Registering a US LLC takes a day – that’s the easy part. What happens after forming a US LLC is where things actually go wrong. The EIN letter that never arrives. The bank application stuck in review for weeks. The tax form with a five-figure penalty that nobody mentioned when you paid for a formation package that “includes everything”.
A large share of the founders who contact us at Entity Inc are not asking about formation. They already formed, often with a cheap provider or by themselves, and they are stuck on something that happened afterward. This post walks through the three problems non-resident founders face most often in the first twelve months, in the order they usually hit them. Real support at each step could have avoided them.
Key takeaways
- Registration is a one-day event. The compliance and setup work in the following months determines whether your company actually functions.
- The IRS issues the CP575 EIN confirmation letter only once and does not re-issue it. If it goes missing, the replacement is a 147C letter, which requires calling the IRS.
- Most bank account rejections trace back to document mismatches created at formation, not to the bank being difficult.
- A foreign-owned single-member LLC must file Form 5472 every year, even with zero revenue.The penalty for missing or wrong forms starts at $25,000.
Setting up a US company and want it done right from the start? Entity Inc. handles formation and everything that comes after.
Registering the company was the easy part
Search any founder community and you will find the same post, over and over: “Just formed my LLC, now what?” It is usually written by someone who paid between $25 and $400 to a formation gig or an automated platform, received a state certificate and an EIN, and then heard nothing more.
The harsh reality is that low-cost formation services are built to file paperwork, not to get you fully operational. The filing itself is genuinely simple, which is why it can be sold so cheaply. Everything that is not simple comes afterward: proving your EIN to a bank, meeting IRS filing obligations you were never told about, and keeping the company in good standing with the state.
Support after registration is not a luxury add-on. It is the difference between a company that works and a certificate in a drawer.
Here are the three walls founders hit, in the order they hit them.
1. How do non-residents get an EIN and the EIN letter?
Non-residents get an EIN by faxing Form SS-4 to the IRS, because the online application requires an SSN or ITIN. The IRS assigns the number within days to weeks. The EIN confirmation letter that proves it can take far longer, or never arrive at all.
The problem is that the EIN number is only half of what you need. The document that proves the number, the official EIN letter, is what banks want to see.
What is a CP575 letter and why do banks ask for it?
The CP575 is the confirmation letter the IRS sends when it first assigns your EIN. Banks and payment platforms ask for it to verify that your EIN matches your legal entity name. The IRS issues it only once, and it does not reprint or email it. But it does issue a substitute EIN verification letter (Form 147C).
CP575:
The one-time notice the IRS mails to confirm your newly assigned EIN. It shows your legal business name, your EIN, and your entity classification, and it is never reissued.
Here is where it goes wrong for non-residents. The IRS mails the CP575 to the address on your SS-4, which for most international founders is a registered agent address or a virtual mailbox managed by the formation service. If nobody is monitoring that mailbox, or the service does not forward mail, the letter simply vanishes.
A recurring story in LLC formation forums: a founder receives the EIN over the phone, is told the letter will arrive by mail in around 20 days. But months later he or she still has nothing, with a bank application waiting on it.
What to do if you don’t have your EIN letter?
The IRS does not re-issue the original EIN letter CP575, so you have to request a replacement, which is called a 147C letter. The IRS letter 147C acts as official replacement verification of your EIN.
147C letter:
An IRS-issued verification letter that confirms your EIN and entity details. It i is the only replacement for a CP575 and can only be requested by phone.
Banks, payment processors, and state agencies accept a 147C letter as equal proof of your business identity and EIN.
How do you get a 147C letter if your CP575 never arrived?
The only way to get a 147 C letter is to call the IRS Business and Specialty Tax Line. There is no online request, and there is no email delivery.
For a non-resident, that means calling a US number during IRS business hours in your time zone’s least convenient window, sitting through hold times that commonly run 30 to 60 minutes, and passing identity verification as the responsible party.
If English is not your first language, or if the person who applied for your EIN listed themselves instead of you, this call gets harder or impossible.
CP575 vs 147C – Your EIN letter explained
| CP575 | 147C | |
|---|---|---|
| What it is | Original EIN confirmation letter | Replacement EIN verification letter |
| When you get it | Issued once, automatically, when the EIN is first assigned | Only when you request it after losing or never receiving the CP575 |
| How it’s delivered | Mailed to the address on Form SS-4 (instant PDF only via the online application, which requires an SSN or ITIN) | Mailed or faxed, never emailed |
| Can it be reissued? | No, the IRS issues it exactly once | Yes, can be requested again if needed |
| How to request | No request needed, but no way to get another copy | Phone only: IRS Business and Specialty Tax Line, requested by the responsible party |
| Typical wait | Around 2 to 4 weeks by mail after EIN assignment | 30 to 60 minute hold, then days to weeks for mail or fax delivery |
| Accepted by banks? | Yes | Yes, treated as equivalent proof of EIN |
2. Why do US banks reject non-resident LLC applications?
Most bank and fintech rejections for non-resident LLCs are not banking problems. They are document problems that were created weeks earlier, at formation, and only surface when a compliance analyst compares your paperwork.
