US Code

Public Law 119-73 (01/23/2026)

26 U.S.C. § 6038

Information reporting with respect to certain foreign corporations and partnerships

(a)

Requirement

(1)

In general

Every United States person shall furnish, with respect to any foreign business entity which such person controls, such information as the Secretary may prescribe relating to—
(A)
the name, the principal place of business, and the nature of business of such entity, and the country under whose laws such entity is incorporated (or organized in the case of a partnership);
(B)
1
1 See References in Text note below.
in the case of a foreign corporation, its post-1986 undistributed earnings (as defined in section 902(c)); 
(C)
a balance sheet for such entity listing assets, liabilities, and capital;
(D)
transactions between such entity and—
(i)
such person,
(ii)
any corporation or partnership which such person controls, and
(iii)
any United States person owning, at the time the transaction takes place—
(I)
in the case of a foreign corporation, 10 percent or more of the value of any class of stock outstanding of such corporation, and
(II)
in the case of a foreign partnership, at least a 10-percent interest in such partnership; and
(E)
(i)
in the case of a foreign corporation, a description of the various classes of stock outstanding, and a list showing the name and address of, and number of shares held by, each United States person who is a shareholder of record owning at any time during the annual accounting period 5 percent or more in value of any class of stock outstanding of such foreign corporation, and
(ii)
information comparable to the information described in clause (i) in the case of a foreign partnership.
The Secretary may also require the furnishing of any other information which is similar or related in nature to that specified in the preceding sentence or which the Secretary determines to be appropriate to carry out the provisions of this title.
(2)

Period for which information is to be furnished, etc.

The information required under paragraph (1) shall be furnished for the annual accounting period of the foreign business entity ending with or within the United States person’s taxable year. The information so required shall be furnished at such time and in such manner as the Secretary shall prescribe.

(3)

Limitation

No information shall be required to be furnished under this subsection with respect to any foreign business entity for any annual accounting period unless the Secretary has prescribed the furnishing of such information on or before the first day of such annual accounting period.

(4)

Information required from certain shareholders in certain cases

If any foreign corporation is treated as a controlled foreign corporation for any purpose under subpart F of part III of subchapter N of chapter 1, the Secretary may require any United States person treated as a United States shareholder of such corporation for any purpose under subpart F to furnish the information required under paragraph (1).

(5)

Information required from 10-percent partner of controlled foreign partnership

In the case of a foreign partnership which is controlled by United States persons holding at least 10-percent interests (but not by any one United States person), the Secretary may require each United States person who holds a 10-percent interest in such partnership to furnish information relating to such partnership, including information relating to such partner’s ownership interests in the partnership and allocations to such partner of partnership items.

(b)

Dollar penalty for failure to furnish information

(1)

In general

If any person fails to furnish, within the time prescribed under paragraph (2) of subsection (a), any information with respect to any foreign business entity required under paragraph (1) of subsection (a), such person shall pay a penalty of $10,000 for each annual accounting period with respect to which such failure exists.

(2)

Increase in penalty where failure continues after notification

If any failure described in paragraph (1) continues for more than 90 days after the day on which the Secretary mails notice of such failure to the United States person, such person shall pay a penalty (in addition to the amount required under paragraph (1)) of $10,000 for each 30-day period (or fraction thereof) during which such failure continues with respect to any annual accounting period after the expiration of such 90-day period. The increase in any penalty under this paragraph shall not exceed $50,000.

(c)

Penalty of reducing foreign tax credit

(1)

In general

If a United States person fails to furnish, within the time prescribed under paragraph (2) of subsection (a), any information with respect to any foreign business entity required under paragraph (1) of subsection (a), then—
(A)
in applying section 901 (relating to taxes of foreign countries and possessions of the United States) to such United States person for the taxable year, the amount of taxes (other than taxes reduced under subparagraph (B)) paid or deemed paid (other than those deemed paid under section 904(c)) to any foreign country or possession of the United States for the taxable year shall be reduced by 10 percent, and
(B)
in the case of a foreign business entity which is a foreign corporation, in applying section 960 to any such United States person which is a corporation (or to any person who acquires from any other person any portion of the interest of such other person in any such foreign corporation, but only to the extent of such portion) for any taxable year, the amount of taxes paid or deemed paid by each foreign corporation with respect to which such person is required to furnish information during the annual accounting period or periods with respect to which such information is required under paragraph (2) of subsection (a) shall be reduced by 10 percent.
If such failure continues 90 days or more after notice of such failure by the Secretary to the United States person, then the amount of the reduction under this paragraph shall be 10 percent plus an additional 5 percent for each 3-month period, or fraction thereof, during which such failure to furnish information continues after the expiration of such 90-day period.
(2)

