Late international forms, when your income was all reported
Forms like 5471 (foreign companies), 3520 (foreign gifts and trusts) and 8938 (foreign assets) carry penalties of $10,000 or more each, even when no tax is owed. If your income was fully reported and only these forms are missing, this is the route the IRS describes for filing them late.
The short version
- For taxpayers who reported all income but didn't file required international information returns.
- You can't be under IRS examination or investigation, and the IRS can't have already asked for the forms.
- Penalties can still be assessed. A strong reasonable cause statement is what protects you.
- If there's unreported income too, Streamlined is usually the better route, because it includes no information-return penalties.
1Which forms this covers
| Form | What it reports | Typical penalty for not filing |
|---|---|---|
| 5471 | Owning part of a foreign corporation | $10,000 per form, per year, plus $10,000 for every 30 days it stays unfiled after an IRS notice (up to $50,000 more). It can also reduce your foreign tax credits. |
| 8865 | Interests in a foreign partnership | $10,000 per form, per year, plus up to $50,000 more after an IRS notice. Not reporting property you put into the partnership: 10% of its value, up to $100,000. |
| 8938 | Specified foreign financial assets | $10,000, plus $10,000 for every 30 days it stays unfiled after an IRS notice (up to $50,000 more) |
| 3520 | Foreign trusts, large foreign gifts and inheritances | Transfers to or distributions from a foreign trust: the greater of $10,000 or 35% of the amount. Foreign gifts or inheritances: 5% of the value for each month it's late, up to 25%. |
| 3520-A | Annual return of a foreign trust with a U.S. owner | The greater of $10,000 or 5% of the trust assets you're treated as owning, plus $10,000 for every 30 days after an IRS notice |
| 8858 | Foreign disregarded entities and foreign branches | $10,000 per form, per year, plus up to $50,000 more after an IRS notice. It can also reduce your foreign tax credits. |
| 926 | Transfers of property to a foreign corporation | 10% of the value of what was transferred, up to $100,000 unless the failure was intentional |
| 5472 | A U.S. corporation that's at least 25% foreign-owned, or a U.S. LLC owned by a foreign person | $25,000 per form, per year, plus $25,000 for every 30 days after an IRS notice, with no maximum |
| 8621 | Foreign mutual funds, ETFs and other PFICs | No set penalty, but the year stays open to IRS review until it's filed (see below) |
A missing form can also keep that year's whole tax return open to IRS review: the normal three-year deadline doesn't start until the form is filed.
2How to file them late
- Most forms are attached to an amended income tax return for the year, filed following the normal amended return instructions.
- Forms 3520 and 3520-A are filed according to their own instructions, not with an amended return.
- Each form can carry its own reasonable cause statement.
You qualify only if you're not under civil examination or criminal investigation and the IRS hasn't already contacted you about the missing forms.
3The reasonable cause statement
Since late 2020, filing under these procedures doesn't automatically avoid penalties. The IRS can assess them under its normal rules. For most forms, a penalty may be assessed during processing without the statement being considered first, which means responding to IRS letters with your reasonable cause explanation. For Forms 3520 and 3520-A, the IRS considers the statement before assessing.
This is why the statement is the most important page in the envelope.
Common questions
I own a small company abroad. Do I need Form 5471?
If you own 10% or more of a foreign corporation, often yes, and sometimes extra rules apply to the company's profits. It's one of the most commonly missed forms for expat business owners.
My parents gave me money from abroad. Is that taxable?
Usually not taxable, but gifts or inheritances from foreign individuals over $100,000 in a year must be reported on Form 3520. The penalty for missing it can be steep, so it's worth fixing.
Missing international forms? Let's pick the safest route.
Our tax team will compare this route with Streamlined for your situation, and prepare the forms and statements for you.
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Reviewed by Lewis Grunfeld, CPA. Based on the IRS's published Delinquent International Information Return Submission Procedures. General information, not advice for your specific situation.