Form 5471 vs Form 5472: Which One Do I Need to File?

If you own a foreign business or have foreign ownership in your US company, you may be wondering which IRS form applies to your situation. Here’s the quick answer: Form 5471 is filed by US persons who own at least 10% of a foreign corporation, while Form 5472 is filed by US corporations that are at least 25% foreign-owned or by foreign corporations doing business in the US. Think of it this way: Form 5471 reports US ownership abroad, while Form 5472 reports foreign ownership in the US.

According to the IRS, penalties for non-compliance are severe, starting at $10,000 for Form 5471 and $25,000 for Form 5472. These forms help the IRS track cross-border business activities and prevent tax avoidance through international structures.

For detailed information about each individual form, visit our comprehensive guides on Form 5471 and Form 5472. This article breaks down exactly which form you need, when to file it, and how to avoid costly penalties.

What’s the Main Difference Between Form 5471 and Form 5472?

The fundamental difference comes down to the direction of ownership:

Form 5471 tracks outbound ownership – US persons reporting their interests in foreign corporations. You file this when you (as a US person) own at least 10% of a foreign corporation, serve as an officer or director, or control a foreign business.

Form 5472 tracks inbound ownership – Foreign persons reporting their interests in US entities, or foreign corporations reporting their US business activities. This applies when your US company has at least 25% foreign ownership, or when a foreign corporation conducts business in the United States.

Think of it this way: Form 5471 follows the money going out (US to foreign), while Form 5472 follows the money coming in (foreign to US).

Quick Comparison: Form 5471 vs Form 5472

Here’s a side-by-side comparison to help you determine which form applies to your situation:

Aspect	Form 5471	Form 5472
Who Files	US persons (citizens, residents, domestic entities)	US corporations with 25%+ foreign ownership OR foreign corporations doing US business OR foreign-owned US disregarded entities
What It Reports	US ownership in foreign corporations	Foreign ownership in US entities OR transactions between foreign-owned US entities and related parties
Direction	Outbound (US looking at foreign business)	Inbound (foreign looking at US business)
Ownership Threshold	Generally, 10% or more	25% or more foreign ownership
Filing Trigger	Ownership, control, or officer/director roles in a foreign corporation	Foreign ownership threshold OR reportable transactions with related parties
Zero Activity Filing	Required in most categories, even with no transactions	Generally not required for corporations if no reportable transactions (except foreign-owned disregarded entities must always file)
Initial Penalty	$10,000 per foreign corporation	$25,000 per form
Maximum Penalty	$60,000 per return	No cap (can continue indefinitely)
Attached To	Personal or business tax return (Form 1040, 1120, 1065)	Form 1120 or pro forma Form 1120 (for disregarded entities)
Electronic Filing	Available	Available for corporations; not available for foreign-owned disregarded entities
Common Filers	US expats owning foreign businesses, US shareholders of controlled foreign corporations	Foreign entrepreneurs with US LLCs, US companies with foreign investors, foreign corporations doing US business

How Do Filing Requirements Differ Between Form 5471 and Form 5472?

The filing requirements for each form target completely different ownership scenarios:

Form 5471 Filing Requirements:

You must file Form 5471 if you’re a US person (citizen, resident, domestic corporation, partnership, trust, or estate) who falls into any of these five filing categories:

• Category 1: You’re a US shareholder of a controlled foreign corporation (CFC) at any time during the tax year and owned stock on the last day it was a CFC
• Category 2: You’re a US officer or director of a foreign corporation where a US person acquired or disposed of stock equal to 10% or more of the corporation’s value
• Category 3: You’re a US person who acquired or disposed of stock that brought your ownership to 10% or more, or who disposed of stock that reduced your ownership below 10%
• Category 4: You’re a US person who had control of a foreign corporation for at least 30 consecutive days during the foreign corporation’s annual accounting period
• Category 5: You’re a US shareholder who owns 10% or more of a CFC for at least 30 consecutive days during the tax year

Form 5472 Filing Requirements:

You must file Form 5472 if your entity falls into any of these three categories:

• 25% Foreign-Owned US Corporations: Your US corporation has at least one direct or indirect 25% foreign shareholder at any time during the tax year, AND had reportable transactions with a related party
• Foreign Corporations Engaged in US Trade or Business: Your foreign corporation conducts business in the US AND had reportable transactions with related parties during the tax year
• Foreign-Owned US Disregarded Entities: Your single-member LLC or other disregarded entity is wholly owned by a foreign person (must file even with zero activity)

Key Difference: Form 5471 focuses on the US person’s relationship to the foreign corporation, while Form 5472 focuses on the foreign person’s relationship to the US entity. Form 5471 often requires filing even with no transactions, while Form 5472 (except for disregarded entities) generally only requires filing when reportable transactions occur.

