Us Irs Form 5471

[Thailaw]

The IRS requires that US citizens that own (or control) foreign corporations file Form 5471. Form 5471 is rather extensive and requires numerous attachments, thus creating work for the accountant and expense for the filer. Does any US citizen that owns property in Thailand through a Thai corporation file Form 5471? If yes, does the "summary filing" (only 1 page is required) for "Dormant Foreign Corporations" apply to companies that only hold property and engage in no business activity? If the answer(s) are "yes", can someone recommend an accountant in Thailand that can help me prepare Form 5471, in either the full or summary form. Thanks for any help.

[maxman71]

I have been filing the 5471 for years. But in addition to my Thai co. owning land and a house, the Thai. co also engages in a viable for-profit business. So my situation is a bit different than your's. The first time I completed the form, I read through all the IRS instructions, which took me several days of not only reading them, but understanding them; they are not entirely straight-forward and some lines on the 5471 do not have an accompanying instruction. So I engaged the services of a US tax professional to assist in completing and filing the first one. It wasn't cheap. Unless you can find a competent Thai accountant who fully understands this form, I suggest you get a competent US accountant who does. The way I do my 5471, is my Thai accountant does the Thai co. tax return, then provides me the data I need for the 5471, then I complete it. If you are wanting to find a Thai-based accountant to do the 5471, I suggest you go to a large int'l firm like E&Y, PWC, etc. and make sure whoever they assign to you, is fully competent on both the Thai and US side. Once the form is done correctly the first time and nothing changes in terms of how your Thai co. is set up, what sort of business activity, etc., you should be able to complete it in subsequent years.

[Thailaw]

I have been filing the 5471 for years. But in addition to my Thai co. owning land and a house, the Thai. co also engages in a viable for-profit business. So my situation is a bit different than your's. The first time I completed the form, I read through all the IRS instructions, which took me several days of not only reading them, but understanding them; they are not entirely straight-forward and some lines on the 5471 do not have an accompanying instruction. So I engaged the services of a US tax professional to assist in completing and filing the first one. It wasn't cheap. Unless you can find a competent Thai accountant who fully understands this form, I suggest you get a competent US accountant who does. The way I do my 5471, is my Thai accountant does the Thai co. tax return, then provides me the data I need for the 5471, then I complete it. If you are wanting to find a Thai-based accountant to do the 5471, I suggest you go to a large int'l firm like E&Y, PWC, etc. and make sure whoever they assign to you, is fully competent on both the Thai and US side. Once the form is done correctly the first time and nothing changes in terms of how your Thai co. is set up, what sort of business activity, etc., you should be able to complete it in subsequent years.

Thanks for this. In your case, I see the need to file the Form 5471. The real issue is the need to file if the company engages in no business activity and only holds property. And then, if the form must be filed, can't the summary filing for a "Dormant Foreign Corporation" be used, which only requires 4 items on page 1 to be completed. It cetainly seems that it should, since the company for which I am a 49% shareholder and the sole director engages in no business activity and earns no income -- sounds "dormant" to me. I would have expected that many US citizens that own property in Thailand through a company structure would have come accross this issue and had received advice on it. I doubt that many file Form 5471, but I could be wrong on that.

[craigt3365]

First time I have heard of this...I will watch this thread with interest!

[maxman71]

I have been filing the 5471 for years. But in addition to my Thai co. owning land and a house, the Thai. co also engages in a viable for-profit business. So my situation is a bit different than your's. The first time I completed the form, I read through all the IRS instructions, which took me several days of not only reading them, but understanding them; they are not entirely straight-forward and some lines on the 5471 do not have an accompanying instruction. So I engaged the services of a US tax professional to assist in completing and filing the first one. It wasn't cheap. Unless you can find a competent Thai accountant who fully understands this form, I suggest you get a competent US accountant who does. The way I do my 5471, is my Thai accountant does the Thai co. tax return, then provides me the data I need for the 5471, then I complete it. If you are wanting to find a Thai-based accountant to do the 5471, I suggest you go to a large int'l firm like E&Y, PWC, etc. and make sure whoever they assign to you, is fully competent on both the Thai and US side. Once the form is done correctly the first time and nothing changes in terms of how your Thai co. is set up, what sort of business activity, etc., you should be able to complete it in subsequent years.

Thanks for this. In your case, I see the need to file the Form 5471. The real issue is the need to file if the company engages in no business activity and only holds property. And then, if the form must be filed, can't the summary filing for a "Dormant Foreign Corporation" be used, which only requires 4 items on page 1 to be completed. It cetainly seems that it should, since the company for which I am a 49% shareholder and the sole director engages in no business activity and earns no income -- sounds "dormant" to me. I would have expected that many US citizens that own property in Thailand through a company structure would have come accross this issue and had received advice on it. I doubt that many file Form 5471, but I could be wrong on that.

