“Came back from Germany with European mutual funds that turned out to be PFICs. Clark ran the QEF elections and saved me about $9,000.”
Briefly tell us your situation below.
The basics, explained plainly
If you own, control, or have signature authority over a foreign business entity, you almost certainly owe an annual U.S. information return, even if the entity has zero income. Here are the answers to the questions almost every client asks us first.
U.S. persons who are officers, directors, or 10%+ shareholders of a foreign corporation. Different filing categories (Categories 1 through 5) apply depending on ownership level and U.S./foreign control. Category 4 (controlling U.S. shareholder, >50% ownership) and Category 5 (any 10%+ U.S. shareholder of a Controlled Foreign Corporation) carry the heaviest reporting load.
U.S. corporations (including single-member LLCs treated as disregarded entities) that are 25% or more foreign-owned, plus U.S. corporations that have any reportable transaction with a foreign related party. Even a foreign-owned U.S. LLC with zero revenue and no employees usually owes Form 5472 plus a pro-forma 1120 every year.
$10,000 per Form 5471 or 5472, per year, automatic, with $10,000 every 30 days additional after IRS notice (capped at $50,000 for Form 5471 continuation). Form 8865 (foreign partnerships) and Form 8858 (foreign disregarded entities) carry similar $10,000 penalties. Form 3520 (foreign trusts and inheritances) penalty is the greater of $10,000 or 35% of the unreported amount. Form 8621 (PFICs) does not carry an automatic penalty but unfiled PFIC interests stay open for IRS audit indefinitely.
GILTI (Global Intangible Low-Taxed Income) is an annual flow-through tax on income earned by a Controlled Foreign Corporation, designed to prevent profit-shifting to low-tax jurisdictions. Subpart F taxes specific categories of CFC income (passive, related-party services, base-shifting income) currently rather than when distributed. Most U.S. owners of foreign C-corps owe one or both, even if they took no distributions. We run the calculations annually and elect Section 962 or high-tax exclusion treatment when it lowers the tax.
The Delinquent International Information Return Submission Procedures let you file late returns with a reasonable-cause statement, often with no penalty if the IRS accepts the explanation. We draft the reasonable-cause letter, file the back returns under the procedure, and handle the IRS correspondence if questions come back. Acting before the IRS reaches out is materially better than responding after a notice.
Free, no-obligation, same-day reply.
Sound Familiar?
Do not wait until you receive a notice. Get compliant now and protect your assets.
You hold 10% or more of a foreign company and need annual Form 5471 with confusing categories and schedules.
Our Fix
We determine your filing category, complete the correct schedules, and calculate GILTI and Subpart F inclusions.
Non-resident owner of a U.S. disregarded LLC. Form 5472 required even with no U.S. operations.
Our Fix
Form 5472 plus pro forma 1120 filed annually. We handle these for non-resident owners routinely.
Inherited or received over $100,000 from a foreign person or estate. Form 3520 due with penalties for late filing.
Our Fix
Form 3520 prepared, deadline extension requested if needed, late-filing abatement if missed.
Beneficiary or grantor of a foreign trust (including some foreign pension plans) with Forms 3520 and 3520-A required.
Our Fix
We analyze whether the entity is a trust for U.S. purposes and file the full 3520 and 3520-A package.
Foreign mutual funds, ETFs, or certain foreign stocks. Each is a PFIC requiring Form 8621.
Our Fix
Form 8621 with QEF election, Mark-to-Market election, or default Section 1291 treatment. Whichever saves the most tax.
IRS sent a $10,000 penalty notice for a late or missed foreign entity form.
Our Fix
Reasonable cause letter, First-Time Abate, or penalty appeal. 99% resolution rate on these cases.
What We Handle
Every filing, every form, handled by specialist CPAs.
Full Form 5471 with all required schedules (A, B, C, E, F, G, H, I, J, M, O, P, Q, R). Category 1-5 filer determination, Subpart F income, GILTI calculation, and Section 962 election analysis.
Annual Form 5472 with pro forma Form 1120 for foreign-owned single-member LLCs. Required even with no U.S. income or operations. $25,000 penalty per year for non-filing.
Foreign trust reporting (Form 3520-A by the trust, Form 3520 by beneficiaries and grantors). Also large foreign gifts ($100,000 and up) and bequests. Penalty abatement for late filings.
Passive Foreign Investment Company analysis and annual filing. QEF election, Mark-to-Market election, or Section 1291 default treatment. One form per PFIC per year.
Global Intangible Low-Taxed Income (GILTI) inclusion for CFC shareholders, Subpart F income determination, and Section 962 election analysis. High-tax exception (HTE) optimization.
Reasonable cause letters, First-Time Abate applications, and appeals for Form 5471, 5472, 3520, 8621, and other foreign information return penalties. 99% resolution rate.
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Speak to an International Tax ExpertClient Stories
Common situations and how we resolved them
“I had foreign accounts in India from before I moved to the US, and nobody had ever explained FBAR to me. By the time I found out, I was three years behind. Clark walked me through the Streamlined Filing process, we submitted everything, and I ended up with zero penalties. Worth every dollar just for the peace of mind.”
Priya S.
Streamlined Filing
“Living in Singapore for work, my previous CPA kept botching the Foreign Earned Income Exclusion and I kept getting surprise tax bills. Clark actually understands Form 2555 and the foreign housing exclusion. First year working with him, I saved about $14,000 on my federal return.”
David H.
Expat Tax Returns
“I set up a UK Ltd for my consulting work and had no idea I was supposed to file Form 5471 every year. TS CPA caught it in our first meeting and got me compliant before the IRS noticed. They handle the annual GILTI and Subpart F calculations now, and the fee is flat, not hourly. I know what I'm paying each year.”
Marcus L.
Foreign Corporation
“My mother passed away in Korea and I inherited around $400,000. I had no idea Form 3520 existed. Two other CPAs told me they couldn't help. Clark had the filing drafted within a week and walked me through every line in plain English. No IRS letters, no stress.”
Jennifer K.
Foreign Inheritance
“I have a rental property in Guadalajara and a consulting job in California. Between FBAR, FATCA, Mexican tax credits, and the rental income, my return was a mess every year. Clark untangled all of it, got me the foreign tax credits I'd been missing, and I got a refund for the first time in four years.”
Ana R.
Dual Citizen Filings
“I came back to California after six years in Germany with a stack of European mutual funds that apparently are all PFICs. Two prior CPAs quietly ignored them. Clark identified them, ran the QEF elections, and put together a clean filing. He also caught a treaty position I'd been missing, and that saved me about $9,000.”
Sophia T.
PFIC Filings
Start with a free, no-obligation conversation. Most clients hear back within 3 hours.