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3. Information Reporting Form 5471, Pg. 1
for CFCs
In order to provide the IRS with the information necessary to ensure
compliance with Subpart F, each year a U.S. shareholder who owns
more than 50% of the stock, by vote or value, of a foreign
corporation must file Form 5471.
Other persons who must file for 5471 include:
A. U.S. persons who acquire a 10% ownership interest, or dispose
of stock holdings to reduce their ownership in the foreign
corporation to less than 10%, and
B. U.S. citizens and residents who are officers or directors of a
foreign corporation in which a U.S. person acquires a 10% a
10% ownership interest or an additional 10% interest.
A Forms 5471 ordinarily is filed by attaching it to the U.S. person’s
regular federal income tax return.
Any U.S. person who fails to furnish the required information may
be subject to an annual penalty of $10,000, as well as a reduction to
the person’s foreign tax credit.