Limitation

The amount of the reduction under paragraph (1) for each failure to furnish information with respect to a foreign business entity required under subsection (a)(1) shall not exceed whichever of the following amounts is the greater:
(A)
$10,000, or
(B)
the income of the foreign business entity for its annual accounting period with respect to which the failure occurs.
(3)

Coordination with subsection (b)

The amount of the reduction which (but for this paragraph) would be made under paragraph (1) with respect to any annual accounting period shall be reduced by the amount of the penalty imposed by subsection (b) with respect to such period.

(4)

Special rules

(A)
No taxes shall be reduced under this subsection more than once for the same failure.
(B)
For purposes of this subsection and subsection (b), the time prescribed under paragraph (2) of subsection (a) to furnish information (and the beginning of the 90-day period after notice by the Secretary) shall be treated as being not earlier than the last day on which (as shown to the satisfaction of the Secretary) reasonable cause existed for failure to furnish such information.
(d)

Two or more persons required to furnish information with respect to same foreign corporation

Where, but for this subsection, two or more United States persons would be required to furnish information under subsection (a) with respect to the same foreign business entity for the same period, the Secretary may by regulations provide that such information shall be required only from one person. To the extent practicable, the determination of which person shall furnish the information shall be made on the basis of actual ownership of stock.

(e)

Definitions

For purposes of this section—
(1)

Foreign business entity

The term “foreign business entity” means a foreign corporation and a foreign partnership.

(2)

Control of corporation

A person is in control of a corporation if such person owns stock possessing more than 50 percent of the total combined voting power of all classes of stock entitled to vote, or more than 50 percent of the total value of shares of all classes of stock, of a corporation. If a person is in control (within the meaning of the preceding sentence) of a corporation which in turn owns more than 50 percent of the total combined voting power of all classes of stock entitled to vote of another corporation, or owns more than 50 percent of the total value of the shares of all classes of stock of another corporation, then such person shall be treated as in control of such other corporation. For purposes of this paragraph, the rules prescribed by section 318(a) for determining ownership of stock shall apply; except that—
(A)
subparagraphs (A), (B), and (C) of section 318(a)(3) shall not be applied so as to consider a United States person as owning stock which is owned by a person who is not a United States person, and
(B)
in applying subparagraph (C) of section 318(a)(2), the phrase “10 percent” shall be substituted for the phrase “50 percent” used in subparagraph (C).
(3)

Partnership-related definitions

(A)

Control

A person is in control of a partnership if such person owns directly or indirectly more than a 50 percent interest in such partnership.

(B)

50-percent interest

For purposes of subparagraph (A), a 50-percent interest in a partnership is—
(i)
an interest equal to 50 percent of the capital interest, or 50 percent of the profits interest, in such partnership, or
(ii)
to the extent provided in regulations, an interest to which 50 percent of the deductions or losses of such partnership are allocated.
For purposes of the preceding sentence, rules similar to the rules of section 267(c) (other than paragraph (3)) shall apply.
(C)

10-percent interest

A 10-percent interest in a partnership is an interest which would be described in subparagraph (B) if “10 percent” were substituted for “50 percent” each place it appears.

(4)

Annual accounting period

The annual accounting period of a foreign business entity is the annual period on the basis of which such foreign business entity regularly computes its income in keeping its books. In the case of a specified foreign business entity (as defined in section 898), the taxable year of such foreign business entity shall be treated as its annual accounting period.

(f)

Cross references

(1)
For provisions relating to penalties for violations of this section, see section 7203.
(2)
For definition of the term “United States person”, see section 7701(a)(30).

Pub. L. 86–780, § 6(a)74 Stat. 1014Pub. L. 87–834, § 20(a)76 Stat. 1059Pub. L. 88–554, § 4(b)(6)78 Stat. 764Pub. L. 94–455, title X, § 1031(b)(5)90 Stat. 1623Pub. L. 97–248, title III, § 338(a)96 Stat. 631Pub. L. 99–514, title XII100 Stat. 2530Pub. L. 101–239, title VII, § 7712(a)103 Stat. 2393Pub. L. 101–508, title XI, § 11701(f)104 Stat. 1388–508Pub. L. 104–188, title I, § 1704(f)(5)(A)110 Stat. 1880Pub. L. 105–34, title XI, § 1142(a)111 Stat. 981–983Pub. L. 105–206, title VI, § 6011(f)112 Stat. 818Pub. L. 115–97, title I, § 14301(c)(36)131 Stat. 2224(Added , , ; amended , , ; , , ; , title XIX, § 1906(b)(13)(A), , , 1834; –(c), , ; , §§ 1202(c), 1245(b)(5), , , 2581; , , ; , , ; , (t)(40), (46), , , 1889; –(e)(2), , ; , , ; , (37), , .)

