Form 5472 for foreign-owned LLCs: The complete 2026 guide to IRS compliance

Form 5472 is an information return that the IRS requires to collect details about transactions between a US entity and its foreign owner or related parties. Foreign-owned single-member LLCs must file this form every year, even when they have no income. The penalties for not filing are steep: $25,000 per year.

If you’re a non-US founder, this form is essential to keep your LLC in US tax compliance.

This guide breaks down everything you need to know about Form 5472 for foreign-owned single-member LLCs: what it is, who must file, the filing steps, deadlines, and common mistakes to avoid.

Not sure if Form 5472 applies to you? Contact us and we’ll help you figure it out.

What is IRS Form 5472?

IRS Form 5472 is an information return that you use to report transactions between your US LLC and yourself as a foreign owner (or your “related parties”). 

An information return is a report that contains information about a taxpayer or their company.  But it does not create a tax liability – so you don’t need to pay any taxes based on this form.

Only specific transactions need to be reported, so-called “reportable transactions”. Those are transactions that occur between the US LLC and the foreign owner or any party related to the LLC owner. 

We’ll explain both concepts, “reportable transactions” and “related parties”, in detail below and give examples.

Do you pay tax in your home country?

A US LLC with no US tax bill can still be fully taxable where you live, because most countries tax their residents on worldwide income. Form 5472 is a US reporting obligation and has no effect on what you owe at home.

This catches founders who read “no US tax” and stop there. Tax treaties and foreign tax credits change the outcome case by case, so check with a tax advisor in your country of residence before treating the profits as tax-free. For the separate question of when your LLC does owe US tax, see our guide to the taxation of foreign-owned single-member LLCs.

Who must file Form 5472?

The 5472 form is not only for foreign-owned LLCs. Any US company with at least 25% foreign ownership may need to file, including C corporations and multi-member LLCs that elected to be taxed as corporations.

• Foreign-owned single-member LLC (100% foreign ownership)
• C Corporation with 25% or more of the share controlled by non-US shareholders
• Multi-member LLC that elected to be taxed as corporation and have at least 25% foreign ownership

How is foreign ownership determined?

The IRS counts foreign ownership in three ways for Form 5472: direct, indirect, and constructive. All three count toward the 25% threshold, and one person can hold all three types at the same time.

Direct ownership: You own part or all of the US company in your own name.

Indirect ownership: You own the US company through another entity, such as a foreign holding company or a second LLC that holds the membership interest.

Constructive ownership: The IRS treats you as an owner because of your relationship to an actual owner, most commonly a family member.

Constructive ownership is the one that surprises people. For the 25% test, family attribution generally covers your spouse, children, grandchildren, and parents. So a US C corporation with five shareholders at 20% each may look like it has no 25% shareholder. If two of those shareholders are a married couple, the IRS generally treats each of them as owning 40%. This means the company has a filing obligation.

Note that ownership rules and related party rules are not the same. The attribution rules for the 25% ownership test are generally narrower than the definition of a related party, which reaches further and can include siblings. A sibling may therefore be a related party whose transactions you report, without being counted toward the 25% test. This is worth confirming with a cross-border tax professional if your structure involves family members.

Constructive ownership is where I see the most expensive mistakes. Founders look at the cap table, see no single foreign shareholder above 25%, and conclude there is nothing to file. The IRS does not look at the cap table alone. It looks at who is related to whom. If your US company has foreign shareholders who are married to each other, or a parent and child on the same cap table, add their percentages together before you decide you are exempt. A wrong answer can have a $25,000 penalty.

— Vincenzo Villamena, CPA — CEO at Entity Inc.

While all those must file Form 5472, the way they file it differs substantially. This article will briefly cover all filing situations and then focus on single-member LLCs.

Single-member LLC owned by a non-US person or company

This is the most common scenario for foreign founders. 

If you formed a US LLC with only one owner, and that owner is not a US citizen or resident, your company is considered a foreign-owned single-member LLC.

A foreign-owned single-member LLC must file each year, even if your LLC has no income or no US clients.

Form 5472 cannot be filed alone; it must be filed together with another IRS form, that is filled out in a specific way.

US tax forms for a single-member LLCs with foreign owner:

• IRS Form 5472
• Pro forma Form 1120

If your LLC has any “effectively connected income” (ECI), you will need to file additional tax forms and may need to pay US taxes. See our guide to the taxation of foreign-owned single-member LLCs for a deep-dive into this topic.

Multi-member LLCs with foreign members

When your LLC has two or more owners, it’s typically taxed as a partnership. Form 5472 only applies to corporations, not to partnerships. So, unless the LLC elected to be taxed as a corporation, it does not file 5472.

