International Tax Case Studies
Real Client Tax Scenarios
These are the kinds of situations that come across our desk every week: a $25,000 Form 5472 penalty for a company that owed no tax, an LLC that never filed because it had no income, foreign accounts that were never reported. Each case explains what happened, what the rules require, and how we approached it — so that if your situation looks similar, you know what to expect and what to do next.
Client confidentiality
These scenarios are based on matters our firm has handled. Names, locations, amounts, dates and other identifying details have been changed or omitted, and some facts may be combined, to protect client confidentiality. Results depend on each taxpayer's specific facts; a past result does not guarantee a similar outcome.
Form 5472 and foreign-owned U.S. LLCs
Penalty notices, reasonable cause requests, missing and incorrect filings, and the transactions owners often don't realize are reportable.
Our Client Received a $25,000 Form 5472 Penalty. Here's How We Responded
A foreign owner filed a late pro forma Form 1120 on his own, and a few months later the IRS assessed a $25,000 Form 5472 penalty. The LLC owed no tax. Here is how we built the reasonable cause response.
Read the case →A Foreign-Owned LLC With No Income Still Had a Form 5472 Filing Requirement
An owner in Europe assumed his U.S. LLC had nothing to file because it never made a sale. The company still had reportable transactions — and a Form 5472 and pro forma Form 1120 were due.
Read the case →The LLC Only Had a Few Hundred Dollars of Expenses, but the Potential Form 5472 Penalty Was $25,000
A foreign owner's LLC had only state fees and a registered agent bill — a few hundred dollars for the year. The potential Form 5472 penalty for not reporting those payments was $25,000.
Read the case →Five Years of Missing Forms 5472: How We Helped a Foreign Owner Catch Up
A foreign owner learned that his U.S. LLC had never filed Form 5472 — for five years. Here is how we rebuilt the records, prioritized the filings and presented the late returns to the IRS.
Read the case →The Tax Return Was Filed, but Form 5472 Was Incorrect
A foreign owner's LLC had filed a pro forma Form 1120 every year. The problem was what was on Form 5472 — and an incomplete form can carry the same $25,000 exposure as a missing one.
Read the case →A Foreign Owner Paid the LLC's Expenses Personally. Were Those Transactions Reportable on Form 5472?
Software subscriptions, advertising and marketplace fees were all paid with the owner's foreign credit card. None of it went through the LLC. All of it was reportable on Form 5472.
Read the case →The LLC Had No U.S. Bank Account. Form 5472 Was Still Required
A foreign owner thought that without a U.S. bank account, his LLC could not have any transactions to report. The formation costs he paid were enough to require Form 5472.
Read the case →A Wyoming LLC Owned by a Nonresident: The Form 5472 Requirement the Owner Did Not Know About
A nonresident chose Wyoming for its low fees and privacy, and was told there was no state income tax to worry about. That was true — and it had nothing to do with his federal Form 5472 requirement.
Read the case →A Delaware LLC With Zero Revenue Received a $25,000 IRS Form 5472 Penalty
A Delaware LLC owned by a foreign investor had zero revenue. After its late filing, the IRS assessed a $25,000 Form 5472 penalty. Here is how we prepared the abatement request.
Read the case →Can a $25,000 Form 5472 Penalty Be Removed? A Real Client Scenario
Form 5472 penalties can sometimes be removed through a reasonable cause request — but not by simply saying you didn't know. This case shows what the IRS looks for and how a strong request is built.
Read the case →We Discovered Multiple Missing Forms 5472 Before the IRS Issued a Penalty Notice
A new client hired us for a routine personal return. During onboarding we found three years of missing Forms 5472 for his U.S. LLC — before the IRS did.
Read the case →The Client's Previous Accountant Never Mentioned Form 5472
A foreign owner paid an accountant every year and assumed everything was handled. Form 5472 was never filed. Here is how we corrected the filings and why reliance on a professional can matter.
Read the case →A Small LLC Transaction Created Potential $25,000 Form 5472 Penalty Exposure
A single $1,500 loan from a foreign owner to his U.S. LLC was the only transaction of the year. It was enough to require Form 5472 — and to create $25,000 of potential penalty exposure.
Read the case →The Foreign Owner Transferred Money Into the U.S. LLC. Was It Reportable?
A foreign owner wired $40,000 into his new U.S. LLC to get it started. He worried it would be taxed as income. It wasn't — but it was reportable on Form 5472.
Read the case →One Foreign Owner, Two U.S. LLCs and Multiple Missing Forms 5472
A foreign investor owned two U.S. LLCs and had filed for neither. Each LLC needed its own Form 5472 for each year — and the transactions between the two companies had to be reported too.
Read the case →
Other international tax cases
New U.S. residents, Americans abroad, foreign real estate investors, foreign corporations and funds, gifts from family overseas, FBARs and Form 8938.
A Foreign Contractor Received a U.S. Form 1099-NEC. Did They Actually Owe U.S. Tax?
A designer living abroad received a Form 1099-NEC from a U.S. agency and assumed she now owed U.S. income and self-employment tax. The form was the wrong one — and the answer depended on where she did the work.
Read the case →A U.S. Taxpayer Moved Overseas During the Year. How We Analyzed the Foreign Earned Income Exclusion
An American engineer moved abroad in August and wanted to know whether the foreign earned income exclusion applied to his first partial year. The answer turned on timing, the 330-day test and an extension.
Read the case →A Foreign Investor Owned U.S. Rental Properties Through LLCs. What Needed to Be Filed?