Editorial Notes

References in Text

Pub. L. 115–97, title I, § 14301(a)131 Stat. 2221Section 902, referred to in subsec. (a)(1)(B), was repealed by , , .

Prior Provisions

section 6040 of this titleA prior section 6038 was renumbered .

Amendments

Pub. L. 115–97, § 14301(c)(36)2017—Subsec. (c)(1)(B). , substituted “section 960” for “sections 902 (relating to foreign tax credit for corporate stockholder in foreign corporation) and 960 (relating to special rules for foreign tax credit)”.

Pub. L. 115–97, § 14301(c)(37)Subsec. (c)(4)(C). , struck out subpar. (C) which read as follows: “In applying subsections (a) and (b) of section 902, and in applying subsection (a) of section 960, the reduction provided by this subsection shall not apply for purposes of determining the amount of post-1986 undistributed earnings.”

Pub. L. 105–206, § 6011(f)(1)1998—Subsec. (a)(2). , struck out “by regulations” before “prescribe”.

Pub. L. 105–206, § 6011(f)(2)Subsec. (a)(3). , substituted “the Secretary has prescribed the furnishing of such information on or before the first day of such annual accounting period.” for “such information was required to be furnished under regulations in effect on the first day of such annual accounting period.”

Pub. L. 105–206, § 6011(f)(3)Subsec. (e)(4). , substituted “such foreign business entity” for “such corporation” in two places.

Pub. L. 105–34, § 1142(a)1997—, inserted “reporting” after “Information” and “and partnerships” after “corporations” in section catchline.

Pub. L. 105–34, § 1142(a)Subsec. (a). , reenacted heading without change.

Pub. L. 105–34, § 1142(a)Subsec. (a)(1). , reenacted heading without change and amended text generally. Prior to amendment, par. (1) consisted of subpars. (A) to (E) relating to general requirements of information with respect to foreign corporations.

Pub. L. 105–34, § 1142(e)(1)(A)Subsec. (a)(2), (3). , substituted “foreign business entity” for “foreign corporation” in pars. (2) and (3).

Pub. L. 105–34, § 1142(d)Subsec. (a)(5). , added par. (5).

Pub. L. 105–34, § 1142(c)Subsec. (b). , (e)(1)(B), substituted “foreign business entity” for “foreign corporation” in par. (1), substituted “$10,000” for “$1,000” in pars. (1) and (2), and substituted “$50,000” for “$24,000” in par. (2).

Pub. L. 105–34, § 1142(e)(1)(C)Subsec. (c)(1). , (2), substituted “foreign business entity” for “foreign corporation” in introductory provisions and inserted “in the case of a foreign business entity which is a foreign corporation,” after “(B)” in subpar. (B).

Pub. L. 105–34, § 1142(e)(1)(C)Subsec. (c)(2). , substituted “foreign business entity” for “foreign corporation” in introductory provisions and in subpar. (B).

Pub. L. 105–34, § 1142(e)(1)(D)Subsec. (d). , substituted “foreign business entity” for “foreign corporation”.

Pub. L. 105–34, § 1142(b)Subsec. (e). , added pars. (1) and (3), redesignated former pars. (1) and (2) as (2) and (4), respectively, inserted “of corporation” after “Control” in par. (2) heading, and substituted “foreign business entity” for “foreign corporation” in two places in par. (4).

Pub. L. 104–188, § 1704(f)(5)(A)1996—Subsec. (a)(1)(E), (F). , substituted period for “, and” at end of subpar. (E) and struck out subpar. (F) which read as follows: “such information as the Secretary may require for purposes of carrying out the provisions of section 453C.”

Pub. L. 104–188, § 1704(t)(40)Subsec. (e). , redesignated subsec. (e), relating to cross references, as (f).

Pub. L. 104–188, § 1704(t)(46)Pub. L. 101–508Subsec. (e)(2). , made technical amendment to directory language of . See 1990 Amendment note below.

Pub. L. 104–188, § 1704(t)(40)Subsec. (f). , redesignated subsec. (e), relating to cross references, as (f).

