Form 5471 — US Shareholders of Foreign Corporations
If you are a US citizen or resident who owns 10% or more of a foreign corporation, you are likely required to file Form 5471 — one of the most complex information returns in the US tax code. Failure to file carries an automatic $10,000 penalty per year. Beyond the filing obligation, US owners of Controlled Foreign Corporations (CFCs) face ongoing Subpart F income inclusions and, since 2017, Global Intangible Low-Taxed Income (GILTI). We provide specialist Form 5471 preparation and CFC analysis.
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What this filing may involve
Every situation is different. The forms below commonly apply — your specific filing may vary.
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- ✓Everything in Standard
- ✓Schedule C & SE for self-employment
- ✓Multiple income sources and currencies
- ✓Everything in Expat
- ✓Schedules D & E for investments and rentals
- ✓Foreign asset reporting (Form 8938)
- ✓FBAR filing (FinCEN 114) included
- ✓LLC partnership return (Form 1065)
- ✓Up to 2 owners, simple P&L and balance sheet
- ✓K-1s prepared for owners
Frequently asked questions about Form 5471 — US Shareholders of Foreign Corporations
I own 50% of a foreign company with my spouse — do we both need to file Form 5471?
It depends on attribution rules. If you are both US persons and together own a controlling interest, both of you may need to file, or one may file on behalf of both as permitted by the instructions. Our CPAs determine the correct filing approach for your ownership structure.
What is Subpart F income and how does it affect me?
Subpart F income is passive or easily-shifted income earned by a CFC (a foreign corporation that is more than 50% owned by US shareholders). Even if the corporation retains the income and pays no dividends, US shareholders must include their pro-rata share of Subpart F income on their US tax return annually. Services income, dividends, interest, and royalties between related parties often fall into Subpart F.
What is the penalty for not filing Form 5471?
The IRS imposes an automatic $10,000 penalty per year per Form 5471 for failure to file. Additional penalties of $10,000 per month can apply if the failure continues after IRS notification. The statute of limitations also remains open for your entire tax return — not just the Form 5471 — until it is filed.
I have a small foreign company with minimal income — do I still need to file?
Yes. Form 5471 is an information return, not a tax payment form. The obligation is based on your ownership percentage, not on whether the company earned income or owes tax. Even a dormant company generally still requires annual Form 5471 filing if you meet the ownership thresholds.
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