IRS Form 5472: A guide for foreign founders
Michel Myara is co-founder and product designer at looch, where he designs the tools small businesses use to get paid, manage spend, and run their books.
If you are a non-US founder who owns a US company, you very likely have to file IRS Form 5472. This includes the case that surprises most foreign founders: a single-member LLC owned by a non-US person. Skipping it is expensive. The IRS penalty for failing to file Form 5472 when due is $25,000, and the penalty applies even if your company made no money and owes no income tax.
This guide explains who must file, why a foreign-owned single-member LLC has to file Form 5472 attached to a pro forma Form 1120, what counts as a reportable transaction, when it is due, and why you need an EIN before you can file at all. This is tax content with real money at stake, so every figure below is drawn from the IRS Form 5472 instructions, and you should use a qualified tax professional to do the actual filing.
Who must file Form 5472
The IRS requires Form 5472 from a "reporting corporation" that has a reportable transaction with a related foreign or domestic party during the tax year. Per the IRS Instructions for Form 5472, a reporting corporation is either:
- a 25% foreign-owned US corporation, including a foreign-owned US disregarded entity, or
- a foreign corporation engaged in a trade or business within the United States.
The form exists to satisfy the information-reporting rules under Internal Revenue Code sections 6038A and 6038C.
"25% foreign-owned" means at least one foreign person owns, directly or indirectly, 25% or more of the company by vote or value at any point during the tax year. For most foreign founders, that test is met easily: if you are a non-US person and you own a quarter or more of a US company, you are in scope.
The phrase that trips people up is "including a foreign-owned US disregarded entity." That is the single-member LLC case, and it deserves its own section.
The foreign-owned single-member LLC trap
A single-member LLC is, by default, a disregarded entity for US federal tax purposes. The IRS looks through it and treats its activity as belonging to its owner. Because it is "disregarded," it does not file its own income tax return, and many foreign founders assume that means no US filing at all.
That assumption is wrong, and it is the most common Form 5472 mistake foreign founders make.
Since 2017, the IRS treats a foreign-owned US disregarded entity as a corporation for the limited purpose of these reporting rules. The result: a single-member LLC wholly owned by a non-US person must file Form 5472, even though the LLC files no regular income tax return and may owe no US tax.
How a disregarded entity actually files
A disregarded entity has no income tax return to attach Form 5472 to, so the IRS created a workaround. Per the Form 5472 instructions, the LLC files a "pro forma" Form 1120 with Form 5472 attached. "Pro forma" means a near-empty shell. The instructions state that the only information required on that Form 1120 is the name and address of the foreign-owned US disregarded entity and items B and E on the first page. You are not computing corporate income tax on it. The 1120 is just the cover sheet that carries the 5472.
The filing also goes to a special place. A foreign-owned US disregarded entity cannot file this electronically. The instructions direct it to fax the pro forma 1120 and attached 5472 to 855-887-7737, or mail it to the IRS in Ogden, Utah. This is different from how a normal 25% foreign-owned corporation files, which is by attaching Form 5472 to the corporation's regular income tax return.
If you formed a US LLC as a non-US founder and you have moved any money between yourself and the company, assume this applies to you and confirm with a tax professional.
What counts as a reportable transaction
Form 5472 is only required when there is a reportable transaction with a related party during the tax year. A related party generally includes the foreign owner and other entities the owner controls.
For an ordinary 25% foreign-owned corporation, reportable transactions are the kinds of dealings listed on the form: sales and purchases of inventory, rents and royalties paid or received, interest, commissions, amounts loaned or borrowed, and similar monetary and nonmonetary exchanges between the company and its foreign related party.
For a foreign-owned US disregarded entity, the definition is broader than founders expect. The instructions treat contributions of money or property into the LLC and distributions out of it as reportable transactions, along with any other amounts paid or received in connection with the formation, dissolution, acquisition, or disposition of the entity. In plain terms: if you funded your single-member LLC, or took money out of it, or paid its formation costs from your own pocket, you have likely had a reportable transaction. That is what creates the filing obligation for an LLC that otherwise looks dormant.
Because the disregarded-entity threshold for "reportable" is so low, many foreign-owned LLCs that consider themselves inactive still have to file. Do not assume "no revenue" means "no filing."
The filing deadline
Form 5472 is due with the income tax return it attaches to, by that return's due date including extensions. Per the Form 5472 instructions, for a calendar-year filer that generally means April 15. You can extend the deadline by filing Form 7004 for the underlying return, which pushes the due date out (commonly to October 15 for a calendar-year filer).
