Streamlined Procedure 5471 etc

Accidental American here. 47 years old. Never lived in the USA. Coincidentally my wife is in the same boat.

So going to do 6 years of fbars and 3 years tax returns.

Unfortunately I run a business. My wife and I both own 25%. I am a director, she is not.

When I do the 5471s my understanding is that you only need to file in the year that you go over the particular threshold. What happens if that is more than three years ago?!  Should I include a form for the correct year?

I have a sipp but am going to file for treaty treatment and assume it isn't a pfic.

Then paye income and qualified dividends. 

Anyone know of an adviser who will check over the forms. I want to do them myself so I understand what is going on. Also it seems some advisers are in the game of frightening people into big fees....

roblmp - as you an your wife are both US persons your first port of call should the UK accountants who created the entity and have advised you since. You'll obviously want to do some PFIC testing on your own company and you may want your own accountant to advise on that. You will want to speak with your SIPP trustee about the US tax & reporting issues.  It may be that the problem you describe was not one of your own doing.

Well maybe I need someone to look at this. Plenty of us based companies offering streamline procedure, ie 3 years tax returns and 6 years fbars. And 4571s. For 1450 and 485 dollars respectively.

Anyone got any uk based recommendations at similar prices?

The important question is whether the advice is adequate and suitable for your needs; which  appear pretty high risk because you already have several professional advisers, so it could seem odd to the IRS that you are only now choosing to come forward. Why did the existing advisers not tell you to handle your affairs with the US in mind? Will you owe PFIC tax on any excess distributions from your own company?

In terms of selecting any tax adviser to assist with US tax matters, mosty UK based individuals will want to check that any proposed tax adviser is qualified with at least one professional accounting or tax institution in the UK as well as in the United States so that they know that the adviser is adequately regulated in the UK. Indeed, more broadly, for most UK based individuals there are often considerable advantages in having a UK based adviser who can jointly advise on both US and UK tax issues and (possibly) handle both sets of tax returns in the UK.

These include:
1. The client and the adviser being located in the same time zone.
2. Client documents and workpapers being held outside of the United States; which many people perceive as providing additional protection in the event of IRS investigations.
3. Advisers outside of the European Union are unable to offer the protections to clients provided by the UKs Proceeds of Crime Act, which requires all tax professionals throughout the UK to be regulated and supervised for anti-money laundering protection purposes. Here in the UK it is a criminal offence to offer any tax preparation or advice unless the adviser is supervised. Quite unlike within the EU, there is no requirement for mandatory regulation of tax advisers in most of the United States.
4. The fact that although there are roughly one million paid tax professionals within the United States, that there are naturally only very few amongst these who understand enough about the US reporting of foreign based taxpayers.
5. Most tax advisers outside of the UK are not bound by UK ethical standards, which set out fundamental principles of integrity, objectivity, competence and care, confidentiality and behaviour (http://www.tax.org.uk/.../professional-conduct-relation...).
6. The opportunity in the unlikely event that things ever go wrong to get issues addressed through a supervisory body that is closer to the client than an adviser located several thousand miles away.

Will you owe PFIC tax on any excess distributions from your own company?

@guya - this question in your answer confused me - how can a company doing actual work I.e. Not just a holding entity  (My assumption given the way the original  poster phrased his question) be considered to be giving an excess distribution and fall into pfic?

Sorry if this is an ignorant question but the pfic issue always scared me so I have tried to avoid getting any where near it! Yet your statement suggests there may yet be more traps!


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A common trap indeed. A foreign corporation is treated as a PFIC from the first quarter that is fails the "passive asset test". Have you or your existing accountants done any PFIC testing yet to find out if it failed and if so from what date??? Your existing advisers would have identified you, so would have known you are US persons from the day the company was incorporated; and should have discussed this with you when it was incorporated and ever since...Once a PFIC always a PFIC...

I'm not the OP - in my case, it is clear I'm a filing us person. While we've never explicitly discussed pfic, I assume based on your answer this explains why I'm always urged to payout any profits and not have anything sitting passively on the balance sheet! Thanks


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I have filed a 5471 for our UK limited company, however, I am now confused whether I needed to file or not. As far as i can tell a only a public limited company (PLC) is classified as a US corporation for tax purposes (Regs. § 301.7701-2(b)((i)) and our company is privately held (2shareholders both UK/US citizens).  It would be great if someone could clarify please.

The foreign company you describe is 100% owned by US persons, so an annual Form 5471 is required unless the entity has made a check the box election. Within Form 5471, you will calculate any income taxable under SubPart F or IRC Section 956.

I suspect you might be confused by language discussing "per se" corporations?

Thanks Guya, no escape from the 5471 for me then this year and for the foreseeable future. Always such a pain/time consuming doing the books according to US GAAP but will make a start for 2016 soon.

The U.K. Limited company is a corporation for U.S. tax purposes unless an election has been made. 301.7701-3.

I'm not the OP - in my case, it is clear I'm a filing us person. While we've never explicitly discussed pfic, I assume based on your answer this explains why I'm always urged to payout any profits and not have anything sitting passively on the balance sheet! Thanks


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Just to close out my part - we've always treated my company as a Controlled Foreign Corp, filed form 5471 and never retained any profits so pfic doesn't apply.


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