Substantial penalties apply for non-compliance.
The information on foreign affiliates is so extensive that compliance may prove impractical for many taxpayers. The penalties for failure to file are significant. Additional penalties apply for false statements or omissions. The new reporting requirements apply to taxation years beginning after 1995, but the first required filing date is December 31, 1997. Notwithstanding this delay, many taxpayers will be hard pressed to assemble the extensive information required.