• 🌎 Form 5471 – Controlled Foreign Corporation (CFC) Reporting Obligation

    Under Internal Revenue Code §6038 and §6046, a U.S. person — an individual, corporation, partnership, or trust — who directly, indirectly, or constructively owns 10% or more of the total voting power or value of a Controlled Foreign Corporation (CFC) must file Form 5471. This applies even if ownership changed during the tax year.

    • Who files: Any U.S. person that meets the ownership threshold in a foreign corporation that qualifies as a CFC.
    • If a U.S. corporation owns the CFC: the U.S. corporation files Form 5471.
    • If a shareholder of a U.S. corporation owns the CFC directly, that shareholder must file — but only if they are a U.S. person.
    • Non-U.S. shareholders: do not file Form 5471, even if they own a CFC through a U.S. entity.
    !

    Penalties for Non-Compliance: Failure to file Form 5471 may result in penalties under IRC §6038(b), starting at $10,000 per form, per year, plus an additional $10,000 for each 30-day period the failure continues (up to $50,000 per failure). The IRS may also suspend foreign tax credits until compliance is achieved.

    ✅ Only the U.S. person who owns the CFC is responsible for filing Form 5471. Ownership by non-U.S. persons does not create a filing requirement. Please complete all questions required for Form 5471 preparation to ensure accurate reporting.

  • 📝 Instructions for Completing the Form 5471 Questionnaire

    This questionnaire can be saved as a draft while you are completing it. If you are unsure about certain fields, provide as much information as possible before saving.

    1

    Complete as many fields as possible.

    2

    Scroll down to the end of the form and press “Save” to create a draft link.

    3

    Forward the draft link to tax@finops.company along with your questions or concerns.

    Our team will review your draft and provide clarifications before you finalize. This ensures your Form 5471 is complete, accurate, and compliant.

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    • [Schedule A] Stock of the Foreign Corporation 

    • 📊 Form 5471 – Schedule A: Stock Ownership Details

      Schedule A of Form 5471 requires reporting ownership details of the foreign corporation’s stock. This schedule helps the IRS understand how ownership is structured among U.S. shareholders and whether any stock changes have occurred.

      1

      Description of each class of stock: e.g., Common, Preferred, including voting rights and par value if applicable.

      2

      Number of shares at the beginning of the year: Total issued and outstanding shares as of the first day of the corporation’s accounting year.

      3

      Number of shares at the end of the year: Total issued and outstanding shares as of the last day of the accounting year.

      ✅ Key Instructions:

      • Report only issued and outstanding shares (do not include authorized but unissued stock).
      • Include all classes of stock if more than one exists.
      • Click +Add Row for each additional class of shares.
    • [Schedule B] Shareholders of Foreign Corporation 

    • 👥 Form 5471 – Shareholder Information

      In this part, list all U.S. and foreign shareholders of the foreign corporation — not just U.S. filers.

      1

      Name of shareholder: Full legal name (individual or entity).

      2

      Address of the shareholder: Complete mailing address including street, city, state/province, postal code, and country.

      3

      Identifying the number of shareholders: U.S. TIN if available. If foreign, enter their foreign tax ID number.

      4

      Description of each class of stock held: Use exact class name (e.g., “Common,” “Preferred”) as reported in Schedule A.

      5

      Number of shares at the beginning of the year: Total shares held at the start of the accounting year.

      6

      Number of shares at the end of the year: Total shares held at year-end (include all classes).

      ✅ Key Instructions:

      • Include all direct shareholders, both U.S. and foreign.
      • Be consistent with what you reported in Schedule A.
      • Use one row per stock class if a shareholder owns multiple classes.
      • Click +Add Row for each additional class of shares.
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    • 📊 Preparing Financial Statements in U.S. GAAP

      We now ask you to prepare the Profit & Loss Statement (P&L) and Balance Sheet of the foreign entity in accordance with U.S. GAAP standards.

      To simplify this process, please use our sample spreadsheet template. Completing your statements in this format ensures consistency and compliance for reporting purposes.

      📥 Open Sample Spreadsheet

      You can download this spreadsheet, complete it offline, and then upload your final version.

      🔎 The spreadsheet includes an “Example” tab with a video walkthrough showing how to complete the template step by step. Please review it carefully before preparing your own P&L and Balance Sheet.

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    • ✅ Certification Statement

      By submitting this questionnaire and the requested documentation, I certify that all information provided is complete, accurate, and reflects all relevant facts necessary for the proper preparation of the corporate tax return.

      ⚠️ Acknowledgment of Responsibility:

      I understand that any omissions, inaccuracies, or failure to disclose required information may result in delays, IRS penalties, audits, or other consequences, and I accept full responsibility for such outcomes.

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