Due to the complexity of US tax rules, some of the tax reduction and simplification ideas that are shared online among non-experts can turn out to be ingenious in the middle. The idea of putting the business of a US citizen in the name of the foreign spouse is one of them. There are several problems with this idea, including the potential gift tax, substance over form, and revenue allocation. But the first thing that often causes problems for American expats is sanctions related to the return of information. Shares of a foreign entity owned by a foreign spouse are considered to be the implicit property of the US citizen, which creates reporting obligations for the foreign entity on the US citizen’s tax return. These obligations include the filing of Form 5471 in years of acquisition or disposition of shares by the foreign spouse. Form 5471 is one of the information returns that carries a minimum penalty of $ 10,000 for automatic failure to file that can go up to $ 50,000 if issues are not resolved quickly. Falling for this myth can be a costly mistake.