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e-CFR data is current as of July 9, 2020

Title 26Chapter ISubchapter APart 1 → §1.6038a-0


Title 26: Internal Revenue
PART 1—INCOME TAXES (CONTINUED)


§1.6038A-0   Table of contents.

This section lists the captions that appear in the regulations under section 6038A.

§1.6038A-1 General requirements and definitions.

(a) Purpose and scope.

(b) In general.

(c) Reporting corporation.

(1) In general.

(2) 25-percent foreign-owned.

(3) 25-percent foreign shareholder.

(i) In general.

(ii) Total voting power and value.

(iii) Direct 25-percent foreign shareholder.

(iv) Indirect 25-percent foreign shareholder.

(4) Application to prior open years.

(5) Exceptions.

(i) Treaty country residents having no permanent establishment.

(ii) Qualified exempt shipping income.

(iii) Status as a foreign related party.

(d) Related party.

(e) Attribution rules.

(1) Attribution under section 318.

(2) Attribution of transactions with related parties engaged in by a partnership.

(f) Foreign person.

(g) Foreign related party.

(h) Small corporation exception.

(i) Safe harbor for reporting corporations with related party transactions of de minimis value.

(1) In general.

(2) Aggregate value of gross payments made or received.

(j) Related reporting corporations.

(k) Consolidated return groups.

(1) Required information.

(2) Maintenance of records and authorization of agent.

(3) Monetary penalties.

(l) District Director.

(m) Examples.

(n) Effective dates.

(1) Section 1.6038A-1.

(2) Section 1.6038A-2.

(3) Section 1.6038A-3.

(4) Section 1.6038A-4.

(5) Section 1.6038A-5.

(6) Section 1.6038A-6.

(7) Section 1.6038A-7.

§1.6038A-2 Requirement of return.

(a) Form 5472 required.

(1) In general.

(2) Reportable transaction.

(b) Contents of return.

(1) Reporting corporation.

(2) Related party.

(3) Foreign related party transactions for which only monetary consideration is paid or received by the reporting corporation.

(4) Foreign related party transactions involving nonmonetary consideration or less than full consideration.

(5) Additional information.

(6) Reasonable estimate.

(i) Estimate within 25 percent of actual amount.

(ii) Other estimates.

(7) Small amounts.

(8) Accrued payments and receipts.

(9) Examples.

(c) Method of reporting.

(d) Time and place for filing returns.

(e) Untimely filed return.

(f) Exceptions.

(1) No reportable transactions.

(2) Transactions solely with a domestic reporting corporation.

(3) Transactions with a corporation subject to reporting under section 6038.

(4) Transactions with a foreign sales corporation.

(g) Filing Form 5472 when transactions with related parties engaged in by a partnership are attributed to a reporting corporation.

(h) Effective dates for certain reporting corporations.

§1.6038A-3 Record maintenance.

(a) General maintenance requirements.

(1) Section 6001 and section 6038A.

(2) Safe harbor.

(3) Examples.

(b) Other maintenance requirements.

(1) Indirectly related records.

(2) Foreign related party or third-party maintenance.

(3) Translation of records.

(4) Exception for foreign governments.

(c) Specific records to be maintained for safe harbor.

(1) In general.

(2) Descriptions of categories of documents to be maintained.

(i) Original entry books and transaction records.

(ii) Profit and loss statements.

(iii) Pricing documents.

(iv) Foreign country and third party filings.

(v) Ownership and capital structure records.

(vi) Records of loans, services, and other non-sales transactions.

(3) Material profit and loss statements.

(4) Existing records test.

(5) Significant industry segment test.

(i) In general.

(ii) Form of the statements.

(iii) Special rule for component sales.

(iv) Level of specificity required.

(v) Examples.

(6) High profit test.

(i) In general.

(ii) Return on assets test.

(iii) Additional rules.

(7) Definitions.

(i) U.S.-connected products or services.

(ii) Industry segment.

(iii) Gross revenue of an industry segment.

(iv) Identifiable assets of an industry segment.

(v) Operating profit of an industry segment.

(vi) Product.

(vii) Related products or services.

(viii) Model.

(ix) Product line.

(8) Example.

(i) Facts.

(ii) Existing records test.

(iii) Significant industry segments.

(iv) High profit test.

(v) Material profit and loss statements.

(d) Liability for certain partnership record maintenance.

(e) Agreements with the District Director or the Assistant Commissioner (International).

(1) In general.

(2) Content of agreement.

(i) In general.

(ii) Significant industry segment test.

(iii) Example.

(3) Circumstances of agreement.

(4) Agreement as part of APA process.

(f) U.S. maintenance.

(1) General rule.

(2) Non-U.S. maintenance requirements.

(3) Prior taxable years.

(4) Scheduled production for high volume or other reasons.

(5) Required U.S. maintenance.

(g) Period of retention.

(h) Application of record maintenance rules to banks and other financial institutions. [Reserved]

(i) Effective dates.

§1.6038A-4 Monetary penalty.

(a) Imposition of monetary penalty.

(1) In general.

(2) Liability for certain partnership transactions.

(3) Calculation of monetary penalty.

(b) Reasonable cause.

(1) In general.

(2) Affirmative showing required.

(i) In general.

(ii) Small corporations.

(iii) Facts and circumstances taken into account.

(c) Failure to maintain records or to cause another to maintain records.

(d) Increase in penalty where failure continues after notification.

(1) In general.

(2) Additional penalty for another failure.

(3) Cessation of accrual.

(4) Continued failures.

(e) Other penalties.

(f) Examples.

Example (1)—Failure to file Form 5472.

Example (2)—Failure to maintain records.

(g) Effective dates.

§1.6038A-5 Authorization of agent.

(a) Failure to authorize.

(b) Authorization by related party.

(1) In general.

(2) Authorization for prior years.

(c) Foreign affiliated groups.

(1) In general.

(2) Application of noncompliance penalty adjustment.

(d) Legal effect of authorization of agent.

(1) Agent for purposes of commencing judicial proceedings.

(2) Foreign related party found where reporting corporation found.

(e) Successors in interest.

(f) Deemed compliance.

(1) In general.

(2) Reason to know.

(3) Effect of deemed compliance.

(g) Effective dates.

§1.6038A-6 Failure to furnish information.

(a) In general.

(b) Coordination with treaties.

(c) Enforcement proceeding not required.

(d) De minimis failure.

(e) Suspension of statute of limitations.

(f) Effective dates.

§1.6038A-7 Noncompliance.

(a) In general.

(b) Determination of the amount.

(c) Separate application.

(d) Effective dates.

[T.D. 8353, 56 FR 28060, June 19, 1991, as amended by T.D. 9796, 81 FR 89850, Dec. 13, 2016]

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