USA Form 5471 audit - lack of compliance in the country of incorporation

Apr 27, 2020
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United States
The address (and thus claimed residency) of the director that has moved to the US was not updated for a single director limited foreign company. By not updating the address the director got exposed to the penalties in the country of incorporation. The company was dormant and was not trading and was closed soon after. There were no financial/accountancy issues.

Can the director be fined in the US - during the IRS audit - lack of compliance? Can the country of incorporation be notified about the issue?


Werner Reisacher

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Jun 30, 2017
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Form 5471 is an integrated part of the FATCA reporting requirements that are focusing on ownership and/or control over foreign financial assets. It falls under the jurisdiction of the US Treasury but the IRS (a division of the treasury) is handling the execution of the law. Deliberately providing false information on a key issue on that form to the IRS is punishable. If the error or omission was not deliberate, I recommend that he is submitting a correction of the address to the IRS, together with a cover letter explaining the situation.

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