Who this is for
- US C corporations with a foreign shareholder seeking a paid return preparer
- Owners gathering records for a calendar-year Form 1120 and possible Form 5472
Not covered here
- How to prepare and file the return yourself
- Detailed extended due dates and late-filing relief
- Whether owner funding is debt or equity
- Calculating Delaware franchise tax or state income tax
What makes the preparation fee higher or lower?
There is no official Form 1120-plus-5472 price. Book cleanup, multiple related parties, owner funding, foreign payments, payroll, and late years add work.
Owner loans need agreements, payment histories, balances, and possible interest or withholding review. For debt versus shares, see putting money into your US corporation from abroad. Payroll needs reconciliation. Foreign payments may require Forms 1042 and 1042-S review, depending on their nature and source (IRS Form 1042; IRS Form 1042-S).
What documents should I send before the preparer starts?
Contact a preparer now with available records and a list of gaps. Complete records are needed to finish the return: a bank balance alone cannot show what each transfer was (records rule; Form 5472 instructions).
| Send | What it lets the preparer check |
|---|---|
| Incorporation documents, EIN letter, share register, and changes in ownership or owner residence | Legal name, tax ID, tax year, and who counted as a foreign owner |
| Last filed federal and state returns, Forms 5472, extension confirmation, and IRS notices | Opening balances, elections, prior related parties, and missed filings |
| Full-year bank and card statements, bookkeeping ledger, invoices, receipts, and payroll reports | Income, expenses, assets, debts, and payments already reported elsewhere |
| Agreements, invoices, transfers, reimbursements, and loan schedules for owners and other related people or companies | Which transactions need Form 5472 or withholding review |
| Foreign account list and each state where the corporation had people, property, or sales | Possible FBAR and state-return scope |
A domestic corporation generally files Form 1120 even without taxable income; Form 5472 depends on reportable related-party transactions (Form 1120 instructions; Form 5472 instructions).
Do the books need to be clean, and what should the balance sheet show?
The books must explain material bank movements. Form 1120 Schedule L, when required, must agree with the corporation's books and records (Form 1120 instructions).
Give the preparer an income statement and beginning and ending balance sheets, with bank accounts reconciled. Show cash, receivables, equipment, payables, loans, stock, and retained earnings separately. Mark unexplained transfers and personal-card payments. Even when a small corporation need not complete Schedule L, it needs records supporting its return (records rule). For who should maintain those books, see doing your own books or hiring a bookkeeper.
What owner and related-party details does Form 5472 need?
Form 5472 Part II identifies direct and ultimate indirect foreign shareholders meeting the 25% vote-or-value test. It generally requires a separate form for each transacting related party, subject to filing exceptions (Form 5472 instructions).
Give each qualifying foreign shareholder's and transacting related party's name, address, country of tax residence, ownership chain where relevant, US tax ID if any, and any prior Form 5472 reference ID. Flag foreign people or companies with neither ID so the preparer can assign a reference ID. List sales, services, rent, royalties, interest, loans, and other exchanges, with contracts, invoices, currency, and exchange rates. Foreign related-party loans need opening and closing balances or monthly averages (Form 5472 instructions).
Keep the records behind related-party transactions and tell the preparer where records held abroad can be obtained. For the separate record-location rules, see foreign-owned C corporation filing (26 CFR 1.6038A-3).
Which foreign-ownership questions on Form 1120 Schedule K need answers?
Schedule K asks whether a foreign person owned at least 25% of the corporation by vote or value, then asks for that owner's percentage and country of residence (individual) or incorporation, organization, creation, or administration (entity). If several foreign owners meet the test, the form uses the one with the highest ownership for question 7 (Form 1120 instructions).
Explain indirect ownership through parents, trusts, or other entities. Schedule K also asks about other entity interests and payments that may require Forms 1099 or 1042-S (Form 1120 instructions). If the corporation owns a foreign company, ask whether the quote covers Form 5471; see US parent of a foreign operating company (Form 5471 instructions).
What should a quote include?
Ask for a written scope showing each return, disclosure, and review separately. Form 1120 does not itself cover every state or foreign-account filing.
| Item | Ask whether the quote covers it |
|---|---|
| Federal return | Form 1120, schedules, extension review, e-filing, and a copy of the filed return |
| Related parties | Whether Form 5472 is needed, how many separate forms, and supporting transaction schedules |
| Bookkeeping | Reconciliation or cleanup before tax preparation |
| State filings | Each state income or franchise return; for a Delaware corporation, its annual report and franchise tax are separate (Delaware) |
| Foreign payments | Forms 1042 and 1042-S review, filings, and any withholding work (IRS) |
| Foreign accounts | Corporate FBAR review if the corporation had a financial interest in or signature authority over foreign accounts that together exceeded $10,000 at any time (FinCEN) |
| Other work | Payroll or contractor forms, prior years, IRS notices, and representation after filing |
Ask for the total fee or hourly rate, added-form costs, cleanup and notice scope, and how extra work is approved. For the Delaware calculation, see Delaware franchise tax.
What will I sign, and who can speak to the IRS?
