Foreign-owned single-member LLC? Form 5472 is due even with no income

If you live outside the United States and own a U.S. LLC by yourself, the IRS treats your company as invisible for income tax purposes. It is a disregarded entity. Most owners hear "disregarded" and conclude there's nothing to file.

There is. Every year.

What the rule is. Since 2017, a single-member LLC owned by a foreign person is treated as a corporation for one purpose: reporting transactions with its owner and other related parties. That means filing Form 5472 attached to a pro forma Form 1120. The 1120 is mostly blank. Only the company's name and address and a few identifying items are completed. The 5472 is where the substance goes.

What counts as a reportable transaction. More than most owners expect. Money you put in to form or fund the company. Money you take out. Loans in either direction. Company expenses you paid personally, and personal expenses the company paid. Payments for services, rent, or use of property between you and the company. Even the formation itself: the fees you paid to set the company up are a transaction with a related party.

So a company that earned nothing this year still almost always has something to report. The year you formed it, you contributed money to it. That's a reportable transaction.

What it costs to miss. The penalty is $25,000 for each failure to file a complete and correct Form 5472 on time. A substantially incomplete form counts as a failure to file. If the IRS sends a notice and the form still isn't filed within 90 days, an additional $25,000 can apply for each 30-day period after that, and the IRS says there is no maximum. The same penalty applies to failing to keep the required records.

How it gets filed. This is the part that trips people up. Form 5472 for a foreign-owned disregarded entity can't be e-filed. It goes by fax or by mail to a dedicated IRS unit in Ogden, Utah, with "Foreign-owned U.S. DE" written across the top of the Form 1120. The regular Form 1120 mailing address is the wrong one. The due date is the corporate return due date, which for a calendar-year company is April 15. A Form 7004 extension is available, but it has to go to the same dedicated address.

What else you need. The company needs its own EIN. The form asks for each direct and ultimate foreign owner's foreign taxpayer identification number, if one exists. And the company must keep records sufficient to support every related-party transaction it reports, which is one more reason to run everything through a company bank account. What commingling actually looks like applies here twice over. Your EIN, the responsible party, and what a DBA actually is covers the EIN side.

If you've missed years. You're not the first. The answer depends on how many years, whether the IRS has contacted you, and what the transactions were. Catching up before a notice arrives is generally better than after. That conversation belongs with a tax professional experienced in international information returns, and it should happen soon.

This isn't the only filing. Form 5472 sits alongside whatever your home country requires, any state filings, and the reporting your bank does on its own. If you're not a U.S. person and you own a U.S. company covers the broader picture. Do you still have to file a beneficial ownership report? covers FinCEN, which is a different question.

The short version: foreign owner, U.S. LLC, one member means a Form 5472 every year, income or not.

Book a consultation if you want to know where your company stands.

This is general information, not legal advice for your situation. If you want an answer for your situation, book a consultation.