Form 5471 is used by American taxpayers who have a stake in a foreign company. Taxpayers required to file Form 5471 include:
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- Taxpayers who are officers or directors of a foreign company.
- Taxpayers who have a stock ownership of more than 10% in a foreign company.
- Taxpayers who have a stake in a foreign company as a result of a control transaction or a profit distribution.
Form 5471 is used to inform the Internal Revenue Service (IRS) about a taxpayer’s stake in a foreign company and to comply with the taxpayer’s tax obligations in relation to that stake. Taxpayers required to file Form 5471 must do so along with their annual tax return.
Penalties: The penalty for not filing Form 5471 is $10,000 USD per form.
Difference with Form 5472
It is important not to confuse Form 5471 with Form 5472, which applies to companies organized in the U.S. and that are generally subsidiaries of foreign companies.
What to do if Form 5471 has not been filed?
The IRS has various voluntary compliance programs to address non-compliance Among the main programs are the Streamlined Offshore Procedures, Delinquent International Information Return Submission Procedures, among others
