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Eurotor. The letters informed L. Gelabert that the Internal
Revenue Service (IRS) had issued new reporting requirements for
U.S. corporations and foreign corporations operating in the
United States that are owned by a foreign person. The
requirement was that a reporting entity had to report each
transaction with a “related party” on IRS Form 5472, Information
Return of a Foreign Owned Corporation. One letter stated that
transactions were defined broadly and included commissions,
interest, rents and royalties paid and received, loans, sales,
purchases, and services performed by or for the reporting entity.
The letter continued:
Separately, it is expected that the IRS will utilize
the information contained on Form 5472 to determine
whether the reported transactions were conducted at
“arms-length”. Thus, in reviewing transactions for
preparation of the Form 5472, the vulnerability to
attack by the IRS under the Section 482 arms-length
standard should also be considered.
Hamlin sent a final IRS proof copy of Form 5472 with
instructions. Hamlin also offered to assist L. Gelabert in
reviewing transactions to determine whether they must be reported
and “to further assist in minimizing the exposure to future IRS
audit adjustments under Section 482.”
No Forms 5472 were filed with the MTNV 1987 Federal return.
Neither MTNV nor MSI filed Forms 5472 with their Federal returns
for fiscal years ended 1988 and 1989 for transactions engaged in
with Manver, Gatetown, Lince, Futureprom, Attractours, Edemle,
Celin, Amsrott, Slider, Protravol, Etano, N.V. (Etano), or
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