Extension of assessment period for certain foreign transfers applies only to required information, not entire return.

• Jurisdiction: United States
• Date: 01 October 2000
• Author: Fiore, Nicholas J.

On March 15,2000, taxpayer T timely filed Form 1120 for calendar year 1999 but failed to attach Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business (as required by Regs. Sec. 1.6038A-2(a)). On Feb. 15, 2001, during examination, T submitted Form 5472, reporting in Part IV several 1999 transactions with foreign related parties. In September 2003, Examination discovers an error in T's 1999 deductions for depreciation on assets unrelated to any of the transactions reportable on Form 5472.

Issue: Assuming no other adjustment to the statute of limitations (SOL) under Sec. 6501 occurs:

1. Has the IRS lost its right to assert any deficiency attributable to depreciation after March 15, 2003 (the expiration of the SOL without regard to Sec. 6501(c)(8)), or has Sec. 6501(c)(8) operated to extend the period to Feb. 15, 2004 (three years after submission of the required Form 5472 information)?

2. Is the result different if Part IV of Form 5472 was not required to be completed, because all reportable transactions were with domestic related parties?

Analysis

Sec. 6501(c)(8) provides as follows:

(8) FAILURE TO NOTIFY SECRETARY OF CERTAIN FOREIGN TRANSFERS.--In the case of any information which is required...