Form 5471 is required to be attached to a U.S. person's individual tax return if the person meets one of the specific category of filers. Generally persons who own 10% or more of a foreign corporation or significantly change their ownership interest during the year are required to file Form 5471.  For categories of filers, please see the IRS website.

 

A U.S. person is:

• A citizen or resident of the United States

• A domestic partnership

• A domestic corporation

• An estate or trust that is not a foreign estate or trust defined in section 7701(a)(31)

• A nonresident alien for whom an election is in effect under section 6013(h), relating to nonresident aliens who become residents of the United States during the tax year and are married at the close of the tax year to a citizen or resident of the United States

 

The Form 5471 requires the listing of identities of US shareholders and details about the foreign corporation, including income statement and balance sheet, transactions between shareholders and the foreign corporation, capital contributions and the other information.

 

A $10,000 penalty may be imposed for each annual accounting period for failure to file Form 5471 within the time prescribed. Brenner Global Associates, LLC can assist in preparing Form 5471.