The problem of background generation in the experimental insertion IR5 of the LHC during machine operation in the dedicated TOTEM mode with low intensity beams and the specially designed β* = 1540 m optics is discussed. The sources of the machine-induced background in the IR5 forward physics areas are identified and their relative importance is evaluated. The results of the background simulation in the IR5 are presented, based on the most recent estimates of the residual gas density for TOTEM beam conditions. The methods for background analysis and rejection are explained