August 27, 2025
If you’re a foreign investor who formed a U.S single-member LLC treated as a disregarded entity, there’s a good chance the IRS expects an annual Form 5472. This informational return discloses “reportable transactions” between your U.S. entity and its foreign owner or other related parties. The rule applies to 25% foreign-owned U.S. corporations and foreign-owned U.S. disregarded entities (including single-member LLCs).
What triggers Form 5472?
Any reportable transaction with a related party can trigger filing, think payments, loans, service fees, and, for foreign-owned disregarded LLCs, even capital contributions and distributions tied to formation or operation. There’s no dollar threshold; de minimis amounts count.
How and when do you file?
Form 5472 is filed with a U.S. corporate return. For foreign-owned disregarded LLCs, that means attaching Form 5472 to a pro forma Form 1120 (the LLC generally has no income tax return otherwise). Calendar-year filers are typically due by April 15; a six-month extension is available by submitting Form 7004 by the original due date.)
Special filing logistics for foreign-owned SMLLCs:
These entities can’t e-file Form 5472; you must fax or mail the pro forma 1120 with Form 5472 to the IRS’s dedicated Ogden, Utah address (or dedicated fax). Follow the “Foreign-owned U.S. DE” instructions carefully when filing or extending.
What are the penalties?
The IRS imposes a $25,000 penalty for failing to file a timely, complete Form 5472 (including failure to maintain required records). If you still don’t file within 90 days of an IRS notice, an additional $25,000 can accrue for each 30-day period thereafter. Even “substantially incomplete” filings can be penalized.
San Diego area perspective
USIBTS regularly assists clients in Carlsbad and across San Diego County—including tech, biotech, e‑commerce, and real‑estate investors—with Form 5472 compliance. Because foreign