I'm up to date with my tax returns, but I did not file Form 5471 for my foreign corporation

There is a special program for this: the  Delinquent Informational Return Program. This program can also be used if you’ve failed to report other informational returns (i.e. - Foreign Trust 3520-A)

  • Participation in this program entails three amended returns, one for each of the past three years (assuming you have not filed the informational return for three years), and three Form 5471 (assuming that that is the missing form), one for each year.  Finally, a statement of reasonable cause must be attached to explain your failure to file.
  • You could also potentially be required to file FATCA (Form 8938) if the balance on the company accounts (previously unreported) puts you over the filing threshold.

If you are at least a 10% shareholder in a foreign corporation, you are required to file Form 5471. Failure to do so can carry very stiff penalties.

Eligibility Requirements

  • You have not filed one, or more, required international informational returns,
  • You have reasonable cause for not having filed the informational returns in a timely manner,
  • You are not under a civil examination or a criminal investigation by the IRS, and
  • You have not already been contacted by the IRS about your delinquent informational returns.

Pricing (in addition to the fee for Form 5471, see below)

  • $100 for Form 1040x if there was no income distribution from the corporation at all and 1040 does not need to be touched.
  • $100 for Form 1040X if there was income distribution from the corporation reported as salary (or dividends), but Form 5471 was not filed.
  • $350 Core/$450 Premier if there is unreported income distribution from the corporation, requiring that Form 1040 be reworked.
  • $450 Premier if income from the corporation was reported as self-employment instead of as salary and Form 1040 needs to be reworked.
  • A final Form 5471 including the distribution of previously untaxed income would cost $1000.

Please note that there are no 'almost-dormant' corporations (just like one cannot be almost pregnant). The occurrence of any business activity during the year would mean the corporation is no longer dormant and would require the preparation of Form 5471.

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