Form 5472 - Failure to File

Form 5472 Failure to File penalty occurs when a foreign-owned U.S. corporation doesn't submit accurate information about its transactions with related parties. This violation can lead to substantial penalties and legal consequences. Complying with Form 5472 is crucial to avoid penalties and ensure transparency in cross-border dealings

What are the penalties for late filing or incorrect filing of form 5472?

A penalty of $25,000 will be assessed on any reporting corporation that fails to file Form 5472 when due and in the manner prescribed. The penalty also applies for failure to maintain records as required by Regulations section 1.6038A-3.

Note: Filing a substantially incomplete Form 5472 constitutes a failure to file Form 5472.

Each member of a group of corporations filing a consolidated information return is a separate reporting corporation subject to a separate $25,000 penalty and each member is jointly and severally liable. If the failure continues for more than 90 days after notification by the IRS, an additional penalty of $25,000 will apply. This penalty applies with respect to each related party for which a failure occurs for each 30-day period (or part of a 30-day period) during which the failure continues after the 90-day period ends.

Criminal penalties under sections 7203, 7206, and 7207 may also apply for failure to submit information or for filing false or fraudulent information.