Acully Incorporated

09/29/2026

If you are a foreigner owning a U.S. corporation or a U.S. disregarded entity, Form 5472 will apply to you. A new memo from the IRS Office of Chief Counsel changes how penalty abatement requests are reviewed. You will learn what the memo says and why some common excuses no longer work.

What Is Form 5472 and Who Must File It?

Form 5472 is an information return. It reports transactions between a reporting corporation and a foreign or domestic related party.

You must file it if your U.S. corporation is 25 percent or more foreign-owned. You must also file it if you own a foreign-owned U.S. disregarded entity. A disregarded entity is a business, often a single-member LLC, that is not treated as separate from its owner for tax purposes.

For a full breakdown of related forms, see our guide to U.S. tax forms for foreign-owned businesses.

What Happens If You Miss the Deadline?

If you are a foreigner owning a U.S. corporation or a U.S. disregarded entity, Form 5472 will apply to you. A new memo from the IRS Office of Chief Counsel chan

09/24/2026

If you sell to U.S. customers through a U.S. entity, Form 5472 rules may apply to you. Missing this form can trigger a steep penalty. This post explains what is at stake and what recent guidance says about fixing a problem.

What Is Form 5472 and Who Must File It?

Form 5472 reports transactions between certain U.S. businesses and their foreign owners or related parties. A disregarded entity is a business, often a single-member LLC, that the IRS treats as part of its owner for tax purposes.

Under IRC Section 6038A, this filing requirement applies to:

- U.S. corporations that are 25% or more foreign owned

- Foreign-owned U.S. disregarded entities engaged in a U.S. trade or business

- Related parties that had reportable transactions during the year

Many foreign e-commerce sellers use a U.S. LLC to hold a bank account or process payments. That structure can create a Form 5472 filing duty, even with no U.S. tax due. The form is filed with a pro forma Form 1120, a U.S.

If you sell to U.S. customers through a U.S. entity, Form 5472 rules may apply to you. Missing this form can trigger a steep penalty. This post explains what is

09/01/2026

Hiring your first employee is an exciting milestone for any business. It often means your company is growing and you are ready to bring in extra support. Before you make an offer, however, it's important to understand the tax responsibilities that come with having employees.

Make Sure You Classify Workers Correctly

One of the first decisions you'll need to make is whether the person you're hiring should be treated as an internal employee or an independent contractor. The distinction matters because employees and contractors are taxed very differently.

Employees typically have income taxes, social security, and Medicare taxes withheld form their paychecks. Independent contractors are generally responsible for paying and managing their own taxes for the year. If you misclassify you workers, it can lead to penalties, back taxes, and additional reporting requirements. It is worth the time to determine the correct classification for your worker from the start.

Hiring your first employee is an exciting milestone for any business. It often means your company is growing and you are ready to bring in extra support. Before

08/25/2026

Giving gifts to clients, employees, or business partners is a great way to strengthen your relationship and show appreciation. However, many business owners are surprised to learn that not all business gifts are fully deductible. The IRS has specific rules regarding what qualifies as a business gift and how much can be deducted each year.

Understanding these rules can help you avoid unexpected issues at tax time while still allowing you to invest in important business relationships.

What Counts as a Business Gift?

A business gift is generally any item given in the course of conducting business.
Gift examples include:

- Holiday gifts for clients

- Gift baskets or branded merchandise

- Tickets to events

- Gift cards for employees

- Thank you gifts for vendors or referral partners

The tax treatment of a gift often depends on who receives it and the purpose behind it (holiday, birthday, etc).

08/18/2026

Expanding into the United States comes with plenty of opportunities, but it also introduces a challenge that many foreign business owners do not expect: building credit. Even successful companies with strong financial histories in their home countries often start from scratch when entering the American market. Establishing business credit early can make it easier to open bank accounts, qualify for financing, secure leases, and work with suppliers.

If you are planning to operate in the U.S., understanding how the credit system works can help position your business for long-term growth.

Why U.S. Business Credit Matters

Business credit serves as a financial track record for your company. Lenders, vendors, landlords, and even potential partners may review your credit history before deciding to work with you.

