Report your company's foreign ownership.
A US company that is at least 25 percent foreign-owned has to report its dealings with related owners to the IRS on Form 5472. The rule catches more businesses than owners expect, including foreign-owned single-member LLCs that thought they had nothing to file. Miss it and the penalty starts at 25,000 dollars. We identify whether you are covered and file it with the return it attaches to.
The IRS window into foreign-owned companies.
Form 5472 is the Information Return of a 25 Percent Foreign-Owned US Corporation or a Foreign Corporation Engaged in a US Trade or Business. It is not a tax return and does not calculate tax. Its job is to show the IRS the transactions between the company and its foreign owners or related parties, such as money the owner put in, loans, or payments for services. The rule that surprises people is this: a US single-member LLC owned by a foreign person is treated as a corporation for this one purpose, so even a simple foreign-owned LLC with no US tax to pay usually has to file a Form 5472 attached to a pro forma Form 1120.
Two documents that travel together.
The 5472 does not go in alone. It attaches to a Form 1120, and for a foreign-owned disregarded entity that 1120 is a pro forma, filled in only enough to carry the 5472.
- Form 5472 itself. The information return listing the reportable transactions with your foreign owner and related parties.
- The Form 1120 it attaches to. A full 1120 for a taxable corporation, or a pro forma 1120 for a foreign-owned disregarded entity.
- The transaction detail. The contributions, loans, and payments the form has to disclose, valued in US dollars.
- A record you filed both. Confirmation the pair went in together, since one without the other is treated as not filing.
More companies than owners expect.
The reach of Form 5472 is wide. If a foreign person owns a quarter or more of a US company and there were dealings between them, the form is usually required.
- A US corporation that is 25 percent or more foreign-owned, with a reportable transaction
- A US single-member LLC owned by a foreign person, filing with a pro forma 1120
- A foreign corporation engaged in a trade or business in the United States
- Companies whose only dealings were forming, funding, or lending with the foreign owner
- US companies with no 25 percent foreign owner
- Foreign-owned companies that had no reportable transaction at all during the year
- Owners reporting personal, non-business dealings unrelated to the company
- Entities that already report the same information on another required return, in limited cases
Foreign-owned and not sure if you are covered? Even a contribution of startup capital can be a reportable transaction. It is safer to check than to assume you are exempt.
Filed with the return, and costly to miss.
These figures are verified against current IRS guidance. The 5472 follows the deadline of the 1120 it attaches to, and the penalty for missing it is one of the steepest in this area.
Penalty amounts are set by statute and can change. We confirm the current figure before every filing.
From ownership to a filed pair.
- 1Check whether you are covered
We confirm the 25 percent ownership and whether a reportable transaction occurred during the year.
- 2List the transactions
We gather the contributions, loans, and payments between the company and its foreign owner, valued in US dollars.
- 3Prepare the 5472 and 1120
We complete the 5472 and the full or pro forma 1120 it attaches to, as one package.
- 4File by the 1120 deadline
We file both together on time, or request the extension on Form 7004, with confirmation for your records.
The 25,000-dollar mistake is an easy one.
Most 5472 penalties hit foreign-owned LLC owners who did not know they had to file, or who filed the 5472 without its 1120. We catch both traps and file the pair correctly.
We tell you whether your foreign-owned company has to file, including the single-member LLC trap.
We submit the 5472 and its 1120 together, so it is never treated as a missing filing.
We track your April due date and file for the extension when you need more time.
You see the price before you file, with no surprise add-ons. See pricing →
Around your US company.
The corporate return the 5472 is filed with, full or pro forma.
Explore → You need oneGet an EINRequired to file, even for a foreign-owned single-member LLC.
Explore → How you are taxedForm 8832The entity classification election that can change your default treatment.
Explore → Need more timeForm 7004Extend the 1120 deadline, and with it the 5472.
Explore →Form 5472, answered.
I have a foreign-owned LLC with no US tax. Do I still file?
Usually yes. A US single-member LLC owned by a foreign person is treated as a corporation for this rule and must file a Form 5472 with a pro forma Form 1120, even when there is no US income tax to pay. Forming and funding the LLC are themselves reportable transactions.
What counts as a reportable transaction?
Dealings between the company and its foreign owner or related parties: money contributed, loans made or repaid, and payments for goods, services, rent, or royalties. Even the initial capital you put in can count.
When is it due?
With the Form 1120 it attaches to, by April 15 for a calendar-year filer, or the 15th day of the 4th month. Form 7004 extends the deadline to October 15.
What is the penalty for not filing?
25,000 dollars for each form not filed or filed substantially incomplete, with another 25,000 dollars for each 30-day period the failure continues beyond 90 days after the IRS notifies you.
Do I need an EIN?
Yes. Even a foreign-owned single-member LLC that would not otherwise need one must have an EIN to file Form 5472. The classification election you made can also affect how you file.