Form 8858

Who, when, and how to prepare and file Form 8858 Information return of U.S. Persons With Respect to Foreign disregarded Entities and Foreign Branches

The Massive Penalties for Not Filing

The failure to file this information is $10,000 for each annual accounting period of each business classified as a CFC or CFP in addition to a 10% reduction of the foreign taxes available for credit (foreign tax credit or FTC). If the failure continues 90 days or more after the date the IRS mails notice of the failure to file an additional 5% reduction is made for each 3-month period, or a fraction thereof, during which the failure continues after the 90-day period has expired.

Select the appropriate tax organizer in Taxdome for tax return preparation. Nicholas Hartney, EA, CAA, will contact you if further information is needed.

Filing Fee of $350 per form.

What is and Who Needs to File Form 8858?

How It Works

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IRS Form 8858 is required by certain U.S. persons (citizen or resident alien of the U.S., a domestic entity such as a partnership, corporation, or estate) that operate a foreign branch or a U.S. company or own a foreign disregard entity, the U.S. equivalent of a limited liability company (L.L.C).

Filing this form is used to satisfy the reporting requirements of sections 6011, 6012, 6031, and 6038 of the US Internal Revenue Code and related regulations.

Sections 6011 and 6012 essentially state that you must file a tax return by preparing and filing the appropriate forms and schedules on a tax return per the regulations set forth by the Secretary of the Treasury (Secretary).

Section 6031 relates to the tax return of partnership income and Section 6038 refers to information reporting with respect to certain foreign corporations and partnerships.

Who Needs to File?

A U.S. person that is a tax owner of a foreign disregard entity or a foreign branch of a U.S. company at any time during their U.S. tax year or annual accounting period.

Certain U.S. persons who are required to file Form 5471(U.S. citizens and U.S. residents who are officers, directors, or shareholders in certain foreign corporations (CFC) with respect to certain controlled foreign corporations) that is a tax owner of a foreign disregarded entity or operates a foreign branch at any time during the CFC's annual accounting period.

Certain U.S. persons that are required to file Form 8865 with respect to a controlled foreign partnership (CFP) that is a tax owner of a foreign disregarded entity.