Form 5472 - Compulsory Fields?

[rb91134]

I am a perpetual traveler with a U.S. LLC and my original home country has a strict days test (and nothing else) to determine tax residency.

Does anyone know whether the fields 1n ("Country(ies) under whose laws the reporting corporation files an income tax return as a resident") and 4e ("Country(ies) under whose laws the direct 25% foreign shareholder files an income tax return as a resident") in Form 5472 can be left blank in this case?

 

[rb91134]

bump

 

[OffshorePhantom]

I do not think you can left them blank but I read in another post that you have a UAE residency so you can put it in the form.

Generally, I have spoken with several accountants and tax advisors and the IRS does not share those forms with your home country even if you put your home country address there.

What they care is that you pay US taxes if due.

They may share information, not automatically, but upon request though, so there might be the risk that if your home country has some suspects of you evading taxes and finds some links with the US it asks information to the IRS.

 

[rb91134]

I do not think you can left them blank but I read in another post that you have a UAE residency so you can put it in the form.

Generally, I have spoken with several accountants and tax advisors and the IRS does not share those forms with your home country even if you put your home country address there.

What they care is that you pay US taxes if due.

They may share information, not automatically, but upon request though, so there might be the risk that if your home country has some suspects of you evading taxes and finds some links with the US it asks information to the IRS.

Thanks for your response. My concern actually is not whether the IRS shares those forms with my home country or any other country, but rather, making sure that I am not providing any inaccurate information in the form to them.

The question that the form asks is: "Country(ies) under whose laws the reporting corporation files an income tax return as a resident".

In my case, my US LLC won't be filing an income tax return with the UAE (even after the new CT laws in the UAE) because even though I have residency in the UAE, I don't spend more than 3-4 days per year in the UAE, which means that the US LLC shouldn't be deemed to have a PE in the UAE or be a tax resident of the UAE.

I am a digital nomad and spend no more than 2-3 months in a particular country in a year. In addition, my original country of nationality has a strict "days test" for determining tax residency - it doesn't have tests like "habitual abode" or "center of life".

Net-net, this means that the US LLC won't be filing an income tax return in ANY country at all.

Which is why I wanted to find out whether I can keep those fields blank instead of saying that the US LLC will be filing taxes in the UAE given that it won't.

 

[OffshorePhantom]

If the LLC is a sole member disregarded entity were you are the member you have to put the country where you are considered tax resident and should file a tax return.

In your case it is UAE, the fact that there is no personal income tax in UAE makes you avoid any filings but in theory that is the country where you are tax resident so you can put that in the form.

Then on UAE side you may claim you are not tax resident since you do not spend the necessary time there but on IRS side that is the country you have to report according to what you said.

Another why to solve the issue of the UAE CT on the US LLC can be to nominate a manager of that LLC that it is resident in a tax heaven (for example Bahamas and others) or some territorial tax countries like Thailand in that case the effective place of management is that country and you can distribute the profit to yourself in the UAE as a passive memeber and not taxes is due.

This is just my consideration but I encourage you to seek professional advisory before making any move and maybe let us know here what you find

 

[Topcat]

Thanks for your response. My concern actually is not whether the IRS shares those forms with my home country or any other country, but rather, making sure that I am not providing any inaccurate information in the form to them.

The question that the form asks is: "Country(ies) under whose laws the reporting corporation files an income tax return as a resident".

In my case, my US LLC won't be filing an income tax return with the UAE (even after the new CT laws in the UAE) because even though I have residency in the UAE, I don't spend more than 3-4 days per year in the UAE, which means that the US LLC shouldn't be deemed to have a PE in the UAE or be a tax resident of the UAE.

I am a digital nomad and spend no more than 2-3 months in a particular country in a year. In addition, my original country of nationality has a strict "days test" for determining tax residency - it doesn't have tests like "habitual abode" or "center of life".

Net-net, this means that the US LLC won't be filing an income tax return in ANY country at all.

Which is why I wanted to find out whether I can keep those fields blank instead of saying that the US LLC will be filing taxes in the UAE given that it won't.

Hey, did you find out the answer to this in the end? I'm in the same situation as you. No official residency anywhere and no tax return to file anywhere. Therefore what to write in those fields you mentioned of form 5472...I've no idea. If you've found out the answer please let me know, it would be super helpful

 

[Topcat]

Feel free to DM me the answer if you're not comfortable posting it here. I also started a new thread on this subject, but yet to get a clear answer: Foreign-owned US LLC filing tax forms with the IRS

 

[rb91134]

I didn't find any definitive answer backed by case law/evidence/IRS instructions etc. So I haven't decided what I'll be doing yet but will most likely be putting in UAE instead of leaving it blank.