Cross-Border US Tax Compliance

Cross-border US tax compliance for foreign-owned companies and US persons abroad

Cross-border rules are strict and the penalties are large, but the filings are manageable when handled early. We support non-US owners of US companies and US citizens or residents with foreign accounts, entities or income.

Filings we handle

• Form 5472 and pro forma Form 1120 for foreign-owned US companies. The penalty for missing it starts at $25,000 per form.
• FBAR (FinCEN Form 114) for foreign financial accounts above the $10,000 aggregate threshold
• Form 8938 (FATCA) for specified foreign financial assets
• Form 1040-NR and treaty claims for non-resident individuals
• ITIN applications where an individual tax number is needed
• Forms W-8 and W-9 and withholding questions on payments to and from the US

Missed filings in prior years?

Many founders discover requirements late. We reconstruct the facts, prepare delinquent returns and, where appropriate, support requests for penalty relief. Read about the process in our guide to late Form 5472 filings.

Why records matter

Cross-border forms depend on accurate records of owner contributions, loans, distributions and related-party payments. Our bookkeeping and compliance work together so the figures are ready when the deadline arrives.

Learn the rules

Start with our guides to Form 5472, the FBAR and the difference between ITIN, EIN and SSN.

What cross-border tax compliance means for US businesses

Cross-border compliance covers the US tax and reporting duties that arise when a business, its owners or its money cross a national border. It affects non-US founders who own US companies, US citizens and residents who own foreign companies or accounts, and US businesses that pay or receive money from abroad. The rules are spread across several agencies and forms, and the penalties for missing information returns are often far larger than the tax involved.

Most mistakes happen because each filing seems to belong to a different department. The foreign-owned LLC files with the IRS, the foreign bank account is reported to FinCEN, the foreign company may need its own IRS forms, and the owner's personal return must reflect all of it. We look at the whole picture and build one calendar, so nothing falls between the forms.

Foreign-owned US companies: Form 5472 and pro forma 1120

A US corporation that is at least 25% foreign-owned, and a foreign-owned US disregarded entity such as a single-member LLC, must report certain transactions with foreign owners and related parties on Form 5472. A single-member LLC with a foreign owner attaches the form to a pro forma Form 1120 and files it by the corporate due date, which is April 15 for a calendar-year company, unless an extension is filed with Form 7004.

Reportable transactions include capital contributions, loans, payments for services, royalties and expense reimbursements between the company and its owner. Even a company with no income can have a filing obligation if the owner contributed money. The penalty for failing to file, or for filing incomplete information, starts at $25,000 per form, and further penalties can apply if the IRS sends a notice and the problem is not fixed. We prepare the filing from your books, which is why accurate bookkeeping matters. Read the full explanation in our Form 5472 guide, and see late filing penalties if a deadline has passed.

FBAR and FATCA: reporting foreign financial accounts

A US person, meaning a citizen, resident or US entity, with a financial interest in or signature authority over foreign financial accounts must file FinCEN Form 114, known as the FBAR, if the combined value of those accounts exceeded $10,000 at any time during the year. It is filed electronically with FinCEN, not with the tax return. The due date is April 15, with an automatic extension to October 15.

FATCA is a separate regime. Eligible taxpayers whose specified foreign financial assets exceed thresholds that vary by filing status and residence must attach Form 8938 to their income tax return. A single person can have to file both an FBAR and a Form 8938 for the same accounts. Our FBAR guide explains who must file, what counts as an account and how to correct prior-year omissions.

US owners of foreign companies and partnerships

US persons who own foreign corporations or partnerships can have separate information returns, such as Form 5471 for certain foreign corporations and Form 8865 for certain foreign partnerships. These forms carry significant penalties for missing or incomplete filings. Ownership of a controlled foreign corporation can also bring income into the US return before it is distributed, depending on the facts.

Other forms may be relevant: Form 3520 for certain large gifts or inheritances from foreign persons and for foreign trusts, Form 8621 for passive foreign investment companies, and Form 8833 when you take a tax treaty position. We review your holdings, identify which forms apply and prepare them with the return.

Non-residents with US income: ECI, withholding and treaties

A non-resident individual or foreign company is generally taxed in the US on income effectively connected with a US trade or business, usually at graduated rates through Form 1040-NR or Form 1120. US-source fixed or determinable income, such as certain dividends, interest or royalties, is typically subject to 30% withholding at the source, which a tax treaty can reduce or eliminate if the payee provides the right form, commonly Form W-8BEN.

Many service providers who work entirely outside the US owe no US income tax on that income, but the answer depends on where the work is done and how the business is structured. Our article on whether non-residents pay US tax on LLC income explains the common scenarios. We analyse your facts, document the position and file what is required.

Tax residency: are you a US person?