US banks and platforms like Mercury, Relay and Wise operate under strict KYC rules. Their review is largely a matching exercise, and any mismatch can stall or sink an application:
| Rejection trigger | What causes it | Who could have caught it |
|---|---|---|
| Entity name mismatch | Name on the application differs from the Articles of Organization or CP575, even by one character | Anyone reviewing the documents side by side before submission |
| Personal name mismatch | Passport transliteration differs from LLC documents (Mohammad vs Mohammed) | A specialist checking documents against your passport at formation |
| Missing EIN documentation | CP575 never arrived, no 147C requested yet | A provider that monitors the EIN mail and secures the letter |
| Address flags | Registered agent address entered as the business address | A specialist who knows what each bank accepts |
| Vague business description | “Consulting” with no verifiable detail or web presence | Guidance on how banking compliance teams actually read applications |
The address point needs one clarification, because founders get conflicting advice. For state compliance, your registered agent’s address is usually sufficient. Banks are a different audience: several fintechs flag applications that list the registered agent address as the principal business address.
Knowing which rule applies where is exactly the kind of thing a sleek dashboard doesn’t tell you.
Getting this wrong can cost a foreign founder months of chasing bank account openings. Founder communities are full of the same spiral, paraphrased: applied to Mercury, sat “under review” for weeks, denied. Tried Wise, denied. Tried Relay, resubmitted documents, another month gone.
Each rejection cycle adds weeks, and in bad cases founders report going half a year from formation to actually accepting payments. And approval is not the finish line: follow-up KYC requests a few weeks after the account opens are common once real activity starts.
To be clear about what support can and cannot do here: no provider can open a US bank account for you, and nobody can guarantee approval. That decision belongs to the bank.
What preparation and experienced review does is remove the avoidable declines, which are most of them. We walk founders through choosing the right bank or payment platform for their situation, and we check that the EIN letter, company documents and application details line up before anything is submitted.
The goal of a bank application is to be boring. A boring application has documents that match character for character, the right type of address in the correct field, a specific business description and a consistent footprint.
— Vincenzo Villamena, CPA — CEO at Entity Inc.
Founders often come to us after two rejections, only to find out the issue usually was a simple mismatch. It’s important to fix the mismatches to resolve the issue before reapplying rather than burning the one chance some platforms give you.
3. What is Form 5472, and why does it apply even with zero income?
Every foreign-owned single-member US LLC must file Form 5472, attached to a pro forma Form 1120, every year. This applies even if the LLC earned nothing, because the filing trigger is reportable transactions, not income. The penalty for not filing, or filing incorrectly, starts at $25,000 per form, per year.
Form 5472:
An annual IRS information return that discloses transactions between a US company and its foreign owner or other related parties. For foreign-owned single-member LLCs it is filed with a pro forma Form 1120.
A common misconception is “no income, no filing”. But a reportable transaction doesn’t require income. It is any financial flow between you and your LLC. For example:
- Your initial capital contribution
- The formation fee you paid on the company’s behalf
- A reimbursement.
- A payment to a family member or other related party.
In practice, almost every foreign-owned LLC has reportable transactions in year one, because forming the company creates them.
Form 5472 is an information return. The IRS is penalizing the failure to disclose, not an unpaid tax. Fortunately, the penalty is typically assessed after an IRS notice rather than automatically on the deadline. We cover this in more detail in our post on what to do after a missed US tax deadline.
Filing late voluntarily before a notice arrives puts you in a far better position. Waiting for the notice is not a strategy, because once it arrives, a 90-day clock starts. Missing it adds another $25,000 for each further 30-day period.
We regularly receive inquiries at Entity Inc. from founders dealing with late filings who tell us the same thing: their formation provider never mentioned the requirement. They found out from Reddit, from an AI chatbot, or from an IRS notice. I will also correct something stated wrongly all over the internet: first-time penalty abatement does not apply to Form 5472. The realistic relief path is a reasonable cause statement.
— Vincenzo Villamena, CPA — CEO at Entity Inc.
