Instructions to Form 5471 - Information returns of U.S. officers, directors, shareholders of foreign companies 

January 8: The IRS posted final instructions for Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations (Rev. December 2013).

As explained by these final instructions [PDF 348 KB], Form 5471 is used by certain U.S. citizens and residents who are officers, directors, or shareholders in certain foreign corporations, in order to satisfy the reporting requirements of sections 6038 and 6046 (and regulations).

Filing exception for “constructive owners”

The Form 5471 final instructions (Rev. December 2013) modify the exception from filing by constructive owners described in Category 3, 4, or 5.

In determining constructive ownership for purposes of this exception, the final instructions (Rev. December 2013) add a reference to Reg. section 1.958-2, to the references to Reg. sections 1.6038-2(c) and 1.6046-1(i) that were included in the December 2012 revision of the instructions.

Effective for tax years beginning after 2011, Form 5471 requires a filer to provide a “Reference ID Number” for a foreign corporation when no EIN was entered on line 1b(1) for that foreign corporation.

The Form 5471 final instructions (Rev. December 2013) retain a discussion of the requirements for a Reference ID Number (Item 1(b)(2)) from the Form 5471 instructions (Rev. December 2012).

Net investment income tax

New on the 2013 version of Form 5471 is a reference to the net investment income tax.

Beginning in 2013, certain U.S. shareholders filing Form 5471 may be subject to the net investment income tax on their income from controlled foreign corporations (CFCs).

The draft instructions for Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, for 2013 were released earlier this week by the IRS. Read the Form 8960 draft instructions [PDF 375 KB] which will be finalized following OMB approval.

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