Form 8621 Preparation

The Form 5471 is officially called the Information Return of U.S. Persons with Respect to Certain Foreign Corporations.

• In recent years, the IRS has increased its scrutiny of US taxpayers living abroad and those with foreign investments. Additional focus has been placed on US persons who are not in compliance with their US tax return filing obligations.

• To compound the intensity surrounding the increase in attention from the IRS, the primary informational return used to report a US person’s interest in a foreign entity (Form 5471) has quadrupled in length since 2016. The introduction of the Tax Cuts and Jobs Act of 2017 brought with it new quantitative hoops through which all controlled foreign corporations must jump, including the Section 965 transition tax and the Global Intangible Low-Taxed Income inclusion – this is in addition to the existing, already-complicated subpart F regime.  The IRS estimates that it would take an individual shareholder of a controlled foreign corporation approximately 200 hours to learn about the relevant tax laws, prepare the Form 5471, and do all associated recordkeeping.  For many US shareholders, this burden is more than they can handle, but with penalties for non-filing (or not substantially completing) a Form 5471 set at $10,000 per Form per year, mistakes here can be very costly.

• The experts at American Expat Tax Services have decades of experience assisting US citizens and permanent residents with their United States filing obligations. Whether you are an individual or corporate shareholder, with a large organizational structure or a small family-owned business, we can help assess the US tax filing obligations for any foreign entities in which you have an ownership interest and ensure that your tax returns are prepared and filed properly. 

For more Form 5471 FAQ’s click here.