US partnership tax filing requirements:

• Form 1065 (partnership return)
• Schedule K-1 for each partner
• Form 8805 for foreign partner withholding

If your multi-member LLC includes both US and non-US members, you may need to file additional IRS forms.

C Corporations owned by foreign individuals or companies

If your US entity is a C Corporation and 25% or more of it is owned by a foreign person or company, you must also file Form 5472.

Filing requirements include:

• Form 1120 corporate income tax return
• Form 5472 

IRS Form 5472 filing requirements by entity type

Here’s a quick summary of which entity types must file 5472:

Entity Type	Foreign ownership	Form 5472 Required?	Typical Tax Return
Single-member LLC with non-US owner	100%		Pro forma 1120 + 5472
Multi-member LLC (foreign + US members)	Partial or full		Form 1065 + K-1s
C Corporation with ≥25% foreign ownership	Partial or full		Form 1120 + 5472

Need help with your reporting requirements? Our experienced team has worked with founders globally to keep them US tax compliant. 

As you can see, form 5472 never stands alone — it’s always filed together with Form 1120. How you fill out Form 1120 depends on your business type. It’s different for a single-member LLC than for a C Corp.

Pro forma Form 1120 for single-member foreign-owned LLCs

If you own a US LLC with one foreign owner, the IRS treats your company as a “disregarded entity” for tax purposes — meaning it’s ignored for income tax but not for reporting obligations.

To report to the IRS each year, you must:

1. Prepare a pro forma Form 1120 (basically, the first page of a corporate tax return form, used only as a cover sheet, and
2. Attach Form 5472, which reports transactions between your LLC and you (the foreign owner) or other related parties.

Think of Form 1120 here as the envelope, and Form 5472 as the letter inside it.

What to include:

• Basic company info on Form 1120 (LLC name, address, EIN)
• “Foreign-Owned U.S. Disregarded Entity” written across the top
• Completed Form 5472 attached behind it

Multi-member LLCs: No Form 1120

If your US LLC has two or more members, it’s usually treated as a partnership for tax purposes. In that case:

• You don’t file Forms 5472 and 1120
• Instead, you file Form 1065 (partnership return) and provide each member a Schedule K-1

However, if your multi-member LLC chose to be taxed as a corporation (by filing Form 8832), then the corporate rules apply — meaning Form 5472 + Form 1120 may be required. (See below.)

Form 1120 for foreign-owned C corporations

If your company is a US C corporation that is 25% or more foreign-owned, you must also file Form 5472 — but here, it’s filed as part of your corporate income tax return.

The C corporation files a full Form 1120, not a pro forma one. The filing includes:

• Form 5472 for each foreign owner or related party
• Form 1120 standard corporate income return and expense schedules

Required tax forms by entity type

Here’s a quick overview of required tax forms:

Entity Type	Which 1120 to File	Attach Form 5472?	Notes
Single-member foreign-owned LLC	Pro forma Form 1120		Required even if no income
Multi-member LLC taxed as partnership	Form 1065		Not required unless taxed as corp
Foreign-owned C corporation	Full Form 1120		Required for ≥25% foreign ownership

What is a “Reportable Transaction”

The IRS wants visibility into any movement of money or value between a US company and its foreign owner (or other related foreign parties). That’s what Form 5472 captures — even if there’s no profit, invoice, or customer involved.

Below are examples of “reportable transactions” for different business types.

Which transactions does the IRS count as reportable?

The IRS defines reportable transactions broadly and groups them into categories on the form itself, including sales, rents, royalties, interest, commissions, remuneration, capital contributions, capital reductions, loans, and the use of US company property by a foreign related party.

Most founders think of the obvious ones: money in, money out, loans, and reimbursements. The table further down this section covers those with worked examples. The categories below are the ones founders rarely think about:

• Rents and royalties paid or received
• Commissions and remuneration, such as payments for services performed by a foreign related party
• Sales and purchases of goods, property, or services between the company and a related party
• Capital reductions, not just contributions
• The use of US company property by a foreign owner or related party, such as a vehicle, equipment, or real estate
• Amounts paid or received in connection with the formation, dissolution, acquisition, or disposition of the entity

That second-to-last one catches people. If your US LLC owns a laptop, a camera, a vehicle, or an apartment, and you or a related party use it, that use is generally reportable even though no money moved and nothing appears on the bank statement. Founders who reconstruct their year from bank transactions alone will miss it every time.

This is also the reason why our bookkeeping team doesn’t rely on bank statements alone to identify your reportable transactions. They will ask you specific questions to capture transactions that happen outside of your bank accounts.

