Form 5472: Foreign-Owned US LLC Tax Filing Guide
What is IRS Form 5472? Learn about filing requirements, $25,000 penalties, and deadlines for foreign-owned US LLCs and non-US founders.
Definition
Form 5472 (Information Return of a 25% Foreign-Owned US Corporation or a Foreign-Owned US Disregarded Entity) is an IRS tax filing that must be submitted by:
- US corporations with 25% or more foreign ownership.
- Foreign-owned US LLCs (disregarded entities).
Who Must File Form 5472
You must file Form 5472 if both conditions apply:
- 25% or more ownership: A foreign person (or entity) owns at least 25% of the US LLC.
- Threshold met: Either:
- Gross receipts from US sources exceed $20,000 in the tax year, OR
- Total US assets exceed $20,000 at any point during the year.
Single-Member Foreign-Owned LLC
If you are a non-US founder with a single-member LLC (one owner), you likely meet the ownership threshold automatically.
Most non-US founders with SaaS, ecommerce, or digital products exceed the $20,000 threshold in their first year.
Form 5472 vs Other Tax Filings
| Form | Purpose | Who Files |
|---|---|---|
| Form 5472 | Report foreign ownership and transactions | Foreign-owned US LLCs/Corps |
| Form 1120 | US corporate income tax return | C-Corporations |
| Form 1065 | Partnership return | Partnerships |
| Form 1040-NR | Nonresident alien tax return | Non-US persons with US income |
Penalty for Non-Filing
$25,000 per year, per form.
This penalty applies even if:
- The LLC had no taxable income.
- The foreign owner is not physically in the US.
- You were unaware of the filing requirement.
What Form 5472 Requires
Information About the Foreign Owner
- Name, address, country of citizenship.
- ITIN or SSN (an ITIN is typically required for non-US persons).
- Ownership percentage.
Information About the LLC
- Gross receipts (US and foreign sources).
- Total assets.
- Principal business activity.
- Related-party transactions.
Related-Party Disclosures
If the LLC has transactions with related foreign parties (e.g., paying dividends, royalties, or services), detailed disclosure is required.
Connection to BOI Reporting
Form 5472 and FinCEN’s BOI reporting share similar goals (transparency about ownership) but are separate requirements:
| Aspect | Form 5472 | BOI Report |
|---|---|---|
| Filed with | IRS | FinCEN |
| Required by | IRC Section 6038A | Corporate Transparency Act |
| Who files | Foreign-owned LLCs | All LLCs (with exceptions) |
| Penalty | $25,000 | $500 (after 2024) |
How to File Form 5472
- Obtain an ITIN: Nonresident aliens need an ITIN; this process typically takes 6-10 weeks.
- Prepare financial statements: Gather US and foreign source receipts, along with asset values.
- Complete Form 5472: Attach the form to the LLC’s tax return (Form 1120 for C-Corps or Form 1065 for partnerships).
- File by the deadline: This is usually March 15 for partnerships or April 15 for corporations.
Related Terms
- EIN: Employer Identification Number, required for tax filings.
- ITIN: Individual Taxpayer Identification Number, often required for non-US persons filing Form 5472.
- FinCEN: The agency responsible for Beneficial Ownership Information (BOI) reporting.
This is a dictionary entry. For full compliance guide, see Form 5472: Foreign-Owned US LLC