Form 5472 for foreign-owned single-member LLCs
The most expensive filing most non-resident founders have never heard of. Here is what it is, who must file and how to avoid the penalty.
Quick answer
If you are not a US person and you own 100% of a US LLC that has not elected corporate tax treatment, the LLC must file Form 5472 attached to a pro forma Form 1120 every year it has a reportable transaction with you — which includes simply putting money in or taking money out. It is due April 15 for calendar-year LLCs, cannot be e-filed, and the penalty for missing it is $25,000.
Why a "disregarded" LLC has to file
A single-member LLC is normally ignored for US income tax. But since tax years beginning in 2017, Treasury regulations (TD 9796) treat a US single-member LLC wholly owned by a foreign person as a corporation for Form 5472 reporting purposes only. The aim is transparency about money moving between the LLC and its foreign owner.
What counts as a reportable transaction?
- Money you contribute to the LLC (even a small initial deposit)
- Distributions you take out
- Loans between you and the LLC
- Payments for services, rent or goods between the LLC and you or a related company
- Expenses you pay personally on the LLC's behalf
In practice, almost every active LLC has at least one, which is why the filing is treated as yearly.
Deadlines and how to file
| Due date | April 15 for calendar-year LLCs (extension available with Form 7004) |
|---|---|
| What to send | Form 5472 plus a pro forma Form 1120 cover page |
| How | By fax or mail — foreign-owned disregarded entities cannot e-file this return |
| Records | Keep records supporting the reported transactions; failing to maintain them is also penalised |
Penalties
The base penalty is $25,000 per form per year, with an additional $25,000 for every 30 days the failure continues after an IRS notice. If you discover missed years, act before the IRS contacts you and work with a professional on penalty relief.
Who can file it for you?
| Option | Approx. cost | Notes |
|---|---|---|
| Independent accountant | $300–1,200/yr | Choose one experienced with foreign-owned LLCs |
| Firstbase tax add-on | $899/yr | Single-member LLC with non-US owner |
| doola Tax & Compliance | $1,999/yr | Includes bookkeeping and other filings |