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June 4, 2011


The IRS recently announced a new email form on their website,  for the sole purpose of allowing tax payers to send them international tax questions with the promise they would respond with an answer from an expert within a reasonable time. We decided to test that question form and see what kind of answer was sent back.

We asked them a question on Form 5471 (foreign corporation tax form) involving a filing issue that was  specifically addressed and answered on page 1 or 2 of the IRS instructions to Form 5471.  We then waited for the email answer which came in about a week.

Their answer thanked us for our question and then state it was a complex question and we should consult a CPA or other tax professional for an answer because they were not able to answer it. The IRS response showed us:

  • One more time that a taxpayer cannot rely on the IRS who writes and administers the International Tax system to answer questions even if they indicate they will do so and  should know the answer.
  • A question that was answered on page 2 of the instructions for Form 5471 was too difficult for the IRS to handle....then how do they expect taxpayers to handle it.
  • The IRS creates a lot of business for tax professionals like us.


Anonymous said...

I just called the IRS helpline about this (1-800-829-1040) and was transferred to what I was told was the relevant department, only to be told that form 5471 was "out of scope" and that the only way for me to get help or clarification was to contact a professional CPA. I expressed different combinations of bemusement, annoyance, etc to make sure I was understanding correctly that a form produced by the IRS was one that was "out of scope", but the woman (ID #1000228107) confirmed this was the case. There was no nod towards the "complexity of the question" since I didn't even get to ask the question - the whole form is out of scope!

Thanks for your blog though, I've found it by Google and am finding great information here.
-US taxpayer in London, UK

Anonymous said...

I am a US citizen who lives abroad. I created a company abroad and pay myself a salary from my company. How do I report this salary in form 5471?

The IRS was unable to help me as well, out of their scope they said.

Don D. Nelson, Attorney, CPA said...

Any salary paid you by your Foreign Corporation must be reported on your personal income tax return. It is not reported except as a deduction on Form 5471