US Tax Guide for Expats (2020): Form 8858

Form 8858

Form 8858, Information Return of US Persons With Respect To Foreign Disregarded Entities

Filing Requirements

A United States person who is a direct or indirect owner of a Foreign Disregarded Entity (FDE) is required to file Form 8858. Here are the Instructions to Form 8858. Good luck. An FDE is an entity that is not created or organized in the United States and that is disregarded as an entity separate from its owner for US income tax purposes under Regulation sections 301.7701-2 and 301.7701-3.

This form is used to satisfy the reporting requirements of IRC sections 6011, 6012, 6031, and 6038, and related regulations. If you are required to file Form 5471 as a Category 4 or Category 5 filer with respect to a controlled foreign corporation, and the controlled foreign corporation is the owner of an FDE, you are also required to file Form 8858. Similarly, you are required to file Form 8858 if you a member of a controlled foreign partnership that is the owner of an FDE.

What Happens If You Don't File Form 8858?

A $10,000 penalty applies for each tax year the required information is not filed with the IRS. The penalty is increased to a maximum of $50,000 if information is not submitted after the IRS has mailed notices of the failure. For continued failures, the foreign tax credit could be reduced. See Code Section 6038(b).

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