A foreign investor owned three Florida condos, each in its own LLC. The property manager was withholding 30% of the gross rent, and no returns had been filed. Here is what was required and what we recovered.
Read the case →A Foreign-Owned U.S. Corporation Had No Revenue. Did It Still Need to File a Tax Return?
A foreign founder formed a Delaware corporation for future investors and spent two years building the product. No revenue, no Form 1120 — and a Form 5472 issue hiding behind the corporate return.
Read the case →A Client Had Foreign Bank Accounts but Never Filed an FBAR. What Happens Next?
A U.S. citizen living in Florida had kept bank accounts in his home country for years. His tax returns reported the interest, but no FBAR had ever been filed. Here is how we chose the right correction path.
Read the case →Foreign National Moved to the U.S. and Didn't Know Worldwide Income Became Reportable
A Spanish investor moved to Florida mid-year and expected to report only U.S. income. His arrival history determined when Spanish income entered his U.S. return.
Read the case →U.S. Resident Owned a Foreign Corporation but Never Filed Form 5471
A U.S. resident from Colombia had filed Forms 1040 for years without reporting his foreign corporation. We separated missing information returns from possible unreported income.
Read the case →American Living Abroad Had Not Filed U.S. Tax Returns for Several Years
An American overseas believed local tax filings replaced U.S. returns. We reviewed his income, foreign accounts and eligibility for Streamlined Foreign Offshore Procedures.
Read the case →Foreign Person Sold U.S. Real Estate and Too Much FIRPTA Tax Was Withheld
A nonresident investor thought FIRPTA withholding at closing was the final tax. We prepared the sale-year return to calculate the actual liability and claim any excess withholding.
Read the case →Foreign Investor Owned U.S. Rental Property but Never Filed Form 1040NR
A foreign owner rented out a Florida property for several years without filing U.S. returns. We reviewed gross-rent taxation, a net-basis election and the risks of late deductions.
Read the case →New U.S. Resident Owned Foreign Mutual Funds and Didn't Know About PFIC Rules
A new resident kept European mutual funds and ETFs without realizing that U.S. PFIC rules could change both his tax bill and annual filing requirements.
Read the case →U.S. Taxpayer Received a Large Gift From Parents Overseas
A U.S. resident worried that a substantial wire from foreign parents was taxable income. The key issue was documenting the gift and checking a separate Form 3520 obligation.
Read the case →Foreign Bank Accounts Were Reported on FBAR but Form 8938 Was Missed
A taxpayer filed FBARs and reported foreign interest, but omitted Form 8938. We compared the two regimes and developed an amended-return and reasonable-cause review plan.
Read the case →
Visa holders and foreign nationals in the U.S.
L-1, H-1B, F-1, E-2, O-1, J-1, TN, EB-5, B-1/B-2 and green card holders: when U.S. tax residency begins and what must be reported. Tax guidance only, not immigration advice.
L-1 Visa Holder Moving to the U.S.: What Happens to Your Foreign Income and Businesses?
An executive transferring from Latin America to Florida on an L-1 visa asked whether leaving his companies and savings abroad would keep them outside the U.S. tax system. We reviewed the question before his move, when timing decisions were still available.
Read the case →H-1B Visa Holder With Foreign Bank Accounts and Investments: What Must Be Reported?
An H-1B professional from India had reported every dollar of U.S. wages but had never included his Indian accounts or investments. He assumed accounts opened before his move were outside the U.S. system. A renewal notice for an Indian fixed deposit prompted the review.
Read the case →F-1 Student Filed Form 1040 Instead of 1040NR: How Can It Be Corrected?
An international student with an F-1 visa used popular online tax software and filed Form 1040. After classmates mentioned Form 1040-NR, she asked whether the refund was correct. The issue was not whether the software accepted her entries, but whether it used the right tax-residency rules.
Read the case →E-2 Visa Investor: When Does the U.S. Begin Taxing Your Worldwide Income?
An entrepreneur operating a Florida business on an E-2 visa believed the visa itself determined whether foreign income had to be reported. He owned companies and investments abroad and wanted to know whether only the U.S. business belonged on his American return.
Read the case →O-1 Visa Holder With Foreign Income: U.S. Tax Rules You Need to Know
An O-1 creative consultant moved from Colombia to Miami while foreign clients kept paying her. We separated residency, income source, foreign tax credits and account reporting.
Read the case →J-1 Visa and the Substantial Presence Test: Do Your Days in the U.S. Count?
A visiting researcher counted every J-1 day and filed as a resident too soon. His category, earlier exchange visits and calendar-year history changed the analysis.
Read the case →TN Visa Holder: Are You a U.S. Tax Resident or Nonresident?
A Canadian engineer in TN status thought temporary immigration status meant nonresident taxes. His travel calendar instead pointed to a resident period and worldwide reporting.
Read the case →EB-5 Investor Moving to the U.S.: Why Tax Planning Before Residency Matters
An investor preparing to relocate through EB-5 needed a coordinated review of companies, funds, trusts and family wealth before U.S. tax residency began.
Read the case →B-1/B-2 Visa and the 183 Day Rule: Can a Frequent Visitor Become a U.S. Tax Resident?
A Colombian business owner visiting Florida regularly learned that no green card did not mean no U.S. tax residency. Three years of travel revealed a substantial presence issue.
Read the case →Received a U.S. Green Card? What Happens to Your Foreign Income, Companies and Investments?
A foreign national moving from a temporary visa to permanent residency needed to connect green card tax rules with foreign companies, accounts and investments already held abroad.
Read the case →
Concerned about a similar situation?
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roger@ChirinoUSA.com · WhatsApp +1 (786) 271-3806