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Form 5471 is the information return a US officer, director or shareholder of a foreign corporation, one organized outside the United States, attaches to their tax return each year. The IRS sorts filers into five categories, and which schedules you attach depends on your category. Dimov Tax confirms your category, prepares the schedules and attaches the form to your federal return.
A US person is a citizen, resident, domestic partnership, corporation, trust or estate. You are in a category when:
| Category | Who it covers |
|---|---|
| 1 | A US shareholder, 10% or more by vote or value, of a section 965 specified foreign corporation |
| 2 | A US officer or director of a foreign corporation in which a US person acquired stock reaching 10%, or a further 10% |
| 3 | A US person who acquires stock that reaches 10%, disposes of stock to fall below 10%, or becomes a US person while holding 10% |
| 4 | A US person who controlled the corporation, more than 50% by vote or value, for at least 30 days in the year |
| 5 | A US shareholder, 10% or more, of a controlled foreign corporation that was a CFC for at least 30 days, holding the stock on the last day it was a CFC |
Categories 1 and 5 split into a, b and c by how you hold the stock, and the b and c filers attach fewer schedules. Attribution through family members, entities or chains can put you in a category without a share in your own name; our filing requirements guide covers it.
From the IRS chart, by schedule:
| Schedule | What it reports | Who attaches it |
|---|---|---|
| Page 1 | The filer, the corporation and the category boxes | Every filer |
| A | The corporation’s stock | 3, 4 |
| B | The corporation’s shareholders | Part I: 3, 4. Part II: 1a, 1c, 3, 4, 5a, 5c |
| C and F | Income statement and balance sheet | 3, 4 |
| E and E-1 | Foreign taxes paid, accrued or deemed paid, and taxes on accumulated earnings | 1a, 4, 5a. 1b and 5b only when claiming deemed-paid credits. 1c and 5c file E only |
| G and G-1 | Other information, and any cost sharing arrangement | 1c, 3, 4, 5a, 5c |
| H and H-1 | Current-year earnings and profits; H-1 the income figure for the corporate AMT | H: 4, 5a. H-1: 4, 5a, 5b, corporate filers subject to the corporate AMT only |
| I and I-1 | Your share of subpart F income; I-1 the figures behind GILTI | I: 4, 5a, 5b. I-1: 4, 5a, 5b, 5c |
| J | Accumulated earnings and profits | 1a, 4, 5a |
| M | Transactions with related persons | 4 |
| O | Organization or reorganization (Part I); acquisitions and disposals of stock (Part II) | Part I: 2. Part II: 3 |
| P | Previously taxed earnings and profits | 1a, 1b, 4, 5a, 5b |
| Q | Income, deductions, taxes and assets by income group | 4, 5a, 5b |
| R | Distributions from the corporation | 4, 5a |
If you own 100% of a foreign corporation, you are in Categories 4 and 5a and file the whole form plus separate Schedules E, G-1, H, H-1, I-1, J, M, P, Q and R. Three rules from the instructions:
• A required schedule is filed even when every amount on it is zero
• A filer in two categories completes everything that applies, once
• A filer in both Category 4 and 5a ticks Category 4 only
Send the ownership chart, and we tell you which categories you are in and which schedules you file.
We trace direct, indirect and attributed ownership, any acquisition or disposal in the year, and whether the company is a controlled foreign corporation, one more than 50% owned by US shareholders.
We build your schedule list from the Form 5471 instructions for your category before preparing the financial, ownership and related-party disclosures.
We reconcile the source records, convert foreign-currency amounts and attach the form to your federal return. The GILTI calculation on Form 8992 is a separate service.
| Your situation | What the work centers on |
|---|---|
| A new investment or a change in ownership | The transaction date, the percentage and the category it puts you in |
| A corporation you control year after year | The annual financial schedules and earnings tracking |
| Several US filers of the same corporation | One complete form, with the other filers’ reporting coordinated |
The corporation, the ownership chain, the tax year and any change during the year.
Formation documents, ownership records, trial balances, financial statements and related-party transactions, in whatever accounting format you keep them.
The filing category, the schedule list, the exchange rates and the figures your federal return takes from the form.
We complete the schedules, check that the balance sheet, income statement, earnings and transaction schedules agree, and attach the form to your return.
You attach Form 5471 to your income tax, partnership or exempt organization return, so it is due with that return, including extensions, and has no extension of its own. You file one form per foreign corporation. The penalty for a missing or incomplete form is $10,000 per corporation per year, a further $10,000 for each 30 days once 90 days have passed from an IRS notice, up to $50,000, and a 10% cut to the foreign taxes you can credit. Our late international return service handles missed years.
Trace the ownership chain and the year’s changes
Confirm the filer category
List the schedules for the category
Tie out and attach to the federal return
My clients are always looking to legally save taxes, and the kind of clients I have want to follow the rules. They want to follow the law and they are looking for an advisor that's going to help them put together a strategy that long-term is going to ensure that they do not overpay.
We set the quote from these factors:
One Category 5a shareholder of one corporation with US GAAP statements in hand is at the light end. These are the factors, not a quote.
Dimov Tax experts were considerate, professional and helped guide me through a potentially complex process as a foreign business owner. Thank you!
Send the ownership chart, formation records, prior filings and current financial statements, and we confirm the scope and send a written quote. Our pricing and consultation options are set out in advance.
These are general rules and are not advice on your situation. Your category depends on ownership counted through attribution, so speak to a CPA before you rely on any of it.
