Form 5471

[The Real Halloween]

If you do not have to file an income tax return for the tax year, how do you file Form 5471? Can it be filed alone without Form 1040? Thanks for your comment.

[George4Tacks]

When all else fails READ THE INSTRUCTIONS. 5471 should be available 2/2/22 (Ah! another palindrome!)

[The Real Halloween]

@George4Tacks Thanks for your comments! The instructions do not address whether a filer should file Form 5471 even though the taxpayer is not required to file Form 1040. In the When and Where To File instruction, it stated that “Attach Form 5471 to your income tax return (or, if applicable, partnership or exempt organization return) and file both by the due date (including extensions) for that return.

The Exceptions From Filing section also does not address the issue of filing Form 5471 alone by the filer.

Your further thoughts and comments on this are appreciated. Thanks.

[George4Tacks]

Is the TP tied to a corporation that must file? Could the 5471 be filed with that return? TP has absolutely no US income to report on a 1040?

I do not know the answer. Maybe @itonewbie could be enticed to enter the fray. Be sure to thank him for anything he offers. 

[The Real Halloween]

Thanks for your comments. FYI, TP has no tied to a corporation that must file any US tax return and TP also has absolutely no US income to report on a 1040.

[The Real Halloween]

I was looking for some kind of exception like the one found in Form 8938 instruction as follows:

Exception if no income tax return required. If you do not have to file an income tax return
for the tax year, you do not have to file Form 8938, even if the value of your specified foreign financial assets is more than the appropriate reporting threshold.

But I cannot find such exception for Form 5471.  Perhaps, you might know.  Thanks.

[George4Tacks]

@itonewbie might know. He is extremely knowledgeable and helpful. 

[itonewbie]

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@The Real Halloween wrote:
TP has no tied to a corporation that must file any US tax return and TP also has absolutely no US income to report on a 1040.

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You mentioned the taxpayer has no ties with the corporation.  How so?  What kind of role, ownership, and control does the taxpayer have then in that corporation directly, by attribution, or otherwise?

Is the CFC dormant?

What category or categories is your client a filer of?

Are there other US shareholders who are filing for the same requirements?

[The Real Halloween]

@George4Tacks @itonewbie Thanks for your comments.
TP is the sole director and shareholder of the foreign corporation (category #1,2,3,4 and 5). The foreign corporation is not a dormant corporation as defined under Rev Proc 92-70.

As TP does not have to file an income tax return for the tax year, how should he file Form 5471?

Thanks again for your time and attention!

[itonewbie]

Why is your client not required to file a 1040?  Wasn't he paid any salary, even if he had no other income?

[The Real Halloween]

@itonewbie Thanks again for your attention. TP is not required to file a 1040 as he is below the filing thresholds.

[itonewbie]

Is the company incurring losses?

[The Real Halloween]

@itonewbie yes. Thanks.

[itonewbie]

Your client should still file a tax return in this case for various considerations.  It is also questionable, depending on a number of factors, whether an entity classification should have been or should now be made.

[The Real Halloween]

Noted with many thanks!