Canadian, Indian and other foreign companies
Form 5471 for US Owners, Officers and Directors of Foreign Corporations
Owning, controlling or sitting on the board of a foreign company can trigger Form 5471 every year, with a US$10,000 penalty for each company and year that is missed. Gurleen Kaur, CPA licensed in British Columbia and Washington State, prepares the forms and the schedules behind them.
Quick answer
Who has to file Form 5471?
US citizens, residents and certain entities connected with a foreign corporation in specific ways. The Form 5471 instructions define five main categories: officers or directors when a US person acquires a 10% stake (Category 2), US persons who acquire 10% or more (Category 3), US persons who control the company through more than 50% of the vote or value (Category 4), and US shareholders owning 10% or more of a controlled foreign corporation (Category 5), plus Category 1 for certain specified foreign corporations. The penalty for not filing is US$10,000 per company per year, with up to US$50,000 more after IRS notice.
The filer categories
Definitions from the Form 5471 instructions. Ownership can be direct, indirect or attributed through family and entities, so the category is a facts question.
| Category | Who it covers | Typical example |
|---|---|---|
| Category 2 | A US citizen or resident who is an officer or director of a foreign corporation when a US person acquires a 10% stake or an additional 10% | A US citizen director of an Indian private limited company when a US investor buys in |
| Category 3 | A US person who acquires stock that brings their ownership to 10% or more | A US citizen who buys 15% of a Canadian company |
| Category 4 | A US person who controls the company: more than 50% of the vote or value | A US citizen who owns 100% of a BC corporation |
| Category 5 | A US shareholder (10% or more) of a controlled foreign corporation | Two US siblings who each own 30% of a family company in India |
| Category 1 | US shareholders of certain specified foreign corporations under section 965 | Less common for owner-managed companies |
What the form asks for
- Ownership history and changes during the year
- Income statement and balance sheet translated to US dollars (Schedules C and F)
- Transactions between the company and its US owners or related parties (Schedule M)
- Earnings and profits and previously taxed income tracking, where required
- Information supporting any US income inclusion, such as Form 8992
Penalties
US$10,000 for each annual accounting period of each foreign corporation for failure to furnish the information on time. If it is still missing 90 days after an IRS notice, a further US$10,000 applies for each 30-day period, up to US$50,000 (IRS).
Several family members can each have a filing requirement for the same company, although one form can sometimes satisfy multiple filers.
Behind on Form 5471?
If the IRS has not contacted you, late information returns are generally attached to an amended return under the delinquent international information return procedures, with a reasonable-cause statement. The IRS states that penalties may still be assessed during processing. Compare your options in our catch-up guide.
Owner-managers in Canada
If you are a US citizen who owns a Canadian corporation, read our dedicated guide to US citizens who own a Canadian corporation, which covers US income inclusions, FBAR on company accounts and the section 962 election.
Common questions
Do I need Form 5471 if I only own 10% of a foreign company?
Possibly. A US person who acquires stock bringing ownership to 10% is a Category 3 filer for that year, and if the company is a controlled foreign corporation a 10% US shareholder can be a Category 5 filer every year.
I am only a director, not an owner. Do I file?
A US citizen or resident officer or director can be a Category 2 filer when a US person acquires a 10% stake or an additional 10% in the company.
What is the penalty for not filing Form 5471?
US$10,000 per foreign corporation per year, plus US$10,000 for each 30-day period after 90 days from an IRS notice, up to US$50,000.
Can one Form 5471 cover several family members?
In some cases the instructions allow multiple filers to satisfy the requirement with one form, but each person's category and the attribution rules need to be checked.
Does Form 5471 mean I owe US tax?
Not by itself. It is an information return, but US shareholders of controlled foreign corporations can also have income inclusions computed on Form 8992 and related schedules.
How do I fix missed years?
If the IRS has not contacted you, late forms are generally filed with an amended return and a reasonable-cause statement. Penalties can still be assessed, so plan the approach first.
Sources
Every rule and figure on this page links to the IRS, CRA or other official source it comes from. Amounts change; we re-check them before each engagement.
- IRS: Instructions for Form 5471
- IRS: About Form 8992
- IRS: Delinquent international information return submission procedures
Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated October 21, 2026. This page is general information, not tax or legal advice for your situation.
Related guides: US citizens with a Canadian company, Form 8865, Form 8858, Behind on US filings.
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