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.
The IRS asked for records after we filed Form 5472. What should we send first if the file is large?
We are not dealing with an empty file. The problem is almost the opposite: there is a lot of support, but it lives across bank exports, contracts, owner spreadsheets, invoices, and cloud folders built...
My adviser keeps talking about reasonable cause, but I think the penalty may be wrong on basic liability first. Does that distinction matter?
The way the case is being framed right now jumps straight to 'tell them why you had reasonable cause,' but I am not convinced that is the first question. If the form was actually filed, if the notice ...
All the source documents exist, but there is no index tying them to the filed Form 5472. Is that still an audit problem?
Our file is not empty at all. In fact, it is almost the opposite problem: there is a large volume of supporting material, but nothing that clearly points from the filed numbers to the exact folders an...
We filed by fax but only kept a draft PDF and not the confirmation page. How bad is that?
The filing itself almost certainly went out, but our internal file is missing the actual fax confirmation sheet. What remains is the signed packet and some emails showing the return was being sent aro...
I already paid the penalty to stop the bleeding. What makes a strong Form 843 package now?
Paying first was not my ideal plan, but I wanted to stop the stress of the balance hanging over the company while we sorted out the larger dispute. Now that the payment has been made, I do not want to...
Form 3800 General Business Credit: How It Works (Ep. 25)
I'm trying to maximize my tax credits: Form 3800 General Business Credit: How It Works. How do I calculate and claim these credits correctly?
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...
Have a tax question?
ForeignLLCTax members can submit questions and get expert answers with IRS source citations. Join the community for $9.99/month.