What Is a Form 5471?

  • Tax

Definition

Form 5471 is an information return required by the Internal Revenue Service for certain U.S. persons who are officers, directors, or shareholders in foreign corporations.

Purpose

The form gathers details about the foreign corporation’s financial condition, ownership structure, earnings, and transactions with related parties. It helps the IRS enforce tax rules on Subpart F income and Global Intangible Low-Taxed Income.

Who Must File

A U.S. person must file if they meet any of these tests: • U.S. shareholder of a controlled foreign corporation (CFC) owning 10 percent or more of voting power or value • U.S. person acquiring or disposing of enough stock to reach the 10 percent threshold • Officer or director of a CFC when a U.S. shareholder owns at least 10 percent Multiple categories can apply, and thresholds vary by the test.

Penalties

Failing to file or filing late can trigger a $10,000 penalty per form, with additional penalties if not corrected timely. Continuous failure may lead to more severe fines.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.