08/11/2026

When reviewing your business finances, it's important to understand that gross revenue and taxable income are not the same thing. Many business owners assume that every dollar their company earns will be taxed, but your actual tax liability is generally based on taxable income after eligible deductions and expenses are taken into account.

Understanding the distinction between these two numbers can help you plan for taxes, cash flow, and making informed decisions.

What Is Gross Revenue?

Gross revenue is the total amount of money your business brings in before any expenses are deducted. This includes income from sales, services, and any other business activities.

For example, if your company generated $500,000 in sales during the year, your gross revenue would be $500,000. At this stage, expenses such as payroll, rent, software subscriptions, and office supplies have not yet been factored in.

When reviewing your business finances, it's important to understand that gross revenue and taxable income are not the same thing. Many business owners assume th

08/04/2026

Taking out a business loan can provide the funding needed to expand operations, buy supplies, hire employees, or manage day-to-day expenses. While loans can be an important tool for growth, many business owners are unsure about how borrowed money affects their taxes.

The good news is that receiving a loan generally does not increase your taxable income. However, how you use the funds and repay the loan can have tax implications that are important to understand.

Are Business Loans Taxable?

In most cases, business loans are not considered taxable income. Because the money must eventually be repaid, the IRS doesn't treat loan proceeds the same way as revenue from sales and services.

For example, if your company receives a $100,000 loan from a bank, that amount isn't added to your taxable income simply because it went into your bank account. Instead, the loan creates a liability that your business is responsible for repaying over time.

What Parts of a Loan Can Be Deducted?

Taking out a business loan can provide the funding needed to expand operations, buy supplies, hire employees, or manage day-to-day expenses. While loans can be

07/28/2026

Investing in the United States can create tax obligations that many foreign investors do not expect. The rules vary depending on the type of investment, how much involvement you have in the business, and whether you earn income from U.S. sources.

Understanding the basics can help you avoid penalties and make better decisions before investing.

What Counts as U.S.-Sourced Income?

Foreign investors may owe U.S. tax on income earned in the United States. This can include:

- Rental income from U.S. property

- Dividends from U.S. companies

- Interest payments

- Income from a U.S. business

- Capital gains in certain situations

The tax treatment depends on where the income comes from and the type of investment you make.

Do Foreign Investors Need to File a Tax Return?

Not every foreign investor has to file a U.S. tax return, but many do.

For example, you may need to file if you:

- Own part of a U.S. business

- Receive rental income from property in the U.S.

- Sell U.S.

Investing in the United States can create tax obligations that many foreign investors do not expect. The rules vary depending on the type of investment, how muc

07/09/2026

Getting an Employer Identification Number (EIN) is usually one of the first steps after forming a business. While many applications are approved quickly, others are delayed or rejected because of simple errors. Understanding the most common issues can help you avoid unnecessary setbacks and get your business up and running sooner.

Common Reasons an EIN Application Is Rejected

1. The Business Name Doesn't Match
The legal business name on the EIN application must exactly match the name registered with the state. Even small differences, such as punctuation or abbreviations, can create problems.

2. The Entity Type is Incorrect
Choosing the wrong entity type can cause processing issues and may lead to additional tax filing complications later on. Make sure your application reflects how your business was formed.

3. Responsible Party Information is Incorrect
The IRS requires accurate information for the responsible party.

Getting an Employer Identification Number (EIN) is usually one of the first steps after forming a business. While many applications are approved quickly, others

07/08/2026

If you use your personal or business car for work, you may be able to deduct some of the costs associated with driving. Whether it's used to meet clients, travel between job sites, making deliveries, or running business errands, those miles can add up to meaningful tax savings.

The IRS allows most business owners to choose between two methods for claiming vehicle expenses: the standard mileage rate or the actual expense method. Knowing how each works can help you maximize your deduction while staying compliant with the tax rules.

Understanding the Standard Mileage Rate

The standard mileage rate is the simpler of the two. Instead of tracking every dollar spent on your car throughout the year, you multiple your business miles by the IRS mileage rate for that tax year.

If you use your personal or business car for work, you may be able to deduct some of the costs associated with driving. Whether it's used to meet clients, trave