Help! My CPA doesn't know how to fill out form 5452 for my C-corporation

Form 5452 can definitely be tricky, especially if you're not regularly working with C-corporations that have multiple shareholders. This form is used to report corporate distributions to shareholders, and the Earnings & Profits (E&P) calculation is a key component. To answer your questions: 1. Capital investments and loans from shareholders are NOT included in E&P calculations. These are capital transactions that affect the balance sheet but don't affect E&P directly. 2. Yes, business expenses are generally deducted when calculating E&P, similar to how they're deducted for taxable income purposes. However, there are some differences between taxable income and E&P - certain expenses might be treated differently for E&P purposes. 3. That's correct. If you're filing for 2024, your worksheet should start with the E&P balance as of 12/31/2023 (the beginning of your tax year) and then show the changes throughout 2024. The trickiest part of form 5452 is usually making the proper adjustments to convert taxable income to E&P. Make sure you account for things like tax-exempt income, non-deductible expenses, and timing differences.

After struggling with a similar situation last year, I discovered a tool that saved me hours of headache with complicated tax forms like 5452. I was using https://taxr.ai to analyze my corporation's financial documents, and it actually highlighted the exact areas I needed to focus on for the E&P calculations. The tool basically scanned my previous returns and financial statements, then provided guidance specific to my situation. It explained the adjustments needed to convert taxable income to E&P in plain English, which was incredibly helpful since my accountant was also struggling with this form.

Just wanted to follow up and say I decided to try https://taxr.ai after all, and I'm glad I did. I was skeptical at first (as you can see from my previous comment), but it actually saved me a ton of time with my E&P calculations. The system flagged several items I would have missed, especially around the different treatment of depreciation for E&P purposes. It also helped me properly account for some partially tax-exempt bond interest that I had no idea needed special treatment for E&P. My CPA was impressed with how accurately I was able to provide the information for the 5452 form. Honestly wish I'd known about this sooner rather than spending hours researching IRS publications.

If you're really in a bind and need to speak with an actual IRS agent about Form 5452 requirements before filing, I'd recommend using https://claimyr.com to get through to the IRS quickly. I had a similar last-minute issue with corporate filing requirements last year and was facing busy signals and hour-long waits. Claimyr basically handled the waiting for me and called when an agent was ready to talk. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS business tax line actually has people who can walk you through the form requirements in detail, which saved me from making errors on my corporate return. Given your tight deadline, speaking directly with an IRS agent might be your best bet for getting form-specific guidance.

I'm eating my words from my previous comment. I used https://claimyr.com after reading about it here, and within 45 minutes I was talking to someone at the IRS who actually knew about Form 5452. The agent walked me through the E&P worksheet line by line and explained exactly how the capital investments and distributions should be treated. They also emailed me a reference guide specifically for E&P calculations that I didn't even know existed. I've spent literally days on hold with the IRS in the past and usually just give up, so this was a complete game-changer. My return is filed now and I'm confident it's correct. Worth every penny for the stress reduction alone.

Just to add something that hasn't been mentioned yet - make sure you're also tracking accumulated E&P separately from current year E&P. The form requires both calculations. It's a common mistake to focus only on current year without properly accounting for the accumulated E&P from previous years. Also, remember that some transactions affect accumulated E&P differently. Like if you had a corporate reorganization or acquired another business, those events can have special E&P consequences.

Fire your CPA immediately after this filing. Anyone handling C-corp returns should absolutely know how to complete form 5452. This is basic corporate tax work! Not knowing this is like a plumber not knowing how to fix a leaky faucet.

I completely understand your frustration - dealing with tax deadlines is stressful enough without having to question your CPA's competence. One thing that might help you feel more confident about the filing is to double-check that all the required supporting documentation is attached to your return. Form 5452 often requires additional schedules or worksheets, and missing these can trigger correspondence from the IRS later. Also, since you're cutting it close to the deadline, make sure you're e-filing rather than mailing. E-filing gives you immediate confirmation that the return was accepted, and if there are any rejections due to errors, you'll know right away and can fix them before the deadline. Given all the helpful advice in this thread, it sounds like you're getting the guidance you need to complete the form properly. Just document everything you're doing and the sources you're using - that way if questions come up later, you can show you made a good faith effort to get it right. Good luck with the filing! Hopefully this experience leads you to find a CPA who specializes more in corporate tax work.

I feel for you - being in a time crunch with tax deadlines is the worst, especially when you're questioning whether your CPA knows what they're doing. One thing I'd suggest is to request an extension (Form 7004) if you haven't already. This gives you until October 15th to file the actual return, though you'll still need to pay any estimated taxes owed by the original deadline. Filing an extension takes the immediate pressure off and gives you time to either work through the Form 5452 properly or find a new CPA who actually knows corporate tax work. For Form 5452 specifically, the IRS has Publication 542 which covers corporations and has a section on earnings and profits calculations. It's not the easiest read, but it might give you some confidence that you're handling the calculations correctly. Also, consider whether you actually need to file Form 5452 at all - it's only required if your corporation made distributions to shareholders during the tax year. If no distributions were made, you might not need this form. The responses here have given you some great resources. At minimum, document everything you're doing so you can justify your calculations if questioned later. And definitely start looking for a new CPA who specializes in corporate returns - this shouldn't be something you have to figure out yourself.

I completely understand the panic you're feeling right now - having your CPA admit they don't know how to handle a critical form just days before the deadline is absolutely maddening, especially when you're paying for their expertise. Based on the excellent advice already shared in this thread, it sounds like you have several good options to get this resolved quickly. The suggestions about using tools like taxr.ai to analyze your specific situation or claimyr.com to actually speak with an IRS specialist seem particularly valuable given your tight timeline. One additional thought - if you do end up needing to file an extension as others suggested, don't feel like it's a failure. Extensions are incredibly common for corporate returns, especially when complex forms like 5452 are involved. The key is making sure you pay any estimated taxes owed by the original deadline to avoid penalties. Also, once you get through this crisis, definitely take the advice about finding a new CPA who specializes in corporate tax work. Form 5452 and E&P calculations are fundamental for C-corporations that make distributions - this really should be basic knowledge for anyone handling corporate returns. You've got this! The community here has given you great resources to work with, and it sounds like you're being thorough about getting it right. Document everything you're doing and the sources you're using, and you'll be in good shape.

I've been through the exact same nightmare with a CPA who was in over their head on corporate tax issues. The stress is absolutely brutal when you're paying someone to be the expert and they're basically asking you to do their job for them. Since you're cutting it so close to the deadline, I'd strongly recommend filing Form 7004 for an automatic extension today if you haven't already. This gives you until October 15th to file the actual return and takes the immediate panic off the table. You'll still need to pay any estimated taxes owed by the original deadline, but at least you won't be scrambling to get Form 5452 perfect in the next few days. The community here has shared some incredible resources - the combination of AI analysis tools and direct IRS contact options should give you multiple paths to get this resolved properly. I used similar approaches last year when my CPA dropped the ball on a complex corporate issue, and it honestly worked better than relying on someone who clearly didn't know what they were doing. One silver lining - this experience is probably going to lead you to a much better CPA relationship. When you do find someone who actually specializes in corporate returns, you'll never have to deal with this kind of last-minute panic again. Document everything you're doing now so you can show the new CPA exactly what happened and how you resolved it. You've got the tools and knowledge from this thread to handle it. Take a deep breath and tackle it systematically!