Not sure which of your transactions are reportable?

This is where most 5472 filings go wrong. Our in-house bookkeepers review your bank statements, identify every reportable transaction, and hand them straight to the tax team that prepares your form. You send statements and fill in one questionnaire; we do the rest.

Our 5472 + Bookkeeping bundle combines year-end bookkeeping with your Form 5472 filing for less than buying both separately. Built for service-based businesses: consultants, developers, marketers, coaches. If you sell physical products or have higher transaction volume, ongoing bookkeeping is the better fit.

Is there a minimum amount for a reportable transaction?

There is no minimum or maximum value for Form 5472 reporting. A $50 registered agent fee paid from your personal account is a reportable transaction, in the same way a $500,000 capital contribution is.

There is no de minimis threshold to fall under, which is the opposite of how most tax rules work. If value moved between the company and a foreign related party, it belongs on the form, whatever the size.

Reportable transactions for single-member foreign-owned LLCs

Any time money or property flows between a US LLC and the non-US owner, or any parties related to the owner, it must be disclosed. That includes funding the company, paying yourself back, or covering expenses from a personal account.

Example	Reportable?	Notes
You pay the LLC registration fee and other incorporation expense from your personal account		Registration
You wire $5 000 from your foreign account to the LLC bank account		Capital contribution
You pay a vendor personally and get reimbursed by the LLC		Owner reimbursement
You pay yourself from your LLC		Owner distribution
You loan the LLC money or the LLC loans you money		Must report amount and terms
LLC pays a US-based contractor		Not a foreign related-party

Zero-transaction myth: Even if your LLC never made a dollar, you must still file Form 5472 each year with reportable transactions. 

Important: Form 5472 must always be filed in the year of formation. The owner paid with their personal fund for LLC formation, and that is considered a capital contribution. 

How to track and document your reportable transactions

To make filing easier and avoid mistakes:

1. Keep a separate business bank account for US operations.
2. Record every transfer between yourself (or your foreign company) and the US entity.
3. Note currency conversion rates used.
4. Keep receipts and agreements for at least five years in case the IRS asks for proof.

Our team of inhouse bookkeepers can identify reportable transactions for you and work directly with the tax team to prepare Form 5472. Learn more about bookkeeping for a foreign-owned US LLC.

Understanding “Related Parties” for Form 5472

The IRS doesn’t just want to know about transactions between your US entity and you as the foreign owner — it also wants details about any “related parties.”

Note that the IRS looks at control, not just ownership. If you or your company can influence both sides of a transaction, the foreign party is probably “related.”

If your LLC sends or receives money from any of these parties, those transactions are reportable on Form 5472.

Examples of related parties

Under IRS rules, a related party can include:

Relationship	Description	Example
Foreign owner	The non-US person or company that owns your US LLC or C corp	You personally, if you own 100% of the LLC
Foreign parent company	A company abroad that owns your US entity	A Singapore company owns a US Delaware C corp
Foreign subsidiary or affiliate	A foreign company your US entity owns or controls	Your US LLC owns 60% of a UK startup
Same owner’s other company	Another business controlled by the same foreign owner	You own a UK company and a US LLC — they transact
Immediate family members	Spouse, parents, children, siblings who own or control related entities	Your spouse owns a Hong Kong company that pays your US LLC
Foreign partnership or trust	Foreign structures owned or controlled by the same person	Your foreign holding company or trust transfers funds to your US entity

Common examples of related party transactions

One of the most common mistakes foreign owners of US LLCs make is overlooking transactions of the LLC with related parties. This is especially true when those transactions don’t show up in your LLC’s bank statement.

Examples:

• You send startup capital from your personal foreign account to your US LLC.
• Your US LLC pays your spouse’s foreign design company for work.
• You have a foreign company that reimburses your US entity for shared expenses.
• Your brother pays the LLC’s registered agent fee on your behalf.

The last example shows how “hidden” related party transactions can be. Even if the related party does not get reimbursed for payments made on behalf of the LLC, the transaction must be reported.

Properly identifying related parties helps you:

• Avoid incomplete filings or mismatched records
• Justify intercompany payments (e.g., service fees, reimbursements)
• Reduce the risk of penalties or audits

Need help with this? Our experienced team of bookkeepers and tax specialists will identify reportable transactions in your bank statements and ask specific questions (via a questionnaire) to identify other reportable transactions that are not made through your LLC bank account.

What information do you report on Form 5472?

Form 5472 has nine parts, and reportable transactions are only one of them. The form also asks for the foreign owner’s details, where the business is conducted, the type of business activity, amounts connected to the formation or dissolution of the entity, and the total value of the company’s assets at the end of the tax year.

