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Title 26 — Internal Revenue CodeRelease 119-73

§6038C Information with respect to foreign corporations engaged in U.S. business

Title 26 › Subtitle Subtitle F— - Procedure and Administration › Chapter CHAPTER 61— - INFORMATION AND RETURNS › Subchapter Subchapter A— - Returns and Records › Part PART III— - INFORMATION RETURNS › Subpart Subpart A— - Information Concerning Persons Subject to Special Provisions › § 6038C

Last updated Apr 6, 2026|Official source

Summary

A foreign corporation that does business in the United States during a tax year must give the Secretary the information and keep the records the Secretary requires, at the times and in the way the Secretary orders. The required information includes the types listed in a related rule and any other items the Secretary asks about. The corporation may have someone else keep the records for it. If the corporation does not give the information or keep the records, the penalties and rules in the related rule apply. For transactions with a related foreign person, that related person can let the corporation act as a limited agent so the Secretary can examine records, get testimony, or use a summons. If the Secretary issues a valid summons, it is not thrown out, and the corporation does not comply after a certified or registered mail notice, then the Secretary may decide the tax treatment of the transaction on the Secretary’s own. The words “related party,” “foreign person,” and “records” use the meanings given in the related rule.

Full Legal Text

Title 26, §6038C

Internal Revenue Code — Source: USLM XML via OLRC

(a)If a foreign corporation (hereinafter in this section referred to as the “reporting corporation”) is engaged in a trade or business within the United States at any time during a taxable year—
(1)such corporation shall furnish (at such time and in such manner as the Secretary shall by regulations prescribe) the information described in subsection (b), and
(2)such corporation shall maintain (at the location, in the manner, and to the extent prescribed in regulations) such records as may be appropriate to determine the liability of such corporation for tax under this title as the Secretary shall by regulations prescribe (or shall cause another person to so maintain such records).
(b)For purposes of subsection (a), the information described in this subsection is—
(1)the information described in section 6038A(b), and
(2)such other information as the Secretary may prescribe by regulations relating to any item not directly connected with a transaction for which information is required under paragraph (1).
(c)The provisions of subsection (d) of section 6038A shall apply to—
(1)any failure to furnish (within the time prescribed by regulations) any information described in subsection (b), and
(2)any failure to maintain (or cause another to maintain) records as required by subsection (a),
(d)(1)The rules of paragraph (3) shall apply to any transaction between the reporting corporation and any related party who is a foreign person unless such related party agrees (in such manner and at such time as the Secretary shall prescribe) to authorize the reporting corporation to act as such related party’s limited agent solely for purposes of applying section 7602, 7603, and 7604 with respect to any request by the Secretary to examine records or produce testimony related to any such transaction or with respect to any summons by the Secretary for such records or testimony. The appearance of persons or production of records by reason of the reporting corporation being such an agent shall not subject such persons or records to legal process for any purpose other than determining the correct treatment under this title of any transaction between the reporting corporation and such related party.
(2)If—
(A)for purposes of determining the amount of the reporting corporation’s liability for tax under this title, the Secretary issues a summons to such corporation to produce (either directly or as an agent for a related party who is a foreign person) any records or testimony,
(B)such summons is not quashed in a proceeding begun under paragraph (4) of section 6038A(e) (as made applicable by paragraph (4) of this subsection) and is not determined to be invalid in a proceeding begun under section 7604(b) to enforce such summons, and
(C)the reporting corporation does not substantially comply in a timely manner with such summons and the Secretary has sent by certified or registered mail a notice to such reporting corporation that such reporting corporation has not so substantially complied,
(3)If the rules of this paragraph apply to any transaction or item, the treatment of such transaction (or the amount and treatment of any such item) shall be determined by the Secretary in the Secretary’s sole discretion from the Secretary’s own knowledge or from such information as the Secretary may obtain through testimony or otherwise.
(4)The provisions of section 6038A(e)(4) shall apply with respect to any summons referred to in paragraph (2)(A); except that subparagraph (D) of such section shall be applied by substituting “transaction or item” for “transaction”.
(e)For purposes of this section, the terms “related party”, “foreign person”, and “records” have the respective meanings given to such terms by section 6038A(c).

Legislative History

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Section applicable to (1) any requirement to furnish information under this section if the time for furnishing such information is after Nov. 5, 1990, (2) any requirement under subsec. (a) of this section to maintain records which were in existence on or after Mar. 20, 1990, (3) any requirement to authorize a corporation to act as a limited agent under subsec. (d)(1) of this section if the time for authorizing such action is after Nov. 5, 1990, and (4) any summons issued after Nov. 5, 1990, without regard to when the taxable year (to which the information, records, authorization, or summons relates) began, see section 11315(c) of Pub. L. 101–508, set out as an

Effective Date

of 1990 Amendment note under section 6038A of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 6038C

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73