Field Guide: Form 5471 Category 5a, 5b, or 5c? (Notice 2019-40)

Hello everyone and welcome back to The Friday Edition, an every-other-week newsletter about international tax topics. I’m Phil Hodgen, this time writing from New York.

When this email goes out, I will likely be sitting in the Delta lounge at JFK Terminal 4, waiting for my flight home. I have been in New York this week to speak at the NYSSCPA’s International Tax Conference. The topic: filing categories for Form 5471.

A new Form 5471 Field Guide

One of the side effects of that speech: another Field Guide. This one is for Category 5.

A United States person (IRC §7701(a)(30)) who is a United States shareholder (IRC §951(b)) of a controlled foreign corporation (IRC §957(a)) is a Category 5 filer of Form 5471.

But there are three types of Category 5 filers: Category 5a, 5b, and 5c. How do you figure out which box to check in Item B on the first page of Form 5471?

Rev. Proc. 2019-40, Section 8 created Categories 5a, 5b, and 5c (though it does not name them as such).

This Field Guide contains a flow chart to help you understand Rev. Proc. 2019-40 and the questions you must ask in order to figure out which of those three Categories applies to your taxpayer, and a simple explanation of the questions and how to answer them. Questions are in the diamond shapes in the flow chart.

Download here: Field Guide – Form 5471 Category 5a, 5b, 5c (Notice 2019-40).pdf.

Comments? Corrections?

As usual, please tell me if I made a mistake or if my explanations can be improved.

(Carlos Minvielle gave me some comments on my Category 3 Field Guide–much appreciated, and there will be a version 2 of that Field Guide shortly).

London Meet-up Late June/Early July: Email If You’re Interested

We are in the early stages of organizing a one-day meet-up in London for members of the International Tax Pros group who live in Europe. This will consist of presentations on international tax topics (you get CPE or CE credits) and some fun (food and beverages included) at the end of the day.

We have a tentative venue, and are working on the date right now.

​Lori Nitzel (a member of the International Tax Pros group in Sweden) is doing the footwork to put this event together. Thank you, Lori.

Stay subscribed here for more details. I hope you will join us in London.

Please Suggest Webcast Topics

I am putting together the calendar for the monthly International Tax Lunch sessions that I do with the California Society of CPAs. (Last Friday of the month, noon Pacific time).

If you have an international tax topics you would like me to consider putting on the list, please email me. I want to talk about stuff that is important to you.

International Tax Pros

Speaking of the International Tax Pros group, you might want to consider joining us. At this point there are about 100 members. If you want a friendly place to brainstorm/confirm conclusions, if you want to meet CPAs, EAs, and attorneys who do what you do, consider joining us. You’ll get the cheap rate for the London event, too!

Go to https://pro.internationaltaxlaw.com to join.

See you in a couple of weeks.

Phil.