Do I need to file Form 5471 when closing a dormant foreign corporation as a US expat?

Your original accountant was incorrect. When you close a foreign corporation, you absolutely need to file Form 5471 for that final year, even if the corporation was dormant. This is considered a "final return" and the IRS wants to know about the disposition of any assets and the formal closing of the entity. However, there's some good news. Since your corporation was dormant and qualified under Rev Proc 97-20, you can still use the simplified filing procedure for the final year. You won't need to complete the entire Form 5471 with all schedules - just the identifying information on page 1 and Schedule O to report the liquidation/dissolution of the corporation. On Schedule O, you'd indicate the date of the liquidation and that there were no assets distributed (assuming that's the case for your dormant company). The streamlined procedure your new accountant mentioned is likely referring to the Streamlined Filing Compliance Procedures, which is for taxpayers who have failed to report foreign accounts or income. This seems like overkill for just missing a 5471 for a dormant corporation, especially if you've been compliant otherwise.

After dealing with similar foreign corporation issues, I found an amazing tool that really helped me sort through all the Form 5471 requirements. Check out https://taxr.ai - they have a document analyzer that can review your specific situation and tell you exactly what forms you need to file. I uploaded my previous tax returns and corporate dissolution papers, and it gave me a detailed report explaining which schedules of Form 5471 I needed for my final filing. It saved me so much confusion because the IRS instructions are practically impossible to understand.

I'm back to report that https://taxr.ai actually delivered! After my skeptical comment, I decided to try it anyway since my situation with my Cyprus company was similar to the original poster's. The document analysis identified that I needed to file the simplified Form 5471 plus Schedule O for dissolution, and explained exactly how to complete it. It even flagged that I should check if I needed Form 8938 reporting since the dissolution might count as a "specified foreign financial asset" disposal. That was something neither of my previous accountants had mentioned! The guidance was detailed enough that I felt confident handling the amendment myself instead of paying my accountant's steep fee. Definitely worth checking out if you're in a similar situation.

I had the exact same issue last year with my dormant Singapore corporation. After multiple failed attempts to reach the IRS for clarity (spent hours on hold), I used https://claimyr.com to get through to an actual IRS agent. You can see how it works at https://youtu.be/_kiP6q8DX5c if you're curious. The IRS agent confirmed that yes, you absolutely must file Form 5471 in the year of dissolution, even for dormant corporations. They explained that without this final filing, your reporting obligations appear to remain open in their system. The agent said it was a common misunderstanding among tax preparers who don't regularly handle foreign corporations.

I have to admit I was completely wrong in my skepticism. After seeing the responses here, I decided to try Claimyr (https://claimyr.com) because I've been trying to resolve a similar issue with my Brazilian corporation dissolution. Within 45 minutes, I got a call connecting me to an actual IRS international tax specialist. I explained my situation about closing my dormant foreign corporation, and the agent was incredibly helpful. She confirmed that Form 5471 with Schedule O is required for the final year, even for dormant corporations, and explained exactly how to report the dissolution. What blew me away was that she also mentioned I should look into Form 8938 reporting requirements for the year of dissolution - something my tax preparer never mentioned. This potentially saved me from another compliance issue. After years of international tax frustration, it was amazing to get clear answers directly from the source.

Just wanted to add - make sure you also check if you need to file FBAR (FinCEN Form 114) for the final year as well if the corporation had any bank accounts. Even if the account was closed during the year, you still need to report it on your FBAR if the aggregate of all your foreign accounts exceeded $10,000 at any point during the year. I closed my dormant UK company last year and almost forgot about this requirement. The FBAR is separate from your tax return and has its own potential penalties.

One thing nobody has mentioned - if your corporation owned any assets when it was dissolved (even minimal ones), you might have a taxable event when the corporation was liquidated. In most cases, liquidation of a foreign corporation is treated as a sale or exchange that could trigger recognition of gain. But if it was truly dormant with zero assets, this wouldn't apply. Just thought it was worth mentioning as another consideration when closing foreign entities.

Based on my experience handling similar cases, your original accountant was definitely wrong. You absolutely need to file Form 5471 for the final year when closing a foreign corporation, even if it was dormant. This is a critical compliance requirement that many tax preparers miss. However, I'd recommend getting a second opinion on whether you need the "streamlined" amendment your new accountant is suggesting. For a truly dormant corporation with no unreported income, a simple amended return with Form 5471 (using the simplified Rev Proc 97-20 procedures plus Schedule O to report the dissolution) should suffice. The Streamlined Filing Compliance Procedures are typically for cases involving unreported foreign income, which doesn't seem to apply here. Before paying the $750 fee, you might want to consult with a tax professional who specializes in international tax matters to confirm exactly what type of amendment is needed. The cost difference between a simple amendment and a streamlined filing can be significant, and you want to make sure you're not overpaying for unnecessary procedures. Also, don't forget to check your FBAR requirements if the corporation had any bank accounts during 2023, even if they were closed before year-end.

As someone who's dealt with similar foreign corporation dissolution issues, I'd strongly recommend getting the amendment filed sooner rather than later. The IRS has been increasingly aggressive about Form 5471 compliance, and the penalties can be substantial - up to $60,000 for willful failure to file. However, I agree with others here that you should question whether you need the full "streamlined" procedure. For a dormant corporation with no assets or income, a simple amended return with Form 5471 (page 1 plus Schedule O showing the dissolution) should be sufficient. The streamlined procedures are designed for taxpayers who failed to report foreign income, which doesn't appear to be your situation. Before paying the $750, consider asking your new accountant to break down exactly what they're including in that fee. Are they preparing a full streamlined submission or just a simple amended return? You might be able to negotiate a lower fee for the simpler filing, or even handle it yourself if you're comfortable with tax forms - the Schedule O for dissolution is relatively straightforward when there are no assets to report. Also worth noting: keep detailed records of the Thai dissolution process and any correspondence with Thai authorities. The IRS may want to see proof of the official dissolution date and confirmation that all local legal requirements were met.