I strongly urge you to seek out competent professional accounting/tax advice on whether or not you need to complete the 5471 or some other form. I am not familiar with the "Dormant Foreign Corporation" form. The US IRS is dutifully following a directive from the Charlatan in Chief, BO, to "mine the expats", which BO has been quoted as saying in the past. There are a myriad of new laws and enforcement initiatives aimed at flushing out US citizens who have not reported their foreign bank accounts and income derived from them. If caught not being in compliance, the penalties are truly draconian and could also result in criminal charges/jail time. This is no joke. Check it out for yourself by doing some web-surfing on this topic.

[maxman71]

First time I have heard of this...I will watch this thread with interest!

Check this out:

http://www.cnbc.com/id/44200169

This law was passed by the US Congress in 2009 and signed by BO in 2010. It was supposed to take effect Jan. 1, 2013. Its' implementation has been delayed until Jan. 1, 2014.

Many foreign banks are crying foul and some are threatening to not accept US citizen depositors as well as take other negative steps to avoid having to deal with it.

Maybe banks that are going to comply with this new law should issue armbands to their employees; one for the left arm with BO's mug on it, and the other for the right arm with the big, bold letters, "IRS".

[Thailaw]

I have been filing the 5471 for years. But in addition to my Thai co. owning land and a house, the Thai. co also engages in a viable for-profit business. So my situation is a bit different than your's. The first time I completed the form, I read through all the IRS instructions, which took me several days of not only reading them, but understanding them; they are not entirely straight-forward and some lines on the 5471 do not have an accompanying instruction. So I engaged the services of a US tax professional to assist in completing and filing the first one. It wasn't cheap. Unless you can find a competent Thai accountant who fully understands this form, I suggest you get a competent US accountant who does. The way I do my 5471, is my Thai accountant does the Thai co. tax return, then provides me the data I need for the 5471, then I complete it. If you are wanting to find a Thai-based accountant to do the 5471, I suggest you go to a large int'l firm like E&Y, PWC, etc. and make sure whoever they assign to you, is fully competent on both the Thai and US side. Once the form is done correctly the first time and nothing changes in terms of how your Thai co. is set up, what sort of business activity, etc., you should be able to complete it in subsequent years.

Thanks for this. In your case, I see the need to file the Form 5471. The real issue is the need to file if the company engages in no business activity and only holds property. And then, if the form must be filed, can't the summary filing for a "Dormant Foreign Corporation" be used, which only requires 4 items on page 1 to be completed. It cetainly seems that it should, since the company for which I am a 49% shareholder and the sole director engages in no business activity and earns no income -- sounds "dormant" to me. I would have expected that many US citizens that own property in Thailand through a company structure would have come accross this issue and had received advice on it. I doubt that many file Form 5471, but I could be wrong on that.

I strongly urge you to seek out competent professional accounting/tax advice on whether or not you need to complete the 5471 or some other form. I am not familiar with the "Dormant Foreign Corporation" form. The US IRS is dutifully following a directive from the Charlatan in Chief, BO, to "mine the expats", which BO has been quoted as saying in the past. There are a myriad of new laws and enforcement initiatives aimed at flushing out US citizens who have not reported their foreign bank accounts and income derived from them. If caught not being in compliance, the penalties are truly draconian and could also result in criminal charges/jail time. This is no joke. Check it out for yourself by doing some web-surfing on this topic.

The "Dormant Foreign Corporation" is not a different/separate form, but if the company qualifies within the definition of a "dormant foreign crporation" the form 5471 can be filed in "summary" form and only 4 items on page 1 need to be completed. I am checking now to see if the company which owns my home qualifies within the definition of a dormant foreign corporation. I will report my findings. I do have a tax advisor/accountant in the US. It is he that suggested that this form be filed. But my case is unusual and I do not believe that he has the knowledge (or incentive) to evaluate the situation properly -- just file the form and pay the fee, which is not insignificant. My inclination is to file the summary "Dormant Foreign Corporation" form in any event, to avoid any claim of non-compliance. But I am still looking at this approach.

I take you point on investment accounts. I have only found one investment bank in Singapore that will agree to open an account for a US national, and then only with a minimum deposit of $10 million. They say that they are not set up to handle the reporting requirements for US resident account holders. First they tax us to death, then lower US interest rates to zero, and now foreclose options to avoid their self-made fiasco by putting our money overseas.