One tax requirement that’s complicated and hard to understand is for US citizens and residents who have ownership in a foriegn corporation. These people are required to file IRS Form 5471, Information Return of US Persons with Respect to Certain Foreign Corporations.
Form 5471 is an information return, rather than a tax return. It’s intended to provide the IRS with a record of which US citizens and residents have ownership of foreign corporations. It’s similar to Form 1120, the US corporate income tax return, and requires much of the same information. It differs from Form 5472, which is intended for foreign corporations that do business in the US, or for US corporations that are at least 25 percent foreign owned.
In general, any US citizen, corporation, partnership, trust, or estate that owns at least 10 percent of the shares of a foreign corporation needs to file Form 5471. If you own more than 50 percent of the shares of the foreign corporation, you may be required to file additional schedules and statements. If you’re not sure if you are required to file, the IRS has published detailed qualifications. The qualifications for Form 5471 are extremely convoluted, so if you think you qualify, it’s a good idea to consult your accountant.
If you are required to file Form 5471 and you don’t file, you can face a $10,000 penalty for each annual accounting period of the foreign corporation. If the IRS notifies you that you’re required to file Form 5471 and you don’t file one within 90 days, you could incur a penalty of $60,000.
Form 5471 is very complicated and includes 12 schedules which you may or may not need to complete. Your accountant at Kruze Consulting can help guide you through this process. For more information, contact us.
Form 5471 (Rev. December 2021) Department of the Treasury Internal Revenue Service
For calendar year 2020 or tax year beginning _ _ _ _ _ _ _ _, 2020, ending _ _ _ _ _ _ _ _ , 20_ _
▶ Go to www.irs.gov/Form5471 for instructions and the latest information.
OMB No. 1545-0123
Attachment Sequence No. 121
(1) Name | (2) Address | (3) Identifying number | (4) Check applicable box(es) | ||
Shareholder | Officer | Director | |||
▢ | ▢ | ▢ | |||
▢ | ▢ | ▢ | |||
▢ | ▢ | ▢ |
1a
Name and address of foreign corporation
|
b(1) Employer identification number, if any
|
b(2) Reference ID number (see instructions)
|
|
c Country under whose laws incorporated
|
a Name, address, and identifying number of branch office or agent (if any) in the United States
|
b If a U.S. income tax return was filed, enter: | |
(i) Taxable income or (loss) | (ii) U.S. income tax paid (after all credits) | |
c
Name and address of foreign corporation’s statutory or resident agent in country
of incorporation
|
b
Name and address (including corporate department, if applicable) of person (or
persons) with custody of the books and records of the foreign corporation, and
the location of such books and records, if different
|
(a) Description of each class of stock | (b) Number of shares issued and outstanding | |
(i) Beginning of annual accounting period | (ii) End of annual accounting period | |
Warning: This information is for informational purposes only and should not be used for official tax matters. Use the official Form 5471 and instructions, generally found at: https://www.irs.gov/forms-instructions. Rely on this information at your own risk. Visit https://www.irs.gov/forms-instructions for official IRS information. Consult with a tax professional.
(a) Name, address, and identifying number of shareholder | (b) Description of each class of stock held by shareholder. Note: This description should match the corresponding description entered in Schedule A, column (a). | (c) Number of shares held at beginning of annual accounting period | (d) Number of shares held at end of annual accounting period | (e) Pro rata share of subpart F income (enter as a percentage) |
(a) Name, address, and identifying number of shareholder. Also, include country of incorporation or formation, if applicable. | (b) Description of each class of stock held by shareholder. Note: This description should match the corresponding description entered in Schedule A, column (a). | (c) Number of shares held at beginning of annual accounting period | (d) Number of shares held at end of annual accounting period |
Warning: This information is for informational purposes only and should not be used for official tax matters. Use the official Form 5471 and instructions, generally found at: https://www.irs.gov/forms-instructions. Rely on this information at your own risk. Visit https://www.irs.gov/forms-instructions for official IRS information. Consult with a tax professional.
Warning: This information is for informational purposes only and should not be used for official tax matters. Use the official Form 5471 and instructions, generally found at: https://www.irs.gov/forms-instructions. Rely on this information at your own risk. Visit https://www.irs.gov/forms-instructions for official IRS information. Consult with a tax professional.
Warning: This information is for informational purposes only and should not be used for official tax matters. Use the official Form 5471 and instructions, generally found at: https://www.irs.gov/forms-instructions. Rely on this information at your own risk. Visit https://www.irs.gov/forms-instructions for official IRS information. Consult with a tax professional.
Warning: This information is for informational purposes only and should not be used for official tax matters. Use the official Form 5471 and instructions, generally found at: https://www.irs.gov/forms-instructions. Rely on this information at your own risk. Visit https://www.irs.gov/forms-instructions for official IRS information. Consult with a tax professional.
Warning: This information is for informational purposes only and should not be used for official tax matters. Use the official Form 5471 and instructions, generally found at: https://www.irs.gov/forms-instructions. Rely on this information at your own risk. Visit https://www.irs.gov/forms-instructions for official IRS information. Consult with a tax professional.
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