Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, is one of the most complex IRS forms. Certain U.S. citizens, residents and companies that own or control a foreign corporation must file it every year. The form reports the foreign company’s ownership, income, balance sheet and dealings with its U.S. owners. It also supports the tax U.S. owners may owe on the company’s earnings.
We prepare Form 5471 for founders, business owners and U.S. companies with foreign subsidiaries. Below is an overview of the rules.
Who must file Form 5471?
Filing depends on your relationship with the foreign corporation. The instructions group filers into five categories. For example:
- Category 2: U.S. citizens or residents who are officers or directors when a U.S. person acquires 10% or more of the stock.
- Category 3: U.S. persons who acquire stock that brings them to 10% or more ownership, among other events.
- Category 4: U.S. persons who control the corporation, generally by owning more than 50%.
- Categories 1 and 5: U.S. shareholders of certain foreign corporations, including controlled foreign corporations (CFCs).
One person can fall into more than one category. In that case, you check every category that applies and complete the schedules each one requires. For the full rules, see the IRS page for Form 5471.
What information does Form 5471 require?
The form starts with details about you and the foreign corporation. Then, depending on your category, it may require:
- the company’s income statement and balance sheet in U.S. dollars,
- transactions between the company and its U.S. owners or related parties,
- ownership and stock details, and
- schedules for earnings, taxes and income that U.S. shareholders must include.
In practice, a complete filing often runs many pages. In fact, the IRS estimates that the form takes dozens of hours, not counting record-keeping.
When is Form 5471 due?
You file Form 5471 with your income tax return, by the same due date, including extensions. For individuals, that is usually April 15. However, U.S. citizens living abroad get an automatic extension to June 15. For a U.S. corporation that owns the foreign company, the form goes with the corporate return.
Penalties for not filing Form 5471
The penalties are steep, even if the foreign company has no profit and you owe no tax.
- Initial penalty: $10,000 for each late or incomplete Form 5471, for each year.
- Continuation penalty: if you don’t file within 90 days after an IRS notice, another $10,000 for each 30-day period, up to $50,000 more.
- Foreign tax credit reduction: the IRS can also reduce your foreign tax credits.
The IRS now assesses many of these penalties automatically. Moreover, a net operating loss doesn’t help, because this is a penalty, not a tax.
The statute of limitations stays open
In addition, if you don’t file a required Form 5471, the statute of limitations on your entire return generally stays open until you do. So the IRS can examine that year long after the usual three years.
Controlled foreign corporations
A foreign corporation is a controlled foreign corporation (CFC) if U.S. shareholders, each owning at least 10%, together own more than 50%. When a company is a CFC, its U.S. shareholders may owe current U.S. tax on some of its income, even if the company pays no dividends. This includes:
- Subpart F income, such as certain passive income like interest, dividends, rents and royalties, and some sales and services income, and
- net CFC tested income, formerly known as GILTI. The 2025 tax law renamed and revised it for tax years beginning after 2025.
Related forms you may need
- Form 8992 for net CFC tested income (formerly GILTI)
- Form 1118 or Form 1116 for foreign tax credits
- Form 5472 for foreign-owned U.S. companies
- FinCEN Form 114 (FBAR) and Form 8938 for foreign accounts and assets
Get help with Form 5471
Form 5471 is one of the hardest forms in the tax code, and mistakes are costly. If you own or control a foreign company, or you’ve missed past filings, we can help. Learn more about our tax compliance services, call (415) 842-2940 or book a free 15-minute call.