This is why we build tax into formation from day one. The same team that forms your company understands the filing obligations. When tax season arrives, tax experts prepare and review the return. Ask any provider you are considering one question: who signs the return?
One more practical layer. Form 5472 reports the transactions between you and your LLC, which means the filing is only as good as your records. You don’t want to reconstruct your books from memory in April, potentially missing reportable transactions. Clean books through the year make the filing accurate and defensible, which is why we pair the two in our 5472 and bookkeeping bundle.
Already formed elsewhere and worried about your filings? Entity Inc. regularly takes over tax compliance for companies formed with other providers.
What ongoing compliance does a US LLC have every year?
Every US LLC has recurring obligations beyond federal tax filings: a state annual report or franchise tax, registered agent renewal. None of them are difficult, but all of them are essential to keep you US company in good standing.
- State annual reports and franchise taxes. Every state has its own renewal filing and fee. Miss it and the company falls out of good standing, which banks and payment platforms can detect.
- Registered agent renewals. First-year agent service is often included in formation packages, then auto-renews at a higher price or lapses. An LLC without a registered agent can be administratively dissolved.
- Unread official mail. State notices and IRS letters go to the registered agent or a virtual mailbox. If nobody forwards them, you might not hear about an issue before deadlines have passed.
- BOI reporting confusion. Beneficial ownership reporting rules changed substantially in 2025, and outdated advice is everywhere online. US-formed companies, even when owned by foreigners, don’t have any BOI filing requirements. BOI applies only if your company was formed in another country and registered to do business in the US.
None of these are complicated. But all require that someone is watching a calendar and a mailbox. The question is who.
What should an LLC formation service include after registration?
A good formation service should cover five things after registration: EIN documentation delivered into your hands (not just the EIN number via email), a bank application reviewed before submission, a tax filing calendar with licensed preparers behind it, clean books throughout the year, and a human who answers. Here is what each means in practice, mapped to the failures above:
- An EIN applied for correctly, with you as the responsible party, and the CP575 EIN letter delivered to a monitored address so you actually receive it.
- A bank application reviewed before submission, with documents cross-checked so the bank review doesn’t become a stumbling block.
- A filing calendar built at formation, so Form 5472, the annual report and any state obligations are scheduled before they are urgent, and prepared by experienced professionals when due.
- Books kept clean through the year, so tax filings are accurate and deductions are captured.
- A human who answers, so that when something unexpected arrives in the mail, you forward it to someone whose job is to know what it means.
Some founders genuinely do not need all of this. If you are confident in managing US compliance yourself, a budget provider plus your own diligence is a legitimate setup.
If you are comparing LLC formation providers on exactly this question, we have broken down what ten formation services actually include, and a detailed head-to-head of the most popular options, with honest notes on where we are not the right fit.
But if you would rather never learn what a 147C letter is from a position of panic, that is what full-service support is for.
FAQ
What is a CP575 letter and can I get a copy if I lost it?
The CP575 is the one-time confirmation letter the IRS mails when it assigns your EIN. The IRS does not reissue it. If it is lost or never arrived, the replacement is a 147C letter, which you request by calling the IRS Business and Specialty Tax Line.
How do non-residents get an EIN without an SSN?
They need to fax Form SS-4 to the IRS. The online EIN application is not available without an SSN or ITIN. Fax applications typically take days to weeks, so plan bank applications accordingly.
Do I need to file anything with the IRS if my LLC made no money?
Almost certainly yes. A foreign-owned single-member LLC must file Form 5472 with a pro forma Form 1120 whenever it has reportable transactions with its owner, and capital contributions and owner-paid expenses count. Income is not the trigger. The penalty for not filing is steep, starting at $25,000.
Why was my Mercury or other bank application rejected?
Most rejections trace back to document mismatches: an entity name that differs between your Articles and your application, a personal name that differs from your passport, a registered agent address used as your business address, or missing EIN documentation. Fix the underlying document issue before reapplying, and contact the platform’s support first, since some auto-reject repeat applications.
What is a 147C letter and how do I request one?
A 147C is the IRS verification letter that replaces a lost CP575 and confirms your EIN, entity name and classification. It can only be requested by phone, by the responsible party, during IRS business hours, and the IRS will mail or fax it rather than email it.
What ongoing filings does a non-resident-owned LLC have every year?
At minimum: Form 5472 with a pro forma 1120 (due April 15 for single-member LLCs), a state annual report or franchise tax filing, and registered agent renewal. Depending on your situation, an FBAR, state taxes or beneficial ownership reporting may also apply.
Formation is the first step of a longer process. See how Entity Inc. supports founders through all of it, from registration to tax season.
One team for formation, compliance, and tax.