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ARTICLE · 11 SEPTEMBER 2024

3 Things You Should Know About IRS Form 926

Gray Reed
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U.S. persons who make outbound investments in foreign corporations often have thorny federal reporting obligations.

United StatesTax
Matthew Roberts
Matthew Roberts
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U.S. persons who make outbound investments in foreign corporations often have thorny federal reporting obligations. In addition to the commonly filed IRS Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, these taxpayers may have separate requirements to file an IRS Form 926, Return of a U.S. Transferor of Property to a Foreign Corporation. The penalties for failing to file a timely and complete IRS Form 926 can be severe. This article discusses three important things you should know about the IRS Form 926.

Who Must File

Congress enacted Section 6038B as part of the Deficit Reduction Act of 1984. Under section 6038B, U.S. persons must file an information return for any tax year in which they transfer property to a foreign corporation in an exchange that falls under sections 332, 351, 354, 355, 356, or 361 (the "tax-free corporate provisions"). Thus, an IRS Form 926 must be filed if: (i) a U.S. person (ii) transfers

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