What is the form 5471?

Form 5471, the Information Return of U.S. Persons with Respect to Certain Foreign Corporations, provides the IRS information regarding U.S. taxpayers with an interest in foreign corporations.

Such interest includes being an officer, director, or shareholder in certain foreign corporations. Filling out the form by itself most likely will not affect how much you have to pay in taxes.

Who files Form 5471?

Any US citizen, corporation, partnership, trust, or estate who has at least 10% ownership in a foreign corporation has to file Form 5471. This also applies to individuals who own 10% or more of voting power or shares in a CFC.

Controlled Foreign Corporations

A CFC is any foreign corporation where US shareholders own more than 50% of the total stock or voting stock. Any US taxpayer who owns 10% or more of voting shares in a CFC must file form 5471. Required disclosures include classes and attributes of issued stock, the company income statement, balance sheet, and current earnings and profits.

Penalties for not filing form 5471

If you meet the requirements and don’t file, you may receive a $10,000 penalty annually. If the IRS has mailed a notice, and you have not filed within 90 days, an additional $10,000 penalty is charged for every 30 days after the 90-day period has expired. The maximum penalty is $50,000.

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Sources

HR Block
IRS
Expat CPA
Irsstreamlinedprocedures
Patel Law Offices
The Tax Advisor