New IRS Guidance about ‘Liberal’ Form 5472 Penalty Relief for Small Corporations

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New IRS Guidance about ‘Liberal’ Form 5472 Penalty Relief for Small Corporations

June 30, 2026

INTERNATIONAL TAX JOURNAL

Taxpayers overlook filing duties, the IRS imposes penalties, and actions are taken to mitigate the financial pain.  Some penalties are harder to alleviate than others, and those related to international information returns are particularly tricky.  For example, certain corporations must file annual Forms 5472 to disclose transactions with related parties.  Administrative and court rulings show that eliminating penalties for unfiled Forms 5472 has been difficult traditionally.  However, the IRS released new guidance in 2026 about how to “liberally” apply the reasonable-cause-and-good-faith exception to penalties in cases involving small corporations.  This article by Partner Hale Sheppard provides an overview of Form 5472 filing duties, analyzes the new IRS guidance, and explains why it is so important.

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halesheppard@eversheds-sutherland

Hale E. Sheppard

Partner

Atlanta, United States

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