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August 29, 2004

US Enterepreneurs Living Abroad May Need To File Special Forms

If you live abroad and have your own business, you may need to file special forms with your tax return. If you own more than 10% of a foreign corporation, you may be required to file Form 5471 or pay penalties of $10,000 US for each failure to file the form. This forms reports on the ownership, income and expenses of the foreign corporation.

If you operate through a foreign partnership, you may be required to file Form 8865 which reports on the ownership, income and expenses of that partnership. Again failure to file this form can result in a $10,000 per year penalty.

If you have a foreign bank account, stock market account, or other financial accounts that any tiem during the year had more than $10,000US in it or a group of such accounts, you must file Form TDF 90.22-1 which is not filed with your tax return, but is due 6/30 of each year. It reports information on the account and its ownership.