Who needs to file
A US LLC with a single owner who is not a US person is treated as a disregarded entity for income tax, but for this reporting rule it is treated like a domestic corporation. Each year it has reportable transactions, it must file a pro forma Form 1120 with Form 5472 attached.
What counts as a reportable transaction
- Capital contributions from the owner
- Loans between the owner and the LLC
- Distributions to the owner
- Payments for services, rent or royalties between the LLC and the owner or related parties
Deadline and penalty
The form is generally due on the 15th day of the fourth month after the end of the tax year, which is April 15 for calendar-year companies. An extension is available with Form 7004. The IRS penalty for failing to file is $25,000 per form, per year, with more possible if the problem continues after notice.
What goes on the form, step by step
- Prepare a pro forma Form 1120. A foreign-owned disregarded LLC completes only the identifying information on the first page of Form 1120, marks it as a pro forma return as the Form 5472 instructions explain, and attaches Form 5472.
- Complete Form 5472. Part I identifies the reporting corporation (your LLC, with its EIN), Part II identifies the 25% foreign shareholder, and Part III identifies the related party that the transactions are with. Part IV lists the monetary transactions by type, such as contributions, loans and distributions, and Part V covers any non-monetary or other transactions.
- File by the due date. Follow the current filing instructions on the IRS website for where and how to submit, because filing methods have changed in recent years.
Example: a typical year
A non-US founder owns a Delaware LLC that sells software subscriptions to customers worldwide. During the year the founder wires $20,000 into the LLC's US bank account and withdraws $5,000 for personal use. Even though the LLC owes no US income tax, those two items are reportable transactions, so Form 5472 and a pro forma Form 1120 must be filed for that year.
Common mistakes
- Assuming "no income" means "no filing"
- Leaving out owner loans and contributions made earlier in the year
- Using the owner's personal tax ID instead of the LLC's EIN
- Missing the deadline and assuming a Form 7004 extension is automatic (it must be filed)
If you have already missed a year, read what to do about late Form 5472 filings.
How to stay on track
- Keep a separate US bank account for the LLC
- Record every owner transaction as it happens
- Have your books closed monthly so the year-end figures are ready
Related services: US tax preparation, cross-border tax compliance and bookkeeping services.
Frequently asked questions
Who must file Form 5472?
US corporations and foreign-owned US disregarded entities, such as a single-member LLC owned by a non-US person, that have reportable transactions with a foreign owner or related party.
When is Form 5472 due?
The 15th day of the fourth month after the tax year ends, which is April 15 for calendar-year companies, with a six-month extension available using Form 7004.
What is the penalty for missing Form 5472?
$25,000 per form, per year, with further penalties if the failure continues after an IRS notice.
Keep reading
Understanding the 25% foreign-ownership and related-party rules
Form 5472 applies when a reporting corporation has a foreign shareholder who directly or indirectly owns at least 25% of the voting power or value, or when a foreign-owned US disregarded entity has a foreign owner. A related party can also include an entity under common control and certain family relationships. The form is about transactions, so even an inactive company can have a filing duty if money moved between the owner and the company.
A single-member LLC with a foreign owner is a common case. For income tax it is disregarded, but for this reporting purpose it is treated as a domestic corporation separate from its owner, which is why the form and the pro forma return exist.
How the pro forma Form 1120 works
The pro forma Form 1120 is a shell return. For a foreign-owned disregarded LLC, you complete only the identifying information at the top, such as name, EIN, address and date of formation, write "Foreign-owned U.S. DE" at the top, and attach Form 5472. You do not report income and deductions on the return itself in this situation. Where the company is actually a corporation or elected corporate treatment, a full Form 1120 is prepared instead.
Filing method and timing
The IRS has changed how and where this return may be submitted over time, and electronic filing options have been developing. Because the rules affect whether a filing is treated as made on time, we confirm the current method before every deadline and keep proof of submission. The due date is generally the 15th day of the fourth month after year end, April 15 for a calendar-year company, and an extension is available with Form 7004.
