package anyway?
I only noticed the ITIN problem when preparing the return, which is obviously later than ideal. Now I am trying to figure out whether the right move is to stop and renew first, or whether the renewal ...
Do I really have to mail original identity documents for my ITIN application?
The idea of sending original identity documents through the mail makes me nervous, especially because I am filing from outside the U.S. and do not want a passport or similar document stuck in a slow a...
Can I use the U.S. tax treaty with my country to reduce or avoid FIRPTA withholding?
I'm from the Netherlands and selling a rental property in Chicago through my LLC. The U.S. has a tax treaty with the Netherlands. My tax advisor back home said treaties often reduce withholding taxes....
I need an ITIN and a 1040-NR. Should those really go in one package?
I kept looking for a separate ITIN workflow because it felt cleaner to get the number first and then worry about the return. But the IRS guidance now makes it sound like the Form W-7 and the 1040-NR a...
My return is due but the EIN still has not arrived. What should go in the EIN box?
We filed the SS-4 already and have proof of when it was sent, but the EIN assignment is still not back and a filing deadline is now in front of us. I do not want to improvise by using someone else's n...
Tax Return Due Dates: General Rules for Individual and Business Filers (Ep. 50)
I'm confused about tax deadlines: Tax Return Due Dates: General Rules for Individual and Business Filers. When exactly do I need to file and what extensions are available?
What happens if the buyer doesn't withhold FIRPTA tax? Or if I (the foreign seller) don't file a return?
I sold a property two years ago through my LLC and I just found out that the buyer never withheld FIRPTA tax. Nobody at closing mentioned it. I also haven't filed a U.S. tax return for the sale. Am I ...
I tried to get EINs for two entities in one day and the second one stalled. Is that the IRS one-per-day rule?
I am setting up a U.S. operating LLC and a second entity for a related project, both with me as the controlling founder. The first EIN filing went through, but the second one did not move the way I ex...
I am abroad, have no ITIN yet, and cannot use the online EIN system. What should the SS-4 file look like?
I understand now that the IRS online EIN tool is not really built for my fact pattern because I am applying from abroad, and I also do not have an ITIN yet. That leaves me with the fax or mail route, ...
We changed control of the LLC. Is Form 8822-B mandatory even if the EIN stayed the same?
The company kept the same EIN and legal entity, but the real decision-maker changed after an ownership and management transition. Some people on the team assumed nothing had to be reported to the IRS ...
Our formation service put itself on the EIN application as the responsible party. How serious is that?
I only noticed the issue because the IRS correspondence on the file did not match what I expected. After tracing it back, it looks like the formation service or one of its staff was listed as the resp...
My travel calendar has flights and hotels, but not what I actually did each day. Is that a problem?
I can prove where I traveled, but my records are weak on what happened on each day once I arrived. For most trips I know the broad purpose, but if someone asked me which days were meetings, which days...
What are FinCEN Geographic Targeting Orders and does my LLC's real estate purchase trigger one?
My foreign-owned LLC is buying a commercial property in Miami for $800,000. My real estate attorney mentioned something about a 'Geographic Targeting Order' from FinCEN that applies to certain real es...
Can my foreign-owned LLC do business with clients in sanctioned countries like Cuba or Russia?
I am a Spanish citizen with a U.S. LLC that provides web development services. I have potential clients in Cuba and Russia who want to hire my LLC for website projects. In Spain, there are some EU san...
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