What Information and Transactions Does Each Form Require?

The two forms require dramatically different levels of detail and focus on different aspects of the business relationship:

Form 5471 Information Requirements:

• Foreign corporation’s legal name, address, and country of incorporation
• Employer Identification Number (EIN) if the foreign corporation has one
• Complete stock ownership information for all US shareholders
• Detailed financial statements (balance sheet and income statement prepared under US GAAP)
• Information about earnings and profits
• Details of transactions between the foreign corporation and US shareholders
• Foreign tax information and credits
• Subpart F income calculations
• GILTI (Global Intangible Low-Taxed Income) computations

Form 5472 Information Requirements and Reportable Transactions:

• US corporation’s or disregarded entity’s EIN
• Information about all 25% foreign shareholders
• Details of the ultimate indirect 25% foreign shareholder
• Complete records of ALL reportable transactions (no minimum threshold)

Form 5472 requires explicit reporting of both monetary and non-monetary transactions between the reporting corporation and related foreign parties, including:

• Sales and purchases of inventory or tangible property
• Rents, royalties, and license fees (paid and received)
• Interest payments on loans or guarantees
• Service fees and compensation payments
• Loans, contributions, and distributions
• Cost-sharing arrangements and platform contributions
• Sales, purchases, or leases of intangible property
• Premium payments and insurance claims

Critical Distinction: Form 5471 requires comprehensive financial statements of the foreign corporation, while Form 5472 focuses exclusively on transactions between related parties. Form 5471 provides the IRS with a complete picture of the foreign corporation’s finances, while Form 5472 ensures transparency in cross-border transactions that could be used for profit shifting.

Both forms require converting all foreign currency amounts to US dollars using the appropriate IRS exchange rates.

Can I File Both Forms in the Same Year?

Yes, and many expat business owners with complex international structures file both forms annually. You might need to file both forms if your business setup involves ownership flowing in both directions.

Common Dual-Filing Scenarios:

Scenario 1 (Expat Business Owner with Foreign Investors): You’re a US expat living in Germany who owns 100% of a German GmbH (foreign corporation requiring Form 5471). You also have a US LLC that’s 30% owned by your German business partner (requiring Form 5472 for the foreign-owned US LLC).

Scenario 2 (Cross-Ownership Structure): You’re a US citizen who owns 60% of a UK limited company (requiring Form 5471), and that UK company owns 40% of your US C-corporation (requiring Form 5472 for the foreign-owned US entity).

Scenario 3 (Multi-Entity International Business): You’re a US expat entrepreneur with multiple foreign corporations in different countries (each requiring separate Form 5471 filings) and a US entity with foreign investors (requiring Form 5472).

How Do Penalties Compare Between Form 5471 and Form 5472?

The penalty structures differ significantly, with Form 5472 carrying notably harsher consequences:

Form 5471 Penalties:

• Initial penalty: $10,000 per foreign corporation per year
• Continuing penalty: Additional $10,000 for each 30-day period after the initial 90-day IRS notice
• Maximum penalty: $60,000 per return (penalty caps at this amount)
• Additional consequence: The statute of limitations on your entire tax return remains open indefinitely until you file

Form 5472 Penalties:

• Initial penalty: $25,000 per form (2.5 times higher than Form 5471)
• Continuing penalty: Additional $25,000 for each 30-day period after the initial 90-day IRS notice
• Maximum penalty: None (penalties can continue accumulating indefinitely)
• Additional consequence: Criminal penalties may apply in cases of willful failure to file

Critical Differences:

• Form 5472 starts at $25,000 versus Form 5471’s $10,000
• Form 5472 has no penalty cap, while Form 5471 caps at $60,000
• Both apply even if you owe no tax (they’re disclosure penalties, not tax penalties)
• Multiple entities mean multiple penalties for both forms

Filing a substantially incomplete form counts as a failure to file for both Form 5471 and Form 5472, so accuracy matters as much as timeliness.

When Are Forms 5471 and 5472 Due?

Both forms follow the same general deadline structure because they’re filed as attachments to your income tax return:

For Individual Taxpayers Filing Form 5471:

• Standard deadline: April 15
• Automatic extension for expats: June 15 (if living abroad)
• Extended deadline with Form 4868: October 15

For Corporate Taxpayers Filing Either Form:

• C-corporations: April 15 (for calendar year)
• S-corporations: March 15 (for calendar year)
• Extended deadline with Form 7004: Six months from the original due date

Special Filing Requirement for Form 5472 Disregarded Entities:

Foreign-owned disregarded entities face unique filing requirements. Even though these entities typically don’t file their own tax returns, they must file a pro forma Form 1120 with Form 5472 attached by the same deadlines. Additionally, these entities cannot file electronically and must submit their returns by mail or fax to the IRS.

Form 5471, by contrast, can be filed electronically when attached to an electronically filed tax return.

