What Is Form 5472?
Form 5472 is an information return required by the IRS for certain U.S. corporations and foreign-owned domestic disregarded entities. Despite being called an “information return” — meaning it doesn’t calculate a tax owed — the penalty for failure to file is $25,000 per form, per year.
Who Must File
A foreign-owned single-member LLC (SMLLC) that is treated as a disregarded entity for U.S. tax purposes must file Form 5472 if it had any “reportable transactions” with its foreign owner or other related parties during the year.
Reportable transactions include:
- Capital contributions from the foreign owner
- Distributions to the foreign owner
- Loans between the LLC and the owner
- Payments for services between related parties
- Sale or purchase of property between related parties
In practice, almost any activity between the foreign owner and the LLC counts. Even a single contribution of capital to open the business account creates a filing obligation.
How to File
The SMLLC must obtain an Employer Identification Number (EIN) and file a pro forma Form 1120 (U.S. Corporation Income Tax Return) along with the attached Form 5472. The 1120 itself is essentially a shell — it reports no income or tax — but it is the required vehicle for submitting the 5472.
The due date follows the standard corporate return deadline: April 15 for calendar-year filers, with a six-month extension available.
The $25,000 Penalty
The penalty under IRC Section 6038A is $25,000 per Form 5472 that is not filed, not timely filed, or is incomplete. The IRS has been actively enforcing this penalty, and courts have upheld it even for taxpayers who were unaware of the requirement.
There is a reasonable cause exception, but it requires proactive documentation and is not guaranteed.
Common Mistakes
- Assuming a disregarded entity has no U.S. filing obligations
- Missing the deadline because the filer didn’t know a 1120 was required
- Omitting intercompany transactions that don’t seem significant
- Failing to file in years with only passive activity (the obligation exists regardless)
If you are a foreign national who owns a U.S. LLC — even a dormant one — confirm your Form 5472 filing status before the next deadline.
Last updated: January 2025