• 8 minutes

Withholding of Taxes on Payments to Foreign Persons and Entities - Penalties


Tax withholding penalties aren’t extensive unlike many other areas of international tax reporting.

Form 1042 extensions are allowed for filing the form; however, the extensions do not extend the deadline for payment. Deposits must be made using the Electronic Federal Tax Payment System and there is the potential of a 10% penalty for not paying electronically. Taxpayer must show that the failure to file or pay was due to reasonable cause and not willful neglect to avoid penalties. This video reviews Form 1042 penalty framework and discusses Form 8804 and 8805.

Runtime: 7 minutes



Danish N. Meherally, J.D., LL.M.

Danish N. Meherally, J.D., LL.M.

Crowe LLP

  • Manager in the Atlanta office of Crowe LLP
  • Practice emphasizes all aspects of international tax
  • LL.M. degree in tax , University of Florida School of Law; J.D. degree, Ave Maria School of Law
  • Can be contacted at [email protected]
Mike Burgess, J.D.

Mike Burgess, J.D.

Crowe LLP

  • Serves as a senior manager with Crowe LLP’s international tax group
  • Has more than 20 years of experience in international tax including both compliance and planning for public and private companies
  • Has a broad range of industry experience, including manufacturing and distribution, retail and technology, among others
  • Throughout his career he has acquired extensive experience in international compliance issues including completion and review of all U.S. international tax forms
  • Since 2010 he has focused on providing international tax services to publicly and privately held multinational companies in the middle market on a wide range of international tax issues, including, in addition to the above, structure planning, mergers and acquisition, cross-border transactions and Subpart F analysis, GILTI, FDII, BEAT, and foreign tax credits
  • Prior to joining Crowe, he spent more than 10 years in Big 4 public accounting firms where he gained an extensive background in implementing global holding company structures designed to improve a company’s tax positions and efficiently manage cash through intercompany financing and cash planning
  • Has specific experience in development and implementation of international structuring and restructuring projects
  • J.D. degree, Lewis & Clark College

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