Do I need to file Form 5471 as a minority shareholder in foreign corporations?

You're right to be checking on this! For Form 5471, you generally don't need to file if you own less than 10% and aren't an officer or director. The form is typically required for controlling interests or certain threshold ownership percentages. For your situation as a minority owner (under 10%), you likely won't need to file Form 5471 unless you're part of a coordinated group of US persons who collectively own more than 50%. This is called "constructive ownership" - basically, if your investment group of US persons is acting together and collectively controls the company, different rules might apply. For FBAR, you're correct that without foreign financial accounts or signature authority, you don't need to file the FBAR. For future income, you'll report any distributions as foreign dividends on Schedule B of your tax return. If the foreign corporation is in a country with a tax treaty, you might qualify for reduced withholding rates. You'll also need to check if you need to file Form 8938 (FATCA) depending on the value of your foreign assets.

I was in a similar situation last year and found this tool called taxr.ai (https://taxr.ai) super helpful for navigating foreign investment reporting requirements. I uploaded my investment docs and answered some questions about my ownership percentages, and it gave me a clear breakdown of what forms I needed to file and which ones I could skip. For my situation (around 8% ownership in a few foreign corps), it confirmed I didn't need Form 5471 but did alert me to some other reporting requirements I hadn't considered. The tool analyzed the exact requirements based on my specific ownership structure rather than the general guidelines I was finding online that left me confused.

Just wanted to follow up - I ended up trying taxr.ai after seeing it mentioned here. Seriously wished I'd found this earlier! I was totally overthinking my foreign investment reporting. The system analyzed my specific situation (I own about 7% in two foreign companies) and confirmed I don't need to file Form 5471. But it did flag that I needed to report my ownership on Schedule B by checking "yes" to the foreign account question and mentioning my ownership interest in foreign corporations. Also gave me clear guidance on how to report future dividends. Saved me from either unnecessary filing or missing required disclosures. Really straightforward process that gave me peace of mind.

For anyone dealing with questions about foreign investment reporting, I highly recommend using Claimyr (https://claimyr.com) to actually speak with an IRS agent directly. I was going in circles trying to determine if my situation qualified for Form 5471 filing, and reading conflicting information online. I tried calling the IRS directly but kept getting the dreaded "due to high call volume" message for weeks. Then I found Claimyr, watched their demo (https://youtu.be/_kiP6q8DX5c), and decided to give it a shot. They got me connected to an IRS agent in about 15 minutes who confirmed that my minority ownership (under 10%) didn't require Form 5471 filing unless I was part of a coordinated control group. Completely worth it to get an official answer directly from the IRS rather than stressing about whether I was interpreting the rules correctly.

I need to eat some crow here. After my skeptical comment, I decided to try Claimyr anyway since I was desperate for answers about my foreign investments. It actually worked exactly as advertised and got me connected to an IRS representative in about 20 minutes (which is miraculous considering I'd been trying for weeks). The agent was able to confirm that my 8% ownership in several foreign corporations didn't trigger Form 5471 requirements since I wasn't an officer, director, or part of a controlling group. They also walked me through how to properly report future dividend income and what documentation I should keep. Having this conversation directly with the IRS gave me way more confidence than just reading online forums.

Just adding another perspective - I missed filing Form 5471 a few years ago for a similar situation (minority ownership in foreign corps) and got hit with a $10,000 penalty PER FORM that I should have filed. It was a nightmare. The issue wasn't my percentage ownership, but that my investment group was considered a "coordinated group of US persons" because we all invested through the same investment vehicle and collectively owned over 50%. Even though individually we were all under 10%, the IRS considered us a single entity for reporting purposes. So definitely don't take this lightly - the penalties are brutal if they determine you should have filed.

Quick question - does anyone know if stock in foreign companies purchased through regular US brokerages (like Schwab or Fidelity) trigger Form 5471 requirements? I own shares of some Canadian and European companies through my brokerage account but never considered filing anything special.

Based on what you've described, you're likely correct that you don't need to file Form 5471. With less than 10% ownership in each company and no officer/director role, you wouldn't meet the typical filing requirements under any of the 5 categories. However, I'd be extra careful about the "coordinated group" issue that others have mentioned. The fact that you're part of an 80-person investment group could potentially trigger constructive ownership rules if the IRS determines you're acting in coordination. The key factors they look at are: shared investment vehicles, common decision-making processes, voting agreements, or family/business relationships between investors. Since you mentioned it's a "mix of US citizens and non-US persons," only the US persons would count toward the 50% threshold for constructive ownership. You might want to document how your investment was structured - did everyone invest independently, or was there any kind of organizing entity or shared agreements? For future distributions, you'll report them as foreign dividends on Schedule B and may need to pay taxes on them even if they were already subject to foreign withholding taxes. You can often claim a foreign tax credit to avoid double taxation. Given the severe penalties ($10,000+ per form as mentioned above), it might be worth getting a definitive answer from a tax professional or the IRS directly, especially with the complexity of having 80 investors involved.