Will I be in trouble with the IRS if I don’t file a Form 5471?

In today’s global society, many U.S. taxpayers will find themselves interacting with or owning interest in foreign assets and foreign companies. It is crucial that these taxpayers comply with their U.S. tax obligations in order to avoid audits, penalties, fines, and even potential criminal consequences. If you are a U.S. taxpayer and you are required to file Form 5471, the Information Return of U.S. Persons With Respect to Certain Foreign Corporations, you may find yourself facing tax problems if you fail to fulfill this obligation. In addition, it is crucial to note that the IRS has no time limitation on its ability to pursue an audit if you do not file the form despite being required to do so.

Taxpayers Required to File Form 5471

Whether or not you may face IRS tax problems with regard to Form 5471 depends upon whether you are required to file. The form is applicable for taxpayers who have a certain level of control in certain foreign corporations. There are many filing requirements relating to the form. If it is required, it must be filed as an attachment to the taxpayer’s federal income tax return.

What categories of taxpayers may need to file Form 5471? The following is an overview:

  1. U.S. citizens who are officers, directors, or shareholders in certain foreign corporations
  2. U.S. resident aliens who are officers, directors, or shareholders in certain foreign corporations
  3. U.S. domestic corporations
  4. U.S. domestic partnerships
  5. U.S. domestic trusts

Since the potential penalties for failing to file the form are often steep, it is critical that you fulfill your tax obligations with regard to your interests in foreign assets. Fortunately, you do not have to be an expert in the U.S. tax code to ensure that you stay out of trouble or to deal with the IRS if a problem should arise. We are here to provide the guidance you require. We encourage you to check out our client testimonials today for more information.