For US owners of foreign corporations, last checked November 1, 2026
Late Form 5471: Penalties, IRS Notices and Your Options
If you own a Canadian or other foreign corporation and never filed Form 5471, the cost is more than one penalty, because the IRS time limit can stay open too. Here is what the law says, the routes for late filers, and what changes once the IRS has written to you.
Quick answer
What is the penalty for filing Form 5471 late?
US$10,000 for each annual accounting period of each foreign corporation. If the information is still missing 90 days after the IRS mails a notice, a further US$10,000 applies for each 30-day period or part of one, up to US$50,000 for each failure (Form 5471 instructions). Failing to file can also reduce your foreign tax credits by 10% (26 U.S.C. 6038(c)), and the time limit for the IRS to assess tax does not run out until 3 years after the information is furnished (26 U.S.C. 6501(c)(8)).
At a glance
- Penalty
- US$10,000 per corporation per year, and up to US$50,000 more after an IRS notice
- Foreign tax credits
- Can be reduced by 10%, and further if the failure continues
- Time limit
- Stays open until 3 years after the information is furnished
- Not contacted yet
- Look at the delinquent international information return procedures or Streamlined
- Source
- Form 5471 instructions, checked November 1, 2026
Why missed years stay open
Normally the IRS has a limited time to assess tax on a return. Where Form 5471 information was not furnished, that time does not expire before 3 years after it is furnished (26 U.S.C. 6501(c)(8)).
If the failure was due to reasonable cause and not willful neglect, this extension applies only to the items related to the failure. Without reasonable cause, it can reach the whole return for that year. This is why many owners deal with missed years even when no penalty notice has arrived.
The routes for late filers
The route depends on whether income was also missed, whether the failure was willful and whether the IRS has been in touch. These are general descriptions, not advice for your facts.
| Your situation | Route | What it means | Source |
|---|---|---|---|
| All income was reported and only information returns were missed; no examination, no investigation and no IRS contact about them | Delinquent international information return procedures | Forms attached to an amended return, with a reasonable-cause statement. The IRS says penalties may be assessed before it reviews the statement, so you may need to respond to letters | IRS |
| Income was also left off, or returns were missed, and the failure was not willful | Streamlined procedures; see IRS Streamlined filing | Returns, FBARs and information returns for the covered years, with a certification of non-willful conduct. Not available under examination or investigation | IRS |
| Already under examination, or contacted about these returns | Get advice first | The delinquent procedures are for people who have not been contacted. Do not file anything before reviewing your position | IRS |
If you received an IRS notice
A CP215 notice means the IRS has charged a civil penalty, and it explains the due date, the amount and the payment options. The IRS says to call the number on the notice if you disagree, with your paperwork ready (IRS). The IRS page does not tie this notice to one form, so check which form and year your notice refers to.
Watch the dates. For Form 5471, the further US$10,000 penalties start if the information is still missing more than 90 days after the IRS mails a notice of the failure (IRS).
What reasonable cause means here
The law gives relief where reasonable cause is shown to the IRS's satisfaction (26 U.S.C. 6038(c)(4)(B)), and the instructions point to the regulations for when the penalty can be alleviated (IRS). It is a facts question about why the forms were missed and what you did once you knew. We do not promise any outcome; the IRS decides penalties.
When to get help
Get help if:
- You have several years or several corporations to catch up on
- You are not sure whether income was also missed, such as section 951A or Subpart F income
- You have received an IRS letter or penalty notice
- You are unsure how to explain why the forms were missed
We prepare current and late years as part of our Form 5471 filing service.
Common questions
Does the penalty apply if I owed no US tax?
It can. The penalty is for failing to furnish the information. It does not depend on the tax due.
Is the US$10,000 per form or per year?
It applies for each annual accounting period of each foreign corporation, so several corporations or years can each carry a penalty.
Can I just start filing this year and leave out the past?
That choice has risks. Past years may stay open under 26 U.S.C. 6501(c)(8), and a current filing can draw attention to the earlier gap. Compare the routes first.
Which route is right for me?
It depends on whether all income was reported, whether the failure was willful and whether the IRS has contacted you. Choose before filing anything, because what you file first can affect what remains open to you.
What is a CP215 notice?
The IRS says it sent the notice because it charged you a civil penalty. The notice explains the due date, the amount and the payment options, and you can call the number on it if you disagree.
Will the IRS remove the penalty?
We cannot promise that. Relief depends on the facts and on the IRS's decision. A clear explanation of why the forms were missed matters.
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 (Rev. December 2025)
- 26 U.S.C. 6038, penalties and reasonable cause (Cornell LII)
- 26 U.S.C. 6501(c)(8), time limit to assess tax (Cornell LII)
- IRS: Delinquent international information return submission procedures (reviewed April 19, 2026)
- IRS: Streamlined filing compliance procedures
- IRS: Understanding your CP215 notice
Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated November 1, 2026. This page is general information, not tax or legal advice for your situation.
Related guides: Form 5471 filing service, Form 5471 guide, Dormant corporations, IRS amnesty and Streamlined, Behind on US filings.
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