Form 5471

Information Return of U.S. Persons With Respect To Certain Foreign Corporations, filed under §§6038 and 6046. Which of the five filing categories applies drives which schedules you complete, and the categories reach further than most expats expect: a US citizen who incorporates a small local company abroad is typically a Category 4 and 5 filer from day one. A controlled foreign corporation (CFC) is one where US shareholders — each holding 10% or more — together own more than 50% by vote or value; that status pulls in Subpart F income and the §951A GILTI inclusion, taxing you on the company's earnings before any distribution reaches you. The §6038(b) penalty is $10,000 per form per year, with continuation penalties, and it applies to a late or incomplete form even when no tax is owed. An unfiled Form 5471 also keeps the statute of limitations open on the entire return.