Reasonable cause relief and penalty abatement
The IRS may remove a penalty when a taxpayer shows reasonable cause and acted in good faith. Evidence can include that the failure resulted from a mistaken but reasonable understanding of the rules, that records were not available despite effort or that the filing was made promptly once the issue was found. The request needs a written statement and facts. We prepare the statement and attach support, though relief is never guaranteed. Learn more at late filing penalties.
Changes of ownership, dissolution and multiple years
If ownership changes, the new owner's information must be reported from the change date. If the LLC is closed, a final filing may still be required for the year of closure. When several years are missing, we prepare each year separately with consistent figures and discuss the best way to submit them. Our cross-border team coordinates these steps with FBAR and personal tax reporting.
How SMRK Global helps with Form 5472
We review your formation documents and ledger, confirm whether the filing applies, prepare the form and pro forma return, get a second review and file with proof. We then add the next deadline to your calendar. If you are still deciding on a structure, our non-resident LLC guide explains the filing consequences before you form. Book a free consultation to get started.
Three worked examples
Founder contributes capital. A non-resident owns a single-member Delaware LLC that sells online. In the year she transfers money from her foreign account to fund inventory and pays herself back part of it. Both the contribution and the repayment are reportable, even if the LLC reports no profit. The filing is a Form 5472 attached to a pro forma Form 1120.
Owner pays company expenses personally. A founder pays software subscriptions for the LLC with his personal card. The reimbursements or the amounts treated as capital contributions need to be tracked and reported, and the books should show them clearly.
Dormant LLC. An LLC formed in the year has no revenue and the owner paid state fees personally. A filing may still be required for those transactions. Dormant does not always mean exempt, so each year needs a review.
Setting up your books to make Form 5472 simple
The easiest way to prepare Form 5472 is to record every owner transaction as it happens. Use separate ledger accounts for owner contributions, owner loans and owner distributions, and never leave owner activity in a general expense category. Keep a short note for each entry that identifies the date, amount, currency and purpose. At year end, the totals feed directly into the form. Our bookkeeping service sets up these accounts from the start, which also supports the owner's own tax reporting and any bank due diligence.
Form 7004 and extensions
A company can request an automatic extension with Form 7004, which extends the time to file the pro forma return and attached Form 5472 for a limited period. An extension does not change the information required, and it does not remove interest on tax that is due. Since many Form 5472 filers owe no income tax, the main benefit is time to complete the documents correctly. File the extension before the original due date.
How Form 5472 fits with your other US obligations
- State filings: annual reports, franchise tax and any state income tax returns remain separate.
- Sales tax: if you sell goods into states with economic nexus, registrations and returns may be required.
- Payroll: hiring US employees adds federal and state employer filings, see payroll services.
- FBAR and FATCA: these apply to US persons with foreign accounts and generally not to a non-resident alien owner, see our FBAR guide.
- Owner tax return: a non-resident owner may still need a Form 1040-NR if the LLC has income connected with a US business.
Pre-filing checklist
- Confirm the entity type and tax classification in the state record and IRS records.
- Identify every owner and any related parties.
- Reconcile all bank accounts and the owner ledger.
- List each reportable transaction with date, amount and type.
- Check currency conversion consistency.
- Confirm the correct filing method and keep proof of submission.
A few minutes spent on this list prevents most rejections and penalty notices.
Additional frequently asked questions
Does a Form 5472 filing mean I owe US tax? No. The form is informational. Whether you owe income tax depends on whether you have income connected with a US trade or business.
Can my LLC owner be a company? Yes. If the owner is a foreign corporation, the reporting rules still apply, and ownership chains need to be documented.
Can I fix an old missing filing? Often yes, with reasonable-cause relief and complete returns for each year. Speak to us early at our consultation page.
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