Foreign-owned U.S. corporations and disregarded entities
Form 5472 and a related Form 1120 filing may be required for reportable transactions with foreign related parties.
Foreign ownership • Foreign accounts and assets
International tax reporting in the U.S.
TaxFM prepares the forms that attach to a U.S. return when there is a foreign owner, a foreign company, a foreign account, or income earned abroad.
Who this is for
Four situations that add international forms to an otherwise ordinary return.
Foreign ownership does not create one universal extra form. What is required depends on the entity, ownership percentages, related parties, transactions, assets, and the countries involved.
U.S. owners of foreign entities
Depending on the facts, reporting may include Forms 5471, 8865, or 8858 and related international schedules.
International partnership or S corporation items
Schedules K‑2 and K‑3 may be required when operations or owner-level items have international tax relevance, subject to applicable filing exceptions.
Foreign accounts, assets, and income
An FBAR, Form 8938, the foreign tax credit, or the foreign earned income exclusion may apply to a U.S. person with accounts, assets, or earnings abroad.
International forms are not included automatically in a standard return fee. They require a separate eligibility and scope review, and several carry penalties that start at $10,000 or $25,000 whether or not any tax is owed.
The forms
What attaches to the return, and why.
Form 5472: reporting transactions with related parties
Filed for reportable transactions with foreign related parties. How it is filed depends on who files it. A 25% foreign-owned U.S. corporation attaches Form 5472 to its own tax return. A foreign-owned U.S. disregarded entity files no return of its own, so Form 1120 is completed as a cover sheet (pro forma): the IRS instructions ask for the name and address and items B and E, and nothing else.
Forms 5471, 8865 and 8858
Reporting by U.S. persons who own or control a foreign corporation, a foreign partnership, or a foreign disregarded entity. The filer category decides which schedules are completed — and two owners of the same company can fall into different categories.
FBAR (FinCEN Form 114) and Form 8938
Two separate disclosures of foreign accounts and assets, with different thresholds, different filing routes and different agencies. Filing one does not satisfy the other, and many people owe both.
Treaty positions, credits and exclusions
Form 8833 for a treaty-based position, Form 1116 for foreign taxes paid, Form 2555 for foreign earned income, Forms 3520 and 3520‑A for foreign gifts and trusts.
Thresholds
When an FBAR or Form 8938 is required
An FBAR is required when the aggregate value of your foreign financial accounts exceeds $10,000 at any time during the calendar year — not at year end, and not per account. Form 8938 has its own, much higher thresholds, and they depend on filing status and on whether you live in the United States.
- FBAR: more than $10,000 in aggregate at any point in the year. Due April 15, with an automatic extension to October 15.
- Form 8938, living in the U.S.: $50,000 at year end or $75,000 at any time — $100,000 and $150,000 on a joint return.
- Form 8938, living abroad: $200,000 at year end or $300,000 at any time — $400,000 and $600,000 on a joint return.
- Form 8938 is attached to the tax return and follows its deadline, extensions included. The FBAR is filed separately, with FinCEN.
- A foreign-owned U.S. disregarded entity files Form 5472 with a pro forma Form 1120 on the Form 1120 schedule — even in a year with no income, if there was a reportable transaction. An owner contribution or a distribution counts as one.
What to gather
What to send for the estimate
The exact package varies by situation. Commonly requested:
An ownership chart: who owns what, in which country, and in what percentage
Formation documents, the EIN notice, and any entity-classification elections
Year-end statements and the maximum balance for every foreign financial account
Signature authority over accounts you do not own
Transactions with related parties: contributions, distributions, loans, services, royalties, goods
Foreign tax paid: assessments, receipts, and the local return where relevant
Foreign pensions, brokerage accounts, insurance with cash value, and holdings in foreign entities
Gifts or inheritances received from foreign persons, and any interest in a foreign trust
Residence and travel records when a treaty position or the foreign earned income exclusion is in play
The maximum balance during the year matters more than the balance on December 31. An account closed mid-year still counts, and so does an account you do not own but can sign on.
Why the stakes differ here
Penalties for a missing form
Having no income, and no tax to pay, does not remove the obligation to file or the exposure to penalties. International information penalties are not calculated from tax owed at all: they are charged for the missing form — per form, per year, and in some cases per related party.
- Form 5472 — $25,000 per failure, and a further $25,000 for each related party for every 30‑day period once 90 days have passed after IRS notice.
- Form 5471 — $10,000 per failure, with continuation penalties of $10,000 per 30‑day period, up to $50,000.
- Form 8938 — $10,000 for the failure itself. If it continues more than 90 days after an IRS notice, a further $10,000 for each 30‑day period, with those additional penalties capped at $50,000.
- Form 8865 — $10,000 per failure, or 10% of the value of property contributed, capped at $100,000.
- Form 3520 — measured as a share of the amount involved: up to 35% of an unreported transfer to or distribution from a foreign trust, and up to 25% of an unreported foreign gift.
- Form 3520‑A — the greater of $10,000 or 5% of the gross value of the trust assets treated as owned by the U.S. person.
- FBAR — the amount depends on the facts and on whether the failure was willful. For a non-willful failure the penalty is calculated per report, not per account: that is what the Supreme Court held in Bittner v. United States. A willful failure can be penalized per account.
Reasonable cause can be argued, and the IRS has procedures for taxpayers who come forward first. Both are far easier while the filing is merely late, and much harder once it surfaces in an examination.
Deadlines
Different forms, different clocks.
FBAR — April 15, automatically to October 15
The extension is automatic; nothing is requested. The FBAR is filed electronically with FinCEN, not sent to the IRS with the return.
Form 8938 — with the return
It is attached to the income tax return and moves with it, extensions included.
Form 5472 — on the Form 1120 schedule
For a foreign-owned disregarded entity the pro forma Form 1120 is not filed with an ordinary return: the IRS directs it to a dedicated address, by mail or fax.
Forms 5471 and 8865 — with the owner's return
They attach to the return of the U.S. person who meets a filing category, which means a late personal return makes the information return late as well.
Preliminary review
What decides the scope
Use the contact form to describe the structure, the countries involved, and the years in question. Do not send account statements or identity documents by ordinary email — secure upload instructions follow once an engagement is appropriate.
- Who owns what, in which country, and since when
- Whether any transaction with a related party occurred during the year
- The maximum balance of every foreign account during the year, not only at year end
- Which years, if any, are already late
Start the review
Find the filing obligation before the IRS does.
Send the basic facts for a preliminary scope review, or book a short introductory call. If prior years were missed, say so — the route is different when the filing is voluntary.
General information for the 2026 tax year, not advice about your situation. Rules, amounts and dates are current as of the date of publication and can change. What applies to your return depends on facts we would go through together.