Form 5471 (Information Return of US Persons With Respect to Certain Foreign Corporations)
The disclosure regime for US owners and officers of foreign corporations, sorting filers into categories and carrying penalties that start at $10,000.
Detailed Explanation
Form 5471 is filed by US shareholders of Controlled Foreign Corporations (CFCs) and certain other foreign corporations. Five filing categories trigger different schedules and disclosures, including reporting of GILTI, Subpart F income, transactions with related parties, and foreign income tax paid. Penalties for failure to file start at $10,000 per form, per year. Many late filers qualify for first-time penalty abatement or Streamlined Filing Compliance Procedures relief.
Key Points
- Required of US persons who own or control certain foreign corporations, including CFCs.
- Five filer categories drive which schedules apply; reporting can include GILTI and Subpart F income.
- Failure-to-file penalty starts at $10,000 per form per year, with additional penalties for continued non-filing.
- Filed as an attachment to your income tax return (Form 1040, 1120, etc.), due with that return.
- Late or missed filings may be cured via reasonable cause, first-time abatement, or Streamlined Procedures.
Practical Example
A US citizen who owns 60% of a foreign operating company (making it a Controlled Foreign Corporation) must attach Form 5471 to their Form 1040 each year, reporting the company's income, balance sheet, and any GILTI or Subpart F inclusions. Forgetting to file even when no tax is due exposes them to a $10,000 penalty per year per company.
Related TS CPA Service
US tax returns and foreign asset reporting for Americans abroad, foreign nationals in the US, and anyone holding offshore accounts or entities.
Learn about International TaxationRelated Terms
GILTI (Global Intangible Low-Taxed Income)
A US tax on foreign income earned by Controlled Foreign Corporations in excess of a deemed routine return on tangible assets.
Subpart F Income
Certain types of foreign income earned by Controlled Foreign Corporations that are taxed currently to US shareholders, regardless of distribution.
IRS Streamlined Filing Compliance Procedures
An IRS amnesty program for non-willful US taxpayers who failed to report foreign financial accounts and assets, allowing catch-up filing without standard penalties.
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