Pub. L. 101–508Pub. L. 104–188, § 1704(t)(46)1990—Subsec. (e)(2). , as amended by , in subsec. (e) relating to definitions, inserted at end of par. (2) “In the case of a specified foreign corporation (as defined in section 898), the taxable year of such corporation shall be treated as its annual accounting period.”

Pub. L. 101–239, § 7712(a)(2)1989—Subsec. (a)(1). , inserted before period at end “or which the Secretary determines to be appropriate to carry out the provisions of this title.”

Pub. L. 101–239, § 7712(a)(1)Subsec. (a)(4). , added par. (4).

Pub. L. 99–514, § 1202(c)(1)1986—Subsec. (a)(1)(B). , amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the accumulated profits (as defined in section 902(c)) of such foreign corporation, including the items of income (whether or not included in gross income under chapter 1), deductions (whether or not allowed in computing taxable income under chapter 1), and any other items taken into account in computing such accumulated profits;”.

Pub. L. 99–514, § 1245(b)(5)Subsec. (a)(1)(F). , added subpar. (F).

Pub. L. 99–514, § 1202(c)(2)Subsec. (c)(4)(C). , substituted “post-1986 undistributed earnings” for “accumulated profits in excess of income, war profits, and excess profits taxes”.

Pub. L. 97–248, § 338(c)(2)1982—Subsec. (a)(1). , substituted “subsection (e)(1)” for “subsection (d)(1)”.

Pub. L. 97–248, § 338(a)Subsec. (b). , added subsec. (b). Former subsec. (b) redesignated (c).

Pub. L. 97–248, § 338(a)Subsec. (c). , (b), (c)(1), (3), redesignated former subsec. (b) as (c), substituted “Penalty of reducing foreign tax credit” for “Effect of failure to furnish information” in heading, inserted “of such failure” after “90 days or more after notice” in par. (1), added par. (3), redesignated former par. (3) as (4), and in par. (4) inserted reference to subsection (b) in subpar. (B). Former subsec. (c) redesignated (d).

Pub. L. 97–248, § 338(a)Subsecs. (d), (e). , redesignated former subsec. (c) as (d). Former subsec. (d), relating to definitions, redesignated (e).

Pub. L. 94–455, § 1906(b)(13)(A)1976—Subsecs. (a), (b). , struck out “or his delegate” after “Secretary” wherever appearing.

Pub. L. 94–455, § 1031(b)(5)Subsec. (b)(1). , substituted in subpar. (A) “section 904(c)” for “section 904(d)”.

Pub. L. 94–455, § 1906(b)(13)(A)Subsec. (c). , struck out “or his delegate” after “Secretary”.

Pub. L. 88–5541964—Subsec. (d)(1). substituted “subparagraphs (A), (B), and (C) of section 318(a)(3)” for “the second sentence of subparagraphs (A) and (B), and clause (ii) of subparagraph (C), of section 318(a)(2)” in subpar. (A), and deleted “clause (i) of” after “in applying” in subpar. (B).

Pub. L. 87–8341962—Subsec. (a)(1). , among other changes, substituted in introductory provisions “Every United States person shall furnish” for “A domestic corporation shall furnish”, in subpar. (D)(i) “such person” for “any foreign corporation controlled by the domestic corporation”, in subpar. (D)(ii) “any other corporation which such person controls” for “any foreign subsidiary of a foreign corporation controlled by the domestic corporation”, in subpar. (D)(iii) “any United States person owning, at the time the transaction takes place, 10 percent or more of the value of any class of stock outstanding of such foreign corporation” for “the domestic corporation or any shareholder of the domestic corporation owning at the time the transaction takes place 10 percent or more of the value of any class of stock outstanding of the domestic corporation”, and in subpar. (E) “each United States person who is a shareholder” for “each citizen or resident of the United States and each domestic corporation who is a shareholder”, and struck out provisions throughout the subsection which related to foreign subsidiaries.

Pub. L. 87–834Subsec. (a)(2). substituted provisions requiring the information to be furnished for the annual accounting period ending with or within the United States person’s taxable year for provisions which required such information to be furnished for the annual accounting period ending with or within the domestic corporation’s taxable year, and struck out provisions which related to the furnishing of information in the case of foreign subsidiaries.

Pub. L. 87–834Subsec. (a)(3). struck out provisions which related to foreign subsidiaries.

