US Tax
Foreign Corporation Reporting
U.S. citizens and U.S. residents who are officers, directors, or shareholders in certain foreign corporation are responsible for filing Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations. The form and attached schedules are used to satisfy the reporting requirements of transactions between foreign corporations and U.S. persons. Substantial penalties exist for U.S. citizens and U.S. residents who are liable for filing Form 5471 and who failed to do so.
The categories of U.S. persons potentially liable for filing Form 5471 include:
- U.S. citizen and resident alien individuals,
- U.S. domestic corporations,
- U.S. domestic partnerships, and
- U.S. domestic trusts.
The filing requirements for Form 5471 varies depending on the persons who have a certain level of control in certain foreign corporations. Form 5471 should be filed as an attachment to the taxpayer’s federal income tax, partnership or exempt organization return, and filed by the due date (including extensions) for that return.
Depending on the ownership in foreign entity, Form 5471 and Form 8865 can be applicable and the potential penalty for not filing the form is significant (from $10,000 to $50,000 per form per year).
Please contact us if you have any questions.