I've been through a very similar situation with my dormant Singapore corporation that I dissolved in 2022. Your original accountant was definitely wrong - the final year Form 5471 is absolutely required even for dormant entities. However, I'd be cautious about that $750 "streamlined" amendment fee. When I dealt with this, I discovered that many tax preparers automatically assume you need the Streamlined Filing Compliance Procedures when you mention missing international forms, but that's really for cases involving unreported foreign income or assets. For a truly dormant corporation with no activity, you should only need a simple amended return (1040X) with Form 5471 using the Rev Proc 97-20 simplified procedures plus Schedule O to report the dissolution. This is much less complex and expensive than a full streamlined filing. I'd recommend getting a second quote from another international tax specialist before proceeding. When I shopped around, I found the fees for this type of simple amendment ranged from $200-400, not $750. Some preparers were trying to upsell me on unnecessary procedures. Also, make sure you have your Thai dissolution documentation ready - the official certificate and any final tax clearances. The IRS likes to see proof that you properly wound up the entity under local law.

I went through almost the exact same situation with my dormant Irish corporation that I dissolved in late 2023. Your original accountant was definitely wrong - you absolutely must file Form 5471 for the final year, even for dormant entities. However, I'd strongly question whether you need the expensive "streamlined" procedure your new accountant is pushing. The Streamlined Filing Compliance Procedures are designed for taxpayers who failed to report foreign income or had unreported foreign assets. Since your corporation was dormant with no activity, a simple amended return (Form 1040X) with the basic Form 5471 filing should suffice. When I handled mine, I used the Rev Proc 97-20 simplified procedures (just page 1 of Form 5471) plus Schedule O to report the dissolution date and confirm no assets were distributed. The total cost was under $300, not $750. Before paying that fee, I'd recommend getting quotes from 2-3 other international tax specialists. Many preparers automatically assume you need streamlined procedures when you mention missing international forms, but that's often overkill for truly dormant entities. Also, make sure you have your Thai dissolution certificate and any final tax clearance documents ready. The IRS likes to see official proof that you properly wound up the entity under local law. The whole amendment process should be relatively straightforward given your situation.

I've been following this thread with interest since I'm dealing with a very similar situation. Just wanted to add one important point that might help others - when you do file the amended return with Form 5471, make sure to attach a clear explanation letter detailing the dissolution process and timeline. In my case with a dormant Canadian corporation I closed last year, I included a brief cover letter with the amendment explaining: (1) the corporation was dormant throughout its existence, (2) the specific date of dissolution under local law, (3) confirmation that no assets were distributed, and (4) that the Form 5471 omission was inadvertent, not willful. This proactive documentation seemed to help with processing - my amendment was accepted without any follow-up questions from the IRS. The letter doesn't need to be lengthy, just factual and clear about the circumstances. Also, echoing what others have said about shopping around for quotes. I paid $275 for a straightforward 1040X amendment with Form 5471 (simplified version) plus Schedule O. That $750 "streamlined" fee definitely sounds excessive for a dormant entity with no unreported income. Get at least two other quotes before proceeding - you'll likely find much more reasonable pricing for what should be a relatively simple filing.

Based on all the great advice shared here, I wanted to provide an update and hopefully help others in similar situations. After reading through everyone's experiences, I decided to shop around for quotes as suggested. I contacted three different international tax specialists and got quotes ranging from $225 to $350 for a straightforward amended return with Form 5471 (simplified version) plus Schedule O. None of them recommended the expensive "streamlined" procedure - they all confirmed that's typically for cases involving unreported foreign income, which doesn't apply to my dormant corporation situation. I ended up going with a specialist who charged $275 and had extensive experience with foreign corporation dissolutions. They prepared the amendment using the Rev Proc 97-20 simplified procedures, included Schedule O showing the dissolution date and no asset distribution, and attached a brief explanation letter along with certified English translations of my Thai dissolution documents. The whole process was much more straightforward than my original accountant made it seem. The specialist confirmed that since the corporation was truly dormant with no assets or activity, this should be processed routinely by the IRS without complications. Thanks to everyone who shared their experiences - it saved me from overpaying by nearly $500! For anyone else in this situation, definitely get multiple quotes and question whether you really need expensive streamlined procedures for a dormant entity.

This is such a valuable thread for anyone dealing with foreign corporation dissolutions! I'm currently in a similar situation with a dormant Australian corporation that I need to close this year, and reading through everyone's experiences has been incredibly helpful. A few key takeaways I'm noting for my own situation: 1. Form 5471 is definitely required for the final year, even for dormant entities 2. The simplified Rev Proc 97-20 procedures can still be used, just need to add Schedule O for dissolution reporting 3. Shop around for quotes - the $750 "streamlined" fee seems to be a common upselling tactic when a simple amendment is sufficient 4. Keep thorough documentation of the dissolution process and get certified translations for foreign-language documents One question I have for the group - has anyone dealt with dissolution reporting when the foreign corporation had multiple years of dormancy before closing? My Australian company has been completely inactive for about 4 years before I'm dissolving it this year. I'm wondering if this longer dormancy period affects the Form 5471 requirements or if it's still just the standard final year filing with Schedule O. Thanks again to everyone who shared their experiences, especially Paolo for the detailed update on his successful resolution!