Learn more about expat tax deadlines and extensions.

Do Forms 5471 and 5472 Affect How Much Tax I Owe?

The two forms have dramatically different effects on your actual tax liability:

Form 5472 Tax Impact:

Form 5472 is purely informational. It reports transactions but doesn’t calculate any tax liability. Your actual tax obligations are determined by your underlying tax return (Form 1120, Form 1040, etc.), not by Form 5472 itself. The form ensures the IRS has transparency into cross-border transactions that could potentially be used for profit shifting.

Form 5471 Tax Impact:

Form 5471 is primarily informational, but can trigger significant tax obligations through several mechanisms:

• Subpart F income: US shareholders of CFCs may need to report certain types of passive income and other Subpart F income on their personal or corporate tax returns, even if the foreign corporation doesn’t distribute dividends
• GILTI (Global Intangible Low-Taxed Income): Individual US shareholders of CFCs may face GILTI tax on certain foreign earnings, which can significantly increase their US tax liability
• Section 965 transition tax: If you owned a CFC on certain dates, you may still have transition tax obligations related to previously untaxed foreign earnings

The Bottom Line: Form 5472 doesn’t generate tax liability, while Form 5471 can trigger substantial tax obligations even when the foreign corporation distributes nothing to you. However, most expats can reduce or eliminate US tax through the Foreign Earned Income Exclusion (up to $130,000 for 2025) or the Foreign Tax Credit.

What Common Mistakes Should I Avoid With Both Forms?

Based on our experience helping over 23,000 expats, here are the most frequent errors that apply to both forms:

Form 5471 Errors:

• Using constructive ownership incorrectly (stock owned by family members or related entities may be attributed to you)
• Incomplete financial statements (Form 5471 requires proper US GAAP financial statements, not quick spreadsheets)
• Miscalculating Subpart F income or GILTI
• Not filing even when the foreign corporation had zero activity

Form 5472 Errors:

• Missing the disregarded entity requirement (foreign-owned single-member LLCs must file even with zero activity)
• Failing to report small transactions (there’s no minimum threshold for Form 5472)
• Not understanding what qualifies as a related party transaction
• Attempting electronic filing for foreign-owned disregarded entities

Mistakes That Apply to Both Forms:

• Misidentifying which form to file (the direction of ownership determines which form applies)
• Not converting foreign currency correctly (all amounts must be in US dollars using proper IRS exchange rates)
• Filing after the deadline without requesting an extension
• Providing incomplete information (counts as failure to file for both forms)
• Not realizing you need to file both forms when you have ownership flowing in both directions

What If I Missed Filing Either Form in Previous Years?

If you’ve missed filing Forms 5471 or 5472 in previous years, both forms have the same path to compliance:

Streamlined Filing Compliance Procedures: For non-willful failures, the IRS offers streamlined procedures that may reduce or eliminate penalties. You’ll file the past-due forms along with amended tax returns for the prior three years and six years of FBARs.

Reasonable Cause: If you had a good reason for missing the filing (relied on professional advice, didn’t know about the requirement, etc.), you might qualify for penalty abatement based on reasonable cause for either form.

Critical Warning for Both Forms: The statute of limitations on your entire tax return remains open indefinitely when required Forms 5471 or 5472 are missing. This means the IRS can audit returns from 10, 15, or even 20 years ago if you never filed these forms. This applies equally to both forms and is one of the most serious long-term consequences of non-filing.

The worst thing you can do is continue not filing. Whether you’re missing Form 5471, Form 5472, or both, the sooner you come into compliance, the better your chances of minimizing penalties.

How Can Greenback Help With Both Forms?

At Greenback Expat Tax Services, we’ve helped thousands of expats manage the complexity of foreign business reporting, including both Forms 5471 and 5472. Our CPAs and Enrolled Agents possess in-depth expertise in the complex rules governing controlled foreign corporations, foreign-owned U.S. entities, and cross-border transactions.

We’ve prepared over 71,000 tax returns for expats in 190+ countries while maintaining a 4.9-star average on TrustPilot. Many of our accountants are expats themselves, working across 14 time zones and experiencing firsthand the challenges of managing international business structures.

Whether you need help determining which form (or both) you need to file, gathering the required documentation, preparing complex financial statements, calculating GILTI or Subpart F income, or catching up on missed filings through Streamlined Procedures, our team can guide you through the process with patience and expertise.

No matter how late, messy, or complex your situation may be, we can help. If you’re ready to be matched with a Greenback accountant, click the get started button below. For general questions on expat taxes or working with Greenback, contact our Customer Champions.

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Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or accounting advice. The information provided is general in nature and may not apply to your specific situation. Tax laws change frequently, and you should consult with a qualified tax professional about your individual circumstances before making any decisions or taking any action based on this information.