An authorized corporate officer signs Form 1120; a paid preparer also signs and supplies a PTIN. For an electronically filed return, the officer may sign Form 8879-CORP after reviewing the completed return; the e-file provider must receive it before transmitting the return (Form 1120 instructions; Form 8879-CORP). The corporation remains responsible for the information it files (IRS guidance).
The return's paid-preparer authorization allows limited discussion about its processing. Broader representation requires Form 2848 and an eligible representative. CPAs, enrolled agents, and attorneys have unlimited IRS representation rights; a PTIN alone permits preparation, not representation (Form 1120 instructions; Form 2848; IRS credentials).
How close to October 15 can I hire someone?
There is no IRS cutoff for hiring a preparer, but a calendar-year corporation with a timely Form 7004 must file Form 1120 and any required attached Form 5472 by October 15. Form 7004 generally adds six months to file, not to pay (Form 7004 instructions; Form 5472 instructions).
Send the year-end books, related-party records, extension confirmation, and officer contact as soon as they are ready. Ask whether the preparer can finish review and obtain the officer's signature before the deadline; a booking alone does not file a return. Fiscal-year corporations have different dates. A calendar-year corporation doing business and keeping books outside the US and Puerto Rico gets until June 15 automatically; Form 7004 filed by that date extends filing to October 15 (Form 7004 instructions). A missing required Form 5472 can trigger a $25,000 corporate penalty; see the corporate return due after an extension for full deadlines and consequences.
Example
These examples use illustrative US dollars; they are not fee quotes.
Dormant corporation
One foreign owner, 12 bank statements, and no owner loan make the first review relatively small. Send the share register, EIN letter, bank statements, Delaware report, and last return. The preparer still checks whether any owner or related-party transaction occurred before deciding if Form 5472 is needed.
Founder funding before revenue
The founder advanced $30,000 and paid $2,000 of software bills on a personal card. Send loan terms, transfer records, invoices, and a schedule of what the corporation owes. The books must separate debt from share money; a reportable foreign-owner loan needs Form 5472 balance information. The personal-card payments need classification before their Form 5472 treatment can be decided.
Foreign parent, affiliate, and contractor
A foreign parent and its affiliate charge service fees, and the corporation pays a US contractor. Send both intercompany agreements, invoices, payment records, and contractor details. The quote should cover each required Form 5472, review whether foreign fees call for Forms 1042 and 1042-S, and check the contractor's Form 1099 reporting.
Different for you?
- You will file the return yourself: see filing a corporate return from abroad.
- Earlier years were never filed or a notice arrived: see missed foreign-owner filings and penalties.
- You need the complete annual filing list: see foreign-owned C corporation filing.
- The books, owner loans, or cross-border payments remain unresolved: gather the records above and discuss the corporate tax service before booking the return.
Figures on this page
| Figure | Value | Source |
|---|---|---|
| Calendar-year C corporation extended Form 1120 filing date For a calendar-year 2026 domestic C corporation with a timely, valid Form 7004 extension, the return is due October 15, 2027. Form 7004 does not extend payment time; weekend and holiday rules can move the date in other years. | October 15 Tax year 2026 | IRS: Instructions for Form 7004 Checked |
| Foreign ownership that makes a US corporation a Form 5472 reporting corporation At least this share of vote or value held by one foreign person, directly or indirectly, at any time in the tax year. A single-member LLC wholly owned by one foreign person is treated as such a corporation. | 25% | IRS: Instructions for Form 5472 Checked |
| FBAR filing threshold Total maximum value of all foreign financial accounts at any time in the calendar year; an FBAR is required when the total is more than this | $10,000 | FinCEN: Report Foreign Bank and Financial Accounts Checked |
| Initial filing date for qualifying calendar-year domestic corporation with business and books abroad For a calendar-year 2026 domestic corporation that transacts its business and keeps its books and records outside the United States and Puerto Rico, the automatic extension to file and pay runs to June 15, 2027 under Regulations section 1.6081-5. A timely Form 7004 can add four months to file, not pay. | June 15 Tax year 2026 | IRS: Instructions for Form 7004 Checked |
| Form 5472 penalty for failure to file or keep records For tax years beginning after December 31, 2017. Per reporting corporation, per tax year. A substantially incomplete Form 5472 counts as a failure to file. IRC 6038A(d)(1); Treas. Reg. 1.6038A-4(a). | $25,000 | IRS: Instructions for Form 5472 Checked |
Primary sources
- IRS: Instructions for Form 1120
- IRS: Instructions for Form 5472
- IRS: Choosing a tax professional
- IRS: Understanding preparer credentials
- IRS: Form 8879-CORP (PDF)
- IRS: Form 2848
- IRS: Instructions for Form 7004
- IRS: About Form 1042
- IRS: About Form 1042-S
- FinCEN: Report Foreign Bank and Financial Accounts
- Delaware: Annual report and tax instructions
- eCFR: 26 CFR 1.6001-1
- eCFR: 26 CFR 1.6038A-1
- eCFR: 26 CFR 1.6038A-3
- IRS: Quick tips for picking a tax pro
About this guide
Published by Cloud Accounting under standing professional approval. This version has no separately recorded personal review. It explains general rules for the tax year shown. It is not advice for your situation.
Changes
- : First published.