IRS Form 5472 for Foreign-Owned LLCsHow to file it — and why missing it costs $25,000

Under Treasury Regulation §301.7701-2(c)(2)(vi), a domestic disregarded entity (a single-member LLC that has not elected corporate taxation) is treated as a corporation for the sole purpose of information reporting. If that LLC is owned by a non-US person, it must file Form 5472 with a pro-forma Form 1120 attached.

You file Form 5472 if all of the following are true:

• Your LLC is a US-formed single-member LLC (Wyoming, Delaware, Florida, etc.).
• The single member is a non-US person (individual or foreign entity).
• The LLC has not elected to be taxed as a US corporation on Form 8832.
• The LLC had at least one "reportable transaction" with the foreign owner or a related party during the tax year.

The last bullet is where founders get confused. A "reportable transaction" includes almost anything: capital contributions from the owner, distributions back to the owner, loans between the owner and the LLC, payments for services, reimbursement of expenses, and even paid legal or accounting fees where the related party is involved. In practice, virtually every foreign-owned single-member LLC has at least one reportable transaction — the initial capital funding qualifies.

IRC §6038A(d) sets the base penalty at $25,000 per year per Form 5472 that is late, incomplete or missing. If the IRS notifies the entity of the failure and it is not corrected within 90 days, an additional $25,000 accrues for each 30-day period beyond that. The penalty is not scaled to LLC revenue.

This is not a theoretical risk. The IRS has been enforcing the 5472 penalty since the 2018 tax year (the first year the rule applied to single-member LLCs), and CP-notices for missing 5472 are issued in the six-figure thousands each year. First-time abatement does not apply to Form 5472 penalties — the standard "reasonable cause" defence must be raised in writing and is granted only for genuine and documented circumstances.

Step 1 — Get the EIN

You cannot file 5472 without the LLC's EIN. If the EIN is missing, request it first (see our EIN for Non-Residents guide). Include the EIN on the top of Form 5472 and on the pro-forma 1120.

Step 2 — Complete pro-forma Form 1120

"Pro-forma" means you fill in only the identifying information at the top and write "Foreign-owned U.S. DE" across the top margin. You do not compute corporate income tax on this 1120 — the LLC is disregarded, so tax is not owed at the entity level. The 1120 is a container for the 5472.

Step 3 — Complete Form 5472

Part I: reporting corporation identification (your LLC). Part II: 25% foreign owner (you). Part III: related party (usually you again, as a single-member owner). Part IV: monetary transactions with the foreign related party. Part V, VI, VII, VIII: fill only if applicable (loans, non-monetary transactions, cost sharing).

The critical box is Part IV, line 12 — "amounts paid" or "amounts received" between the LLC and the foreign owner. Report the initial capital contribution here in year one. In subsequent years, report distributions and reimbursements.

Step 4 — Assemble and mail or fax

Attach 5472 to 1120. Mail or fax to: Internal Revenue Service, 1973 Rulon White Blvd, M/S 6112, Attn: PIN Unit, Ogden UT 84201. Fax number: 855-887-7737. Fax is the standard for non-US filers because it provides a delivery timestamp.

Step 5 — Keep the confirmation

Save the fax confirmation or certified-mail receipt. The IRS does not send acknowledgment for 5472; the fax confirmation is your only proof of timely filing.

The 5472 + pro-forma 1120 is due 15 April of the year following the tax year, or 15 June if the LLC's principal place of business is outside the United States (Treas. Reg. §1.6072-2). A non-US resident whose only US presence is the LLC entity itself qualifies for the 15 June deadline automatically.

An extension to 15 September (or 15 October for foreign filers) is available by filing Form 7004 before the original due date. No reason required — the extension is granted automatically once Form 7004 is filed on time. Filing Form 7004 late does not extend anything; the original due date has already passed.

The Treasury regulation is deliberately broad. Practical examples that trigger 5472 filing:

• You wire $2,000 from your personal bank in Argentina to fund the Mercury account. → Reportable.
• The LLC pays you $3,000 as a distribution from Stripe payouts. → Reportable.
• You loan the LLC $10,000 from personal funds to buy inventory. → Reportable.
• You pay a $500 legal fee personally on the LLC's behalf. → Reportable.
• You transfer the LLC's revenue to your personal Wise account. → Reportable.
• The LLC pays you $0 all year but you contributed $1 of initial capital. → Reportable.

The regulation lists a de-minimis exception, but it is so narrow that conservatively every foreign-owned LLC files. The cost of preparing Form 5472 through a CPA is $150–$400. The cost of not filing is $25,000. The maths is trivial.