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Foreign Reporting Requirement Due May 29, 2020

Richard J. Nelson, CPA
Richard J. Nelson, CPA Director, Tax Strategies

It is truly a year for the ages. As if there weren't enough challenges with being stuck in our homes and dealing with all of the current uncertainties, along comes a governmental survey from the U.S. Department of Commerce's Bureau of Economic Analysis (the “BEA”).

Every five years, the BEA conducts a survey concerning the extent of foreign investments by U.S. persons. You may or may not have been notified by the BEA of your filing requirement. Regardless of whether you have been contacted by the BEA, if you meet the requirements, you are required to participate in the survey by filing a Form BE-10 report.

The penalties for not filing are significant, ranging from $2,500 to $25,000 (adjusted for inflation). Individuals who willfully fail to file may be subject to a civil penalty of $10,000 and may be imprisoned for no more than one year.

Generally, form BE-10 is required to be filed by any U.S. person who had a foreign affiliate in which they had direct or indirect ownership or control of at least 10 percent of the voting stock of an incorporated foreign business enterprise, or an equivalent interest in an unincorporated foreign business enterprise, at end of the U.S. person's 2019 fiscal year. A U.S. person is defined as any person resident in the United States or subject to the jurisdiction of the United States, including any individual, branch, partnership, associated group, association, estate, trust, corporation, or other organization.

U.S. reporters with less than 50 foreign affiliates must file Form BE-10 by May 29, 2020. U.S. reporters with more than 50 foreign affiliates must file Form BE-10 by June 30, 2020. We have unofficial guidance that you can request an extension until August 31, 2020.

The COVID-19 outbreak has temporarily reduced the BEA’s capacity to send and receive paper mail. They may be contacting survey respondents via email. During this time, the BEA has suggested that completed surveys be submitted using its secure eFile system or by fax at 301-278-9502. Extension requests must be submitted via eFile and must be received by the filing deadline. If necessary, estimated numbers can be used in completing the survey.

Additional information and the BE-10 forms can be found at the BEA’s website here.

Please contact your Kreischer Miller Tax Strategies professional for any questions about this requirement or for assistance in completing Form BE-10.

Information contained in this alert should not be construed as the rendering of specific accounting, tax, or other advice. Material may become outdated and anyone using this should research and update to ensure accuracy. In no event will the publisher be liable for any damages, direct, indirect, or consequential, claimed to result from use of the material contained in this alert. Readers are encouraged to consult with their advisors before making any decisions.

Contact the Author

Richard J. Nelson, CPA

Richard J. Nelson, CPA

Director, Tax Strategies

Business Tax Specialist, Individual Tax Specialist, Estates, Trusts, & Gifts Specialist, International Tax Specialist

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