Form 5471: Who Has To File?
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Form 5471: Who Has To File?
Form 5471: Who Has To File?
Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, must be filed by certain U.S. persons who have an interest in foreign corporations. The IRS has five different categories of filers, each with specific filing requirements, and the penalties for noncompliance can be very severe.
Here’s a breakdown of who must file and when:
🔹 Who Must File Form 5471?
U.S. citizens and residents (the technical term is U.S. "persons"), domestic corporations, partnerships, and trusts that meet any of the following five categories must file Form 5471:
✅ Category 1 Filer
U.S. shareholders of a foreign corporation that is a section 965 specified foreign corporation (SFC) at any time during the year.
Applies mainly to U.S. shareholders of certain deferred foreign income corporations.
✅ Category 2 Filer
A U.S. citizen or resident who is an officer or director of a foreign corporation in which a U.S. person acquires at least 10% ownership (directly or indirectly).
Must file for the year in which the 10% threshold is reached.
✅ Category 3 Filer
A U.S. person who acquires, disposes of, or changes their ownership in a foreign corporation such that they cross the 10% threshold.
Includes acquisitions, dispositions, or changes that result in control or loss of control.
✅ Category 4 Filer
A U.S. person who controls a foreign corporation, meaning ownership of more than 50% of the vote or value of the stock (directly, indirectly, or constructively).
Control for at least 30 consecutive days during the year triggers the filing requirement.
✅ Category 5 Filer
A U.S. shareholder of a controlled foreign corporation (CFC), generally a foreign corporation where U.S. shareholders (each owning ≥10%) collectively own >50%.
Must file if the CFC status is met for at least 30 consecutive days, and the person owns stock on the last day of the CFC’s tax year.
📅 When is Form 5471 Due?
Form 5471 is attached to your income tax return (e.g., Form 1040, 1120), so it is due on the same date (including extensions). In essence, April 15th for individuals and March 15th for business entities.
⚠️ Penalties for Not Filing
The minimum penalty is $10,000 per form.
Additional penalties apply for continued failure after IRS notice, and the IRS can disallow foreign tax credits and extend the statute of limitations.
The IRS can and will throw the kitchen sink for noncompliance.
If you think you, or your business, may think that you may be subject to Form 5471 filing requirements, please reach out to us today for your free consultation.
Call us at 817-995-5008 or shoot us an email at: info@libertytaxdefenders.com.
We're here to help!
Cheers!
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