Tax education: the IRS gave an important explanation to foreigners who own LLC in the US

Фото: Depositphotos

Until recently, it was believed that if a foreigner (non-resident alien) will create in the USA LLC with one foreign founder And:

— will not choose taxation as a corporation И

- the company will use an independent intermediary for sales, for example, Amazon Fulfillment И

— the company will not have an office, warehouse, staff or other presence in the USA И

- the owner will not visit the United States during the tax year,

that is, the company and the founder will not have any activities in the US, then such a company can not file tax returns, do not receive an EIN and, accordingly, do not pay taxes to the federal government. The discussion as to whether this position is correct and safe for the client has lasted for many years among professionals, until the IRS said its weighty word:

From 1 January 2017 all An LLC with one foreign founder for federal tax purposes is considered to be local corporations and is required to file an 5472 form for all transactions between the company and the founder.

Thus, all LLCs with a foreign founder who, until recently, did not file a tax report, are obliged from 1 January 2017:

• get ein (Employer Identification Number);
• to maintain adequate accounting, which clearly and clearly displays all operations of the company and be ready to provide such a report on demand;
• annually, if there are transactions with the LLC founder, submit the 5472 form.

• 

  Фото: Depositphotos

The company is obliged to report on any operations that the company had with its founder, namely:

• Sale;
• Rental and leasing;
• Credit;
• Prepaid expense;
• Assignment of rights;
• Share in the property;
• Any transfer of money;
• Reimbursement of the costs of doing business;
• The very fact of establishing LLC is an accountable operation.

It literally means the following.: any use of funds by the founder of the company should be displayed in this form. Moreover, if an LLC owner owns (in whole or in part) partner companies or LLC suppliers, transactions between these companies should also be included in the 5472 form.

In addition, the filing of this form effectively destroys the possibility of anonymous LLC ownership in the United States.

At present, the procedure for submitting the 5472 form requires a more detailed explanation, since, in accordance with the current legislation, this form is not submitted separately, but as part of a corporate report. Does this mean that LLC will actually be forced to file a full corporate report, as of October 10 2017 is not known.

This material does not constitute written tax advice or legal advice. Any information from this material is not created for use by the taxpayer in order to avoid any sanctions imposed on the taxpayer, and also can not be the basis for consultation by third parties. Please always consult a professional service before taking any action based on the information from this material. Keep in mind that information may be outdated at the time of reading, and we do not undertake to guarantee the updating of information. Copyright www.Solven.pro. Xnumx

Original article published on the site Solven.pro and reprinted with permission of the author.

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