Pub. L. 87–834Subsec. (b). , among other changes, substituted “If a United States person fails to furnish” for “If a domestic corporation fails to furnish” in the opening provisions, inserted provisions relating to reduction of taxes in applying sections 901 and 960 of this title, to the maximum amount of reduction under par. (1) for each failure to furnish information with respect to a foreign corporation required under subsec. (a)(1), and making the reduction provided by subsec. (b) inapplicable, in applying subsecs. (a) and (b) of section 902 and subsec. (a) of section 960, for purposes of determining the amount of accumulated profits in excess of income, war profits, and excess profits taxes, and eliminated provisions which related to the furnishing of information with respect to foreign subsidiaries.

Pub. L. 87–834Subsec. (c). substituted provisions empowering the Secretary to provide for the furnishing of information by only one person where two or more persons would be required to furnish information under subsec. (a) with respect to the same foreign corporation for the same period for provisions which required a domestic corporation if at any time during its taxable year owned more than 50 percent of the voting stock of a foreign corporation to be deemed to be in control of such foreign corporation, and in the case of a foreign corporation if at any time during its annual accounting period owned more than 50 percent of the voting stock of another foreign corporation, that such other corporation shall be considered a foreign subsidiary of the corporation owning such stock. The provisions relating to control are now contained in subsec. (d) of this section.

Pub. L. 87–834Subsec. (d). added par. (1) which was formerly covered in part by subsec. (c) of this section, designated existing provisions as par. (2), and eliminated from par. (2) provisions which related to the annual accounting period of a foreign subsidiary.

Pub. L. 87–834Subsec. (e). designated existing provisions as par. (1) and added par. (2).

Statutory Notes and Related Subsidiaries

Effective Date of 2017 Amendment

Pub. L. 115–97section 14301(d) of Pub. L. 115–97section 78 of this titleAmendment by applicable to taxable years of foreign corporations beginning after , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end, see , set out as a note under .

Effective Date of 1998 Amendment

Pub. L. 105–206Pub. L. 105–34section 6024 of Pub. L. 105–206section 1 of this titleAmendment by effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, , to which such amendment relates, see , set out as a note under .

Effective Date of 1997 Amendment

Pub. L. 105–34section 1142(f) of Pub. L. 105–34section 318 of this titleAmendment by applicable to annual accounting periods beginning after , see , set out as a note under .

Effective Date of 1990 Amendment

Pub. L. 101–508Pub. L. 101–239, title VIIsection 11701(n) of Pub. L. 101–508section 42 of this titleAmendment by effective, except as otherwise provided, as if included in the provision of the Revenue Reconciliation Act of 1989, , to which such amendment relates, see , set out as a note under .

Effective Date of 1989 Amendment

Pub. L. 101–239, title VII, § 7712(b)103 Stat. 2394

“The amendments made by subsection (a) [amending this section] shall apply to returns and statements the due date for which (determined without regard to extensions) is after .”
, , , provided that:

Effective Date of 1986 Amendment

section 1202(c) of Pub. L. 99–514section 951(a) of this titlesection 1202(e) of Pub. L. 99–514section 960 of this titleAmendment by applicable to distributions by foreign corporations out of, and to inclusions under attributable to, earnings and profits for taxable years beginning after , see , set out as a note under .

section 1245(b)(5) of Pub. L. 99–514section 1245(c) of Pub. L. 99–514section 6038A of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .

Effective Date of 1982 Amendment

Pub. L. 97–248, title III, § 338(d)96 Stat. 631

“The amendments made by this section [amending this section] shall apply with respect to information for annual accounting periods ending after the date of the enactment of this Act [].”
, , , provided that:

Effective Date of 1964 Amendment

Pub. L. 88–554section 4(c) of Pub. L. 88–554section 318 of this titleAmendment by effective , except that for purposes of sections 302 and 304 of this title, such amendments shall not apply to distributions in payment for stock acquisitions or redemptions, if such acquisitions or redemptions occurred before , see , set out as a note under .

Effective Date of 1962 Amendment

Pub. L. 87–834, § 20(e)(1)76 Stat. 1063

“The amendments made by subsection (a) [amending this section] shall apply with respect to annual accounting periods of foreign corporations beginning after .”
, , , provided that:

Effective Date

Pub. L. 86–780, § 6(c)74 Stat. 1016Pub. L. 99–514, § 2100 Stat. 2095

section 902 of this title“The amendments made by subsection (a) [enacting this section and amending ] shall apply to taxable years of domestic corporations beginning after , with respect to information relating to a foreign corporation or a foreign subsidiary described in section 6038(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) for its annual accounting periods beginning after .”
, , , as amended by , , , provided that: