[Federal Register Volume 69, Number 26 (Monday, February 9, 2004)]
[Rules and Regulations]
[Pages 5931-5932]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2645]



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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9113]
RIN 1545-BD02


Electronic Filing of Duplicate Forms 5472

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final and temporary regulations.

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SUMMARY: This document contains final and temporary regulations 
providing that a Form 5472 that is timely filed electronically is 
treated as satisfying the requirement timely to file a duplicate Form 
5472 with the Internal Revenue Service Center in Philadelphia, 
Pennsylvania. This action is necessary to clarify how the duplicate 
filing requirements for Form 5472 apply when a reporting corporation 
electronically files its income tax return (including any attachments 
such as Form 5472). This document affects corporations subject to the 
reporting requirements in sections 6038A and 6038C that file Form 5472 
electronically. The text of the temporary regulations also serves as 
the text of the proposed regulations set forth in the proposed rules 
section in this issue of the Federal Register.

DATES: Effective Date: These regulations are effective February 9, 
2004.
    Applicability Date: For the dates of applicability, see Sec.Sec. 
1.6038A-2(h) and 1.6038A-2T(h).

FOR FURTHER INFORMATION CONTACT: Edward R. Barret, (202) 435-5265 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    Section 6038A of the Internal Revenue Code (Code) requires 
information reporting by 25-percent foreign-owned domestic corporations 
with respect to certain transactions between such domestic corporations 
and foreign or domestic related parties. Section 6038C of the Code 
requires foreign corporations engaged in a trade or business within the 
United States at any time during a taxable year to report the 
information described in section 6038A with respect to certain 
transactions between such foreign corporations and foreign related 
parties. On June 19, 1991, the Treasury Department and the IRS 
published in the Federal Register (56 FR 28056) final regulations (TD 
8353, 1991-2 CB 402) under section 6038A. A correction to TD 8353 was 
published in the Federal Register on August 23, 1991, at 56 FR 41792.
    The 1991 final regulations under section 6038A contain guidance at 
Sec.Sec. 1.6038A-1 and 1.6038A-2 regarding the information reporting 
requirements under sections 6038A and 6038C. Section 1.6038A-2(a)(1) 
generally requires a reporting corporation to file a separate annual 
information return on Form 5472 with respect to each related party with 
which the reporting corporation has had a reportable transaction during 
the taxable year. Section 1.6038A-1(c)(1) defines a reporting 
corporation as either a domestic corporation that is 25-percent 
foreign-owned or a foreign corporation engaged in a trade or business 
within the United States at any time during a taxable year. Section 
1.6038A-2(d) provides that Form 5472 shall be filed with the reporting 
corporation's income tax return for the taxable year by the due date of 
that return. A duplicate Form 5472 shall be filed at the same time with 
the Internal Revenue Service Center in Philadelphia, Pennsylvania (the 
Philadelphia Service Center). Section 1.6038A-2(e) provides that even 
if the reporting corporation's income tax return is not timely filed, 
Form 5472 (with a duplicate to the Philadelphia Service Center) 
nonetheless is required to be timely filed at the service center where 
the return is due, with a copy of Form 5472 to be attached to the 
income tax return when ultimately filed. However, neither Sec. 1.6038A-
2(d) nor Sec. 1.6038A-2(e) directly addresses the duplicate filing 
requirements for Form 5472 when a reporting corporation electronically 
files its income tax return (including any attachments such as Form 
5472).

Explanation of Provisions

    To clarify how the duplicate filing requirements for Form 5472 
apply when a reporting corporation electronically files its income tax 
return (including any attachments such as Form 5472), the temporary 
regulations amend Sec. 1.6038A-2(d) to provide that a Form 5472 that is 
timely filed electronically is treated as satisfying the requirement 
timely to file a duplicate Form 5472 with the Philadelphia Service 
Center. Accordingly, the filing of a copy of such timely filed 
electronic Form 5472 with the Philadelphia Service Center will not be 
required.
    The temporary regulations do not amend the requirement of Sec. 
1.6038A-2(e) that Form 5472 be timely filed (with a duplicate to the 
Philadelphia Service Center) even if the income tax return of the 
reporting corporation is not timely filed. As a transitional matter, 
for the filing season for taxable year 2003 returns it is anticipated 
that electronic filing of Form 5472 will be possible only as an 
attachment to an electronically filed income tax return; electronic 
filing of Form 5472 separately rather than as an attachment to an 
electronically filed income tax return will not be technically 
possible. Accordingly, if a reporting corporation's income tax return 
is filed after its due date (including extensions), regardless of 
whether that return is filed electronically, Sec. 1.6038A-2(e) requires 
the reporting corporation timely to file Form 5472 on paper (with a 
copy to the Philadelphia Service Center) at the service center where 
the income tax return is due. In subsequent filing seasons, it is 
anticipated that electronic filing technology will allow separate 
electronic filing of Form 5472. The Treasury Department and the IRS 
intend that the guidance contained in the amendment to Sec. 1.6038A-
2(d) in these temporary regulations would apply to any such separate 
electronic filing of Form 5472. Accordingly, a Form 5472 that is timely 
and separately filed electronically would be treated as satisfying the 
requirement timely to file a duplicate Form 5472 with the Philadelphia 
Service Center.
    Similarly, an electronic attachment of a copy of Form 5472 to an 
income tax return that is not timely filed satisfies the requirement of 
the second sentence of Sec. 1.6038A-2(e).

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866. 
Therefore, a regulatory assessment is not required. It also has been 
determined that section 553(b) of the Administrative Procedure Act (5 
U.S.C. chapter 5) does not apply to these regulations. For the 
applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6) 
refer to the Special Analyses section of the preamble to the cross-
reference notice of proposed rulemaking published in the proposed rules 
section in this issue of the Federal Register. Pursuant to section 
7805(f) of the Code, these regulations will be submitted to the Chief 
Counsel for Advocacy of the Small Business Administration for comment 
on its impact on small businesses.

Drafting Information

    The principal author of these regulations is Edward Barret, Office 
of the Associate Chief Counsel (International). However, other 
personnel from the IRS and Treasury

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Department participated in their development.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Amendments to the Regulations

0
Accordingly, 26 CFR part 1 is amended as follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *


0
Par. 2. Section 1.6038A-2 is amended by revising paragraph (d) to read 
as follows:


Sec. 1.6038A-2  Requirement of return.

* * * * *
    (d) [Reserved]. For further guidance, see Sec. 1.6038A-2T(d).
* * * * *

0
Par. 3. Section 1.6038A-2T is added to read as follows:


Sec. 1.6038A-2T  Requirement of return (temporary).

    (a) through (c) [Reserved]. For further guidance, see Sec. 1.6038A-
2(a) through (c).
    (d) Time and place for filing returns. A Form 5472 required under 
this section shall be filed with the reporting corporation's income tax 
return for the taxable year by the due date (including extensions) of 
that return. A duplicate Form 5472 (including any attachments and 
schedules) shall be filed at the same time with the Internal Revenue 
Service Center, Philadelphia, PA 19255. A Form 5472 that is timely 
filed electronically satisfies the duplicate filing requirement.
    (e) Through (g) [Reserved]. For further guidance, see Sec. 1.6038A-
2(e) through (g).
    (h) Effective date. (1) This section applies for taxable years 
ending on or after January 1, 2003. For taxable years ending prior to 
January 1, 2003, see Sec. 1.6038A-2(d) in effect prior to January 1, 
2003 (see 26 CFR part 1 revised as of April 1, 2002).
    (2) The applicability of this section expires on or before February 
6, 2007.

Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
    Approved: January 28, 2004.
Pamela F. Olson,
Assistant Secretary of the Treasury.
[FR Doc. 04-2645 Filed 2-6-04; 8:45 am]
BILLING CODE 4830-01-P