IRS Form 5471 – Information Return of U.S. Persons With Respect to Certain Foreign Corporations

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Jason B. Freeman

Jason B. Freeman

Managing Member

214.984.3410
jason@freemanlaw.com

Mr. Freeman is the founding member of Freeman Law, PLLC. He is a dual-credentialed attorney-CPA, author, law professor, and trial attorney.

Mr. Freeman has been named by Chambers & Partners as among the leading tax and litigation attorneys in the United States and to U.S. News and World Report’s Best Lawyers in America list. He is a former recipient of the American Bar Association’s “On the Rise – Top 40 Young Lawyers” in America award. Mr. Freeman was named the “Leading Tax Controversy Litigation Attorney of the Year” for the State of Texas for 2019 and 2020 by AI.

Mr. Freeman has been recognized multiple times by D Magazine , a D Magazine Partner service, as one of the Best Lawyers in Dallas, and as a Super Lawyer by Super Lawyers, a Thomson Reuters service. He has previously been recognized by Super Lawyers as a Top 100 Up-And-Coming Attorney in Texas.

Mr. Freeman currently serves as the chairman of the Texas Society of CPAs (TXCPA). He is a former chairman of the Dallas Society of CPAs (TXCPA-Dallas). Mr. Freeman also served multiple terms as the President of the North Texas chapter of the American Academy of Attorney-CPAs. He has been previously recognized as the Young CPA of the Year in the State of Texas (an award given to only one CPA in the state of Texas under 40).

What is Form 5471?

Form 5471 is used by U.S. persons involved in foreign corporations to satisfy federal reporting requirements under Internal Revenue Code (IRC) sections 6038 and 6046. The IRS has delineated five categories of persons required to file Form 5471. A person that could be classified in multiple categories with respect to her involvement in a single foreign corporation is not required to file Form 5471 more than once; however, a single person must file Form 5471 for each foreign corporation that she is involved in. A joint Form 5471 may be filed when one or more persons are required to file information regarding the same foreign corporation for the same period. Each category has its own requirements of what extra documents must be filed along with Form 5471. In general, U.S. persons that hold stock in a foreign corporation, or that serve as officers or directors in a foreign corporation in which U.S. persons hold stock, may be required to file Form 5471 with their annual income tax returns. Exceptions to this filing requirement arise in situations of constructive ownership, or an election to be treated as a domestic corporation.

Failure to timely file Form 5471 can result in significant cash penalties ($10,000 for each annual accounting period or reportable transaction, plus an additional penalty of up to $50,000 for continued failure to file even after notice of deficiency from the IRS) and revocation of a portion of foreign tax credits available under IRC sections 901, 902, and 960.

Categories of Filers:

Exceptions from filing:

 

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