Whether you are treated as a US tax resident depends on the green card test and the substantial presence test, which counts days in the US over a three-year period using a weighted formula. Some people are US residents under domestic law yet non-resident under a treaty tie-breaker. Residency can change during a year, which creates dual-status returns.

Because residency changes which forms and rates apply, we confirm it before preparing anything. If you are moving to or from the US, we plan the timing of income and elections so the transition is orderly.

Payments to and from abroad

US businesses that pay foreign contractors, vendors or royalty recipients may need to collect Form W-8BEN or W-8BEN-E, decide whether withholding applies and file Form 1042-S and Form 1042 where required. Payments for services performed outside the US are often not US-source, but the facts matter and the paperwork should be on file. We review payment flows, set a withholding procedure and keep your records audit-ready.

Payments received from abroad raise their own questions, such as currency conversion, sales tax or VAT in the customer's country, and platform reporting. We record foreign-currency transactions consistently so the books and the return agree.

Our cross-border compliance process

• Discovery: we map entities, owners, accounts, residency and cash flows.
• Form inventory: we list every filing that applies, with due dates and penalties.
• Data collection: you share statements and ownership records through a secure portal.
• Preparation and review: filings are prepared and reviewed by a second accountant.
• Filing and follow-up: we file, send proof of filing and handle IRS or FinCEN correspondence.
• Ongoing calendar: we keep a rolling schedule, including US tax deadlines.

If you have missed filings

Missed international filings are common and usually fixable. The right approach depends on whether the failure was reasonable cause, whether the IRS has already sent a notice and how many years are affected. Options may include filing late with a reasonable-cause statement or using an IRS compliance program. We assess your facts, explain the choices and prepare the filings. We are an accounting team, so where a matter needs legal representation we tell you and coordinate with your attorney.

Who needs cross-border support

Typical clients include non-US founders with a Delaware or Wyoming LLC, ecommerce sellers who sell into the US from abroad, consultants who bill US clients, US citizens living overseas, and investors who hold foreign accounts. If you are still choosing a structure, read how to form a US LLC as a non-resident, and for identification numbers see ITIN vs EIN vs SSN. Our company formation team can set up the entity correctly from the start.

Cross-border compliance FAQs

Do I have to file if my LLC earned nothing? A foreign-owned single-member LLC may still need Form 5472 if there were reportable transactions, such as capital contributions.

Is the FBAR filed with my tax return? No. It is filed separately and electronically with FinCEN.

Can a treaty eliminate US tax? A treaty can reduce or eliminate tax on some income, but you generally need to claim it with the correct forms.

How much does it cost? We quote a fixed fee after a review of your entities and accounts. To start, book a free consultation.

Common cross-border scenarios

A founder in India with a Delaware LLC selling online. The LLC needs an EIN, a registered agent, a US bank or payment account, bookkeeping and a yearly Form 5472 with a pro forma Form 1120. Sales tax in US states may also apply if the products are sold there, and income tax depends on whether the income is connected with a US trade or business.

A UK consultant billing US clients through an LLC. The key questions are where the work is performed, whether the LLC is a disregarded entity, how the UK treats the LLC and whether a treaty position is available. A US client may ask for Form W-8BEN or W-9 depending on how the business is classified.

A US citizen living abroad. US citizens are taxed on worldwide income wherever they live. They may use the foreign earned income exclusion or foreign tax credit, file FBARs for local bank accounts and report foreign companies they own. Late filing is common among new expatriates and is often correctable.

A US owner of a foreign company. Ownership may trigger Form 5471 and rules that tax certain foreign income currently. Careful entity planning before the foreign company is formed can prevent surprises.

Checklist: information we need

• Country of residence for every owner and the number of days spent in the US each year.
• Ownership percentages and dates of any changes.
• All transactions between the owners and the company, including capital contributions, loans and payments.
• Foreign bank, brokerage and payment accounts with maximum balances during the year.
• Contracts showing where services are performed and who the customers are.
• Prior-year US and foreign tax filings.

You do not have to know which form applies. We identify it from your answers.

Payment platforms, marketplaces and information reporting

Payment processors and marketplaces may issue information forms to US businesses and may ask foreign owners for a tax form to confirm status. Mismatches between platform statements and your books can cause delays or backup withholding. We reconcile platform payouts to your ledger so you can answer a platform's tax review with documents, and keep currency conversion consistent through the year.

Why international clients choose SMRK Global

Cross-border work fails when advice is split between people who never talk to each other. Our team handles the US entity filings, the owner reporting and the bookkeeping that feeds them, so every form uses the same numbers. We work across time zones, communicate by email, WhatsApp and video, and give you a calendar of every obligation with a named accountant responsible for each date. If you are starting out, read our guide on doing business in the US, then book a free consultation.