Here is what you need to have ready before you start:

1. Foreign shareholder details: full legal name, address, country of citizenship or organization, and the tax identification number issued in the owner’s home country, if one exists.
2. Where the business is conducted: the country or countries where the company actually operates, which is often not the state of formation.
3. Type of business activity: a plain description plus the IRS principal business activity code.
4. Related party details: the same identifying information for every related party the company transacted with during the year.
5. Monetary transactions with the foreign related party: reported in Part IV.
6. Amounts connected to formation, dissolution, acquisition, or disposition: reported in Part V, which is where a foreign-owned disregarded entity reports its capital contributions and distributions.
7. Year-end asset value: the total value of the company’s assets on the last day of the tax year.

What is Part V of Form 5472?

Part V is the section where a foreign-owned US disregarded entity reports amounts paid or received in connection with the formation, dissolution, acquisition, or disposition of the entity. For most single-member LLCs, this is where the money you put in and the money you took out gets reported.

If you funded your LLC from a personal foreign account, paid the state filing fee yourself, or took a distribution during the year, Part V is generally where those amounts land. Skipping it is one of the quieter ways a filing becomes incomplete, and the IRS treats a substantially incomplete form the same way it treats a missing one.

How do you calculate the year-end asset value?

The year-end asset value is the total value of everything the company owns on the last day of its tax year. For a typical single-member LLC, that means the closing balance of the US business bank account, plus inventory, equipment, receivables, and any prepaid amounts the company holds.

This is a real filing step, not a formality. This is the point where the quality of your books decides how long your filing takes. With clean monthly records, the number is quick to look up. Without them, someone has to rebuild twelve months of activity from statements and screenshots, usually in April. 

Clean books mean every deduction gets claimed, which lowers taxable income if your LLC has US tax exposure, and they give you something defensible if the IRS ever asks. Our in-house bookkeepers prepare these numbers as part of the 5472 workflow. 

Step-by-step filing guide for IRS Form 5472

Step 1: Obtain an EIN

You need an Employer Identification Number (EIN) from the IRS to file Form 5472 —even if you have no employees. (Our incorporation package includes obtaining the EIN.)

Step 2: Complete Form 5472

• Fill out LLC details and foreign owner information.
• Report each type of transaction.
• Leave unused sections blank (not “0”).

Step 3: Prepare Pro Forma 1120 for single-member LLCs

• Basic entity info only (name, address, EIN).
• Write “Foreign-Owned U.S. Disregarded Entity” across the top.
• Attach Form 5472.

Step 4: File with the IRS

Send both forms by fax or mail to the IRS Ogden address. Keep a copy for five years.

Need help? Entity Inc. can file Form 5472 for you and ensure IRS compliance.

Form 5472 due dates, extensions & penalties

Your 5472 filing is due on April 15 but you can request an extension until October 15. Don’t miss the deadline as late filing penalties can be very steep. The penalty is not only for late filings. Incorrect filing information can also trigger it.

Event	Date	Form
Standard Deadline	April 15 (after year-end)	5472 + 1120
Extended Deadline	October 15 (request with Form 7004)	5472 + 1120
Late Filing Penalty	$25,000 per year, per form	Increases after 90 days

How much is the Form 5472 penalty?

The Form 5472 penalty is $25,000 per year, per form. A company that files one form for each of three foreign related parties is looking at up to $75,000 of exposure for a single missed year, not $25,000. 

Fortunately, the penalty is not assessed automatically. But waiting for an IRS notice before catching up on missed deadlines is not a good strategy.

Three more things worth knowing about the penalty:

• It applies to incorrect or substantially incomplete filings, not just missing ones.
• It applies to failure to maintain the records the IRS requires, separately from the filing itself.
• If the IRS sends a notice and the failure continues past 90 days, additional penalties generally apply for each 30-day period after that.

Filing late or incorrectly carries a $25,000 penalty per form, which is why many owners with reportable transactions choose to have both the books and the filing handled together. See the 5472 + Bookkeeping bundle or Form 5472 filing on its own

What if you never filed Form 5472 in past years?

If you missed Form 5472 filings, the standard fix is to file the late returns for every year the obligation applied. The requirement for foreign-owned single-member LLCs began with tax year 2017. 

So, the most conservative approach would be to file from 2017 or the year your LLC was formed, whichever is later. However, many owners opt to catch up only with the more immediate late returns if they haven’t received a penalty notice. 

A late filing is not a lost cause. In many cases the IRS will consider penalty relief where there is reasonable cause. Relief is never guaranteed, so the specifics of your situation matter here.

