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Form 1120-F Reporting for Foreign Corporations: Filing Obligations Under IRS Scrutiny

Effectively Connected Income, Permanent Establishment and Treaty Position Exemption Claims, Protective Returns

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Tuesday, October 10, 2017

Recorded event now available

This course will provide corporate tax professionals with a solid and practical guide to Form 1120-F. The panel will focus on the key schedules unique to Form 1120-F, discuss the permanent establishment rules, and offer useful guidance in filing protective returns and other strategies to avoid IRS audit challenges.

Description

The IRS recently announced it will address Form 1120-F noncompliance as a focus of its Large Business and International Division’s Audit and Compliance Campaign. The announcement signals a change in the Service’s emphasis and follows data findings that 1120-F non-filing is widespread and increasing.

Foreign corporations must file Form 1120-F if they engaged in a trade or business in the United States, or had income, gain or loss that would be treated as effectively connected with the conduct of a U.S. trade or business. Filing obligations go further than these two criteria: a corporation taking the position that it avoided having a permanent establishment in the U.S. or claiming some other income tax treaty benefit must also file to document that position.

Foreign corporations with only limited activities may file a “protective return” to preserve tax benefits if an IRS examination later proves the corporation should have filed a return.

While Form 1120-F is similar in structure to the income tax return of a domestic corporation in terms of information required, taxpayers filing an 1120-F also must allocate U.S. source and foreign source income and deductions. Tax advisers need to know the rules for determining income sourcing to avoid tax consequences.

Listen as our experienced panel provides a practical guide to completing Form 1120-F, including determination of filing requirements and other audit avoidance strategies, and completing schedules specific to Form 1120-F.

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Outline

  1. Form 1120-F filing requirements: Who must file
  2. Transactions subject to 1120-F filing obligations
  3. Treaty provisions
  4. Protective returns
  5. Exceptions
  6. IRS audit priority campaign

Benefits

The panel will discuss these and other important topics:

  • Permanent establishment issues and challenges
  • Types of corporations that must file
  • Filing Form 1120-F to claim a treaty benefit
  • Protective returns
  • How the IRS will pursue its examination campaign of noncompliant corporations
  • Penalties for delinquence

Faculty

Barsky, Stanley
Stanley Barsky
Partner
Fox Rothschild

Mr. Barsky's practice involves a broad range of transactional and general advisory tax law matters, with a focus on...  |  Read More

Phelan, Kimberlee
Kimberlee S.P. Murphy, CPA, CGMA, MBA
Partner, Market Leader, International Services
Withum Smith+Brown

Ms. Murphy is Withum’s International Services Market Leader with over 30 years of accounting and tax...  |  Read More

Gifford, Dirk
Dirk Gifford
Managing Director, International Tax Services
KPMG US

Mr. Gifford serves in the firm's International Corporate Services Practice. He focuses on working primarily with...  |  Read More

Samtoy, John
John Samtoy
Tax Partner
Holthouse Carlin & Van Trigt

Mr. Samtoy’s practice specializes in international tax compliance and consulting services, with a focus on...  |  Read More