Tax Code Amendment:

A Change in Foreign-Owned U.S. Corporations' Reporting Requirements

GGD-86-19: Published: Nov 1, 1985. Publicly Released: Dec 2, 1985.

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Jennie S. Stathis
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In response to a congressional request, GAO studied Internal Revenue Service (IRS) tax compliance activities with respect to foreign-owned U.S. corporations.

GAO found that the present language of the section of the Internal Revenue Code (IRC) that requires certain foreign-owned U.S. corporations to report transactions with related domestic or foreign corporations does not require the reporting of transactions with noncorporate entities such as trusts and partnerships, which GAO believes should be reported even if their number is relatively small.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The proposed language suggested in the report was included in the Tax Reform Act of 1986, which was passed on October 22, 1986.

    Matter: Congress should amend section 6038A of IRC to help IRS enforce the tax laws by identifying transactions between foreign-owned U.S. corporations and their noncorporate foreign owners.


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