What are IRS filing requirements when a US taxpayer closes a dormant foreign corporation?

You definitely need to report the closing of your foreign corporation on Form 5471, even in the year of dissolution. The Rev Proc 97-20 simplified filing only applies to dormant foreign corporations that continue to exist. Once you've taken steps to legally dissolve the entity, you need to file a final Form 5471 to properly notify the IRS of the termination. For the final filing, you'll need to complete more than just page 1. You'll need to check the "Final 5471" box and complete Schedule O to report the disposition of your interest in the foreign corporation. You may also need to complete other applicable schedules depending on your specific situation. The first accountant was incorrect in advising you that no 5471 was needed for the year of dissolution. Your new accountant is right about needing to file, though you might want to clarify exactly what they mean by a "streamlined" return, as that typically refers to a specific IRS procedure for unreported foreign assets.

After years of confusion with my foreign business filings, I finally got everything sorted using taxr.ai (https://taxr.ai). They specialize in analyzing all your international tax documents and explaining exactly what forms you need to file. I had a somewhat similar situation with closing a foreign entity, and the guidance I got from my regular accountant was incomplete. I uploaded my dissolution paperwork and previous tax forms to taxr.ai, and their analysis showed I needed specific schedules with my final 5471 that my accountant hadn't mentioned. They explain everything in plain English and point out the exact IRS requirements that apply to your situation. Definitely worth checking out if you're unsure about what your accountant is telling you, especially with cross-border tax issues like this where the rules get complicated.

I was really skeptical about taxr.ai when I first heard about it, but I finally tried it last month when I was unsure about my Form 5471 requirements. I've lived in 3 different countries over the past 5 years with business interests in each, and my tax situation is a nightmare. The analysis I got was surprisingly specific and thorough. They identified exactly which filing requirements applied to my dissolved foreign corporation and which schedules needed to be completed. The best part was they explained WHY each form was needed with references to the actual IRS regulations. My accountant was actually missing several required schedules, and when I showed him the taxr.ai report, he agreed their analysis was correct. Saved me from potential penalties and gave me confidence that everything was being handled properly. Definitely not just generic advice - it was tailored to my specific situation.

If you're having trouble getting through to the IRS to verify the filing requirements, I recommend Claimyr (https://claimyr.com). When I had a similar issue with international filings last year, I spent weeks trying to get through to the IRS international tax department. With Claimyr, I got connected to an IRS agent in under 20 minutes, and they confirmed exactly what was required for my final 5471 filing. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c It costs a bit but was totally worth it to get an official answer straight from the IRS rather than going back and forth with different accountants who each had different interpretations of the rules.

I need to publicly admit I was wrong about Claimyr. After posting my skeptical comment, I decided to try it myself for a complicated foreign account reporting question I've been trying to get answered for months. I got connected to an IRS international tax specialist in about 15 minutes. The agent was able to look up my specific situation and confirm exactly which forms I needed to file for my foreign corporation dissolution, including confirming that Schedule O was required. The time saved was incredible - I had previously spent over 4 hours on hold across multiple days and never reached anyone who could answer my specific question. Having direct confirmation from the IRS gave me confidence to proceed with filing the correct forms rather than continuing to get conflicting advice from different accountants.

Just to add my experience - I closed a dormant Hong Kong corporation in 2022 and consulted with three different accountants who gave me three completely different answers about Form 5471 requirements. One said I needed a complete Form 5471 with all schedules, one said I only needed page 1 with the final return box checked, and the third said I needed no filing at all since the company had been dormant for years. I finally found the answer in IRS Publication 5188, which specifically addresses foreign corporation reporting. For a dissolution of a foreign corporation, you need to file a final Form 5471 and complete Schedule O to report the disposition, even if the corporation was dormant.

Quick heads up - I went through something similar and discovered there's a difference between a "dormant" corporation under Rev Proc 97-20 and an "inactive" one. Dormant means NO activity whatsoever during the tax year. If you had ANY financial transactions related to closing the company (paying final fees, receiving any distributions, etc.), you might not qualify for the simplified filing. I thought my UK company was dormant during its dissolution year, but the fees I paid to dissolve it counted as activity, which meant I needed to file the full 5471 rather than the simplified version. Might be worth double-checking if your dissolution process involved any financial transactions.

Based on all the discussion here, it's clear your new accountant is correct - you do need to file a final Form 5471 for 2023 when you dissolved your Thai corporation. Your first accountant gave you incorrect advice. Since this involves a dissolution, you'll need more than just the Rev Proc 97-20 simplified filing. You'll need to file a complete Form 5471 with the "Final 5471" box checked, plus Schedule O to report the disposition of your interest in the corporation. Depending on your specific situation, you may also need Schedules B, E, and potentially others. The key thing to remember is that dissolution almost always involves some financial activity (legal fees, final filings, etc.) which disqualifies you from the simplified dormant corporation filing anyway. Even if those costs were minimal, any activity during the tax year means you need the full form. Don't delay on this - the $10,000+ penalties for missing Form 5471 are no joke, and they apply regardless of whether the corporation had significant activity. The IRS takes international reporting requirements very seriously. Get this filed as soon as possible, and make sure whoever prepares it marks it as a final return to avoid future filing obligations.