Form 5471 is the IRS information return that certain U.S. persons file when they're officers, directors or shareholders of a foreign corporation. It's attached to your own income tax return and due with it, including extensions. The penalty for not filing is $10,000 per foreign corporation per year, as of October 2026, even when no tax is owed.
If you're a U.S. founder with a company abroad, or an American who owns 10% or more of a foreign business, this form probably applies to you. It's long, but whether you file comes down to which category you fall into. Everything below is from the Rev. December 2025 instructions.
The five categories of filer
| Category | Who it covers (simplified) |
|---|---|
| 1 | U.S. shareholders of a foreign corporation that was a section 965 specified foreign corporation |
| 2 | A U.S. citizen or resident who is an officer or director of a foreign corporation where a U.S. person acquired stock meeting the 10% test, or an additional 10% or more |
| 3 | A U.S. person who acquires stock bringing them to the 10% test, who becomes a U.S. person while over it, or who sells down below it |
| 4 | A U.S. person who had control: more than 50% of the voting power or value of the foreign corporation |
| 5 | A U.S. shareholder of a controlled foreign corporation (CFC) |
The 10% stock ownership test means owning 10% or more of the total value of the foreign corporation's stock, or 10% or more of the combined voting power of its voting stock. Many people fall into more than one category; the instructions say not to duplicate information but to complete everything that applies. A sole owner of a CFC (Categories 4 and 5a) completes all six pages plus the separate Schedules E, G-1, H, H-1, I-1, J, M, P, Q and R.
Who counts as a U.S. person
The definition shifts slightly by category, which is one reason the form feels slippery. For Category 3 it's a U.S. citizen or resident, a domestic partnership, a domestic corporation, or an estate or trust that isn't foreign. Category 4 adds nonresident aliens who've elected to be treated as residents, including people who became residents during the year and are married to a U.S. citizen or resident at year end.
Timing can surprise people too. You've acquired stock once you have an unqualified right to receive it, even if the shares haven't been issued yet. So a founder who's been promised 10% of an overseas start-up can be a Category 3 filer before any certificate exists.
How to file it
- Work out every category you fall into for each foreign corporation.
- Use the instructions' chart to see which schedules each category needs.
- Complete a separate Form 5471 and its schedules for each foreign corporation.
- If a required schedule has all zero amounts, file it anyway with one or more zeros.
- Attach the form to your income tax return (or partnership or exempt organization return), filed by the due date including extensions. If the corporation keeps its books in another currency, the instructions explain how to translate amounts into U.S. dollars.
The penalties
| Failure | Penalty (as of October 2026) |
|---|---|
| Not filing Form 5471 and Schedule M on time | $10,000 for each annual accounting period of each foreign corporation |
| Still not filed 90 days after the IRS mails a notice | An extra $10,000 for each 30-day period (or part), up to $50,000 per failure |
| Missing or incomplete information | A 10% cut in the foreign taxes you can claim as a credit, plus 5% more for each 3-month period after the 90 days |
The foreign tax credit cut is the one people don't expect. Losing part of your credit can raise the U.S. tax on the same income.
Exceptions worth checking
Each category has its own exceptions, and the conditions are specific. Two examples from the instructions show how narrow they are:
- Constructive owners: a Category 1 filer doesn't file if they own no direct interest, they're only caught because of constructive ownership through another U.S. person, and that person files a Form 5471 reporting everything the Category 1 filer would have to report. They're also excused if they own no direct or indirect interest and are only caught through constructive ownership from a nonresident alien.
- Officers and directors: a Category 2 filer is excused if, right after the acquisition, three or fewer U.S. persons own 95% or more in value of the stock and the person who acquired it files as a Category 3 filer, or if the shareholder they'd be reporting for is only a constructive owner and the person whose stock is attributed files all the information.
Further exceptions apply to every category, listed under Additional Filing Exceptions. Read the one for your situation before deciding you're off the hook, and keep a note of which exception you relied on.
Related forms
If the ownership runs the other way, with a foreign person owning a stake in a U.S. corporation, that's usually Form 5472, a different return. And holding the company's bank account abroad with signature authority can trigger an FBAR as well, separately from Form 5471.
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The verdict
If you own, run or sit on the board of a foreign company and you're a U.S. person, assume Form 5471 applies until you've ruled it out category by category. The $10,000 penalty applies per company per year whether or not you owe tax, so it's worth paying a specialist for the first year and keeping the workpapers for the next.
International returns are detailed work, and our round-up of AI tools built for tax work compares tools that take some of the weight.
Frequently asked questions
Who has to file Form 5471?
Certain U.S. persons who are officers, directors or shareholders in foreign corporations, in five categories based on ownership, control and CFC status.
When is Form 5471 due?
With your income tax return, by its due date including extensions. It's attached to the return, not filed separately.
What is the penalty for not filing Form 5471?
$10,000 per foreign corporation per year, plus up to $50,000 more if it isn't filed after an IRS notice, as of October 2026.
What does control mean for Form 5471?
For Category 4, owning more than 50% of the total combined voting power, or more than 50% of the total value, of the foreign corporation's stock at any time in your tax year.
Do I file Form 5471 if a schedule is all zeros?
Yes. The instructions say a required schedule with all zero amounts should still be filed with one or more zeros.