For a foreign-owned single-member LLC, the same timing rule governs the pro forma Form 1120 and the attached 5472: file by the 1120 due date, including any extension obtained with Form 7004.
Confirm the exact date that applies to your tax year and entity type with your tax professional, because the deadline tracks the return type and any extension you file.
You need an EIN before you can file
Form 5472 cannot be filed without an Employer Identification Number (EIN) for the US entity. The IRS is explicit that a US disregarded entity wholly owned by a foreign person must obtain an EIN specifically so it can file Form 5472 under section 6038A.
This is where many foreign founders stall. The IRS online EIN tool requires a US Social Security Number or ITIN, which a non-resident founder often does not have. The correct path in that case is to apply on Form SS-4 and, per the IRS Instructions for Form SS-4, enter "Foreign-owned U.S. disregarded entity filing Form 5472" as the entity type so the IRS routes the application correctly. We cover that whole process in our guide to getting an EIN as a non-US founder.
The EIN is a prerequisite, not the filing itself. You get the EIN first, then you (or your tax professional) file Form 5472 when it is due.
The penalty for getting it wrong
This is why Form 5472 is worth taking seriously. Per the Form 5472 instructions, a penalty of $25,000 is assessed on any reporting corporation that fails to file Form 5472 when due, or that files a substantially incomplete form. If the failure continues for more than 90 days after the IRS mails notice of it, an additional $25,000 penalty applies for each 30-day period (or part of a period) that the failure continues after the 90 days, with no stated ceiling. Criminal penalties can also apply for willful failure to file or for filing false information.
The penalty is not tied to how much income your company earned. A dormant foreign-owned LLC that had a single reportable transaction and missed its filing can be assessed the full $25,000. That is the trap: founders treat an inactive LLC as nothing to worry about, and the information-return penalty does not care about activity level.
If you have missed a year, do not ignore it. Talk to a tax professional about your options before the IRS contacts you, because the penalty structure escalates after notice.
How looch fits in
looch does not file Form 5472 for you, and you should not trust any formation service that claims it does as a checkbox feature. Form 5472 is a tax filing that belongs with a qualified tax professional who knows your specific transactions.
What looch does handle is the part that has to happen first. Before you can file Form 5472, you need a US entity and an EIN, and as a non-US founder you need the EIN even without an SSN or ITIN. looch Start forms your US company and obtains your EIN, including the Form SS-4 path for founders who have no SSN or ITIN. That gives you the two prerequisites Form 5472 depends on. From there, hand your transactions to a tax professional for the actual 5472 filing.
If you are still deciding on an entity type, our guide to forming a Delaware C corporation walks through the structure most venture-backed founders choose, and the EIN path inside it is the same one Form 5472 requires.
Frequently asked questions
Does a foreign-owned single-member LLC really have to file Form 5472?
Yes, if it had a reportable transaction during the tax year. The IRS treats a foreign-owned US disregarded entity as a reporting corporation for these rules. It files Form 5472 attached to a pro forma Form 1120, even though the LLC files no regular income tax return and may owe no US income tax.
My LLC had no revenue. Do I still file?
Possibly yes. For a disregarded entity, contributions into the LLC and distributions out of it count as reportable transactions, along with amounts tied to forming or dissolving it. Funding the company or paying its costs yourself can be enough to trigger the filing. Confirm your specific facts with a tax professional.
What is the penalty for not filing Form 5472?
$25,000 for failing to file when due or filing a substantially incomplete form. An additional $25,000 applies for each 30-day period the failure continues beyond 90 days after the IRS mails notice. Criminal penalties can apply for willful violations.
When is Form 5472 due?
With the income tax return it attaches to, by that return's due date including extensions. For a calendar-year filer that is generally April 15, and Form 7004 can extend it. A foreign-owned single-member LLC follows the same timing for its pro forma Form 1120 and attached 5472.
Can I file Form 5472 without an EIN?
No. The US entity needs an EIN, and a foreign-owned US disregarded entity is specifically required to obtain one to file Form 5472. A non-US founder without an SSN or ITIN applies on Form SS-4. looch Start obtains the EIN as part of forming your company.
Form your company and get your EIN
Form 5472 starts with two things in place: a US entity and an EIN. Form your company and get your EIN with looch Start, including the EIN path for non-US founders with no SSN or ITIN, then bring your transactions to a qualified tax professional for the Form 5472 filing itself.
