A U.S. Shareholder refers to any U.S. person who owns, directly or indirectly, 10% or more of the total combined voting power of all classes of stock entitled to vote of a foreign corporation. This classification is crucial for tax purposes, as it determines the applicability of certain U.S. tax laws, including the Controlled Foreign Corporation (CFC) rules, which aim to prevent tax avoidance by U.S. persons through foreign entities.