What we do for founders in this position:

1. Establish which years actually had a filing obligation.
2. Reconstruct the reportable transactions for each of those years.
3. Prepare and file the late Form 5472 and pro forma 1120 for each year.
4. Respond to IRS correspondence and, where appropriate, provide a reasonable cause statement.

As a licensed CPA firm, we have experience filing missed returns and handling IRS notices if they arise.

Missed one year or several? Talk to our tax team and we will map out exactly what needs filing.

Common mistakes to avoid

If you ever looked at the tax form with its 9 parts and read the 8 page instructions, it’s understandable that many foreign founders make mistakes with their filings. We often see LLC owners, who used a standalone incorporation service to register their LLC (or even one of the full-service providers) and are then left alone to figure out their taxes themselves.

Here are some of the most common mistakes we see:

1. Thinking “no income” means no filing.
2. Failing to list loans or reimbursements as transactions.
3. Not including all transactions with related parties.
4. Reporting in USD incorrectly (IRS requires exact exchange rates). 
5. Submitting Form 5472 without an EIN.
6. Missing deadlines because your accountant didn’t know about the requirement.
7. Reporting dividends and owner distributions in the wrong place or the wrong category.
8. Assuming that the use of company property is not reportable because no money moved.
9. Adding up direct ownership only and missing constructive ownership through family members.

Should you file Form 5472 yourself or hire a US tax professional?

Completing Form 5472 takes anywhere from a few hours to a couple of days, depending on how many reportable transactions you have and how organized your records are. That estimate covers the form itself. It does not cover the record-keeping work that has to happen first.

Filing it yourself is realistic if your situation is simple: one owner, one bank account, a handful of transactions, and books you kept up during the year. The form is free to file and the instructions are public.

It gets harder fast when any of these apply:

• More than one foreign related party
• Transactions that didn’t go through the US bank account
• A holding company or family members on the ownership chain
• Distributions or dividends during the year
• Any year you have not yet filed

Dividend reporting is the single most common error we correct in filings prepared by founders themselves. The amounts are usually right but the classification is not.

 I am not going to tell every founder to hire a CPA for this, because plenty of single-owner LLCs with six transactions a year genuinely do not need one. Here is the line I would draw. The penalty for getting this wrong starts at $25,000 per form, and a professional filing costs a small fraction of that. If you can list every reportable transaction and you are confident about who counts as a related party, file it yourself and keep good records. If you paused on either of those, the expected cost of a mistake is higher than the fee. That is the whole calculation.

— Vincenzo Villamena, CPA — CEO at Entity Inc.

FAQs about Form 5472

Do I have to file if my LLC had no income?

Can I file Form 5472 online?

What if I missed a year?

Does each foreign owner need a separate Form 5472?

Is this the same as Form 5471?

Is there a minimum transaction amount for Form 5472?

What does constructive ownership mean for Form 5472?

Do I still pay tax in my home country if I file Form 5472?

How long does it take to complete Form 5472?

What is Part V of Form 5472?

Form 5471 vs Form 5472: what is the difference?

Form 5471 and Form 5472 are both IRS information returns with no tax due and high penalties for failure to file. The difference is the direction of ownership: Form 5471 reports foreign companies owned by US persons, while Form 5472 reports US companies owned by non-US persons.

	Form 5471	Form 5472
Direction of ownership	US owner, foreign company	Foreign owner, US company
Who files	US persons who own or control a foreign corporation	US companies with at least 25% foreign ownership, including foreign-owned single-member LLCs
Purpose	Information return	Information return
Tax due with the form	None	None
Penalty starts at	$10,000 per form, per year	$25,000 per form, per year
Filed with	The US owner’s annual tax return	Form 1120, or a pro forma 1120 for a disregarded entity

The practical takeaway: if you are a non-US founder with a US LLC, Form 5472 is your form. Form 5471 becomes relevant only if you later become a US person for tax purposes, or if a US person joins your ownership structure. Both situations change your filing profile completely, so flag them early with your accountant.

How Entity Inc. helps foreign founders stay compliant

We specialize in helping non-US founders meet IRS requirements for foreign-owned LLCs and have successfully filed thousands of 5472 forms for entrepreneurs worldwide.

Included Services

• Preparation and filing of Form 5472 and pro forma 1120.
• Review of your LLC structure for reporting accuracy.
• Extension filings and penalty relief advice.

“They do our tax filings every year. When I started, everything in the US was confusing, but Entity Inc. team told me what I needed and helped with everything so I could focus on my business.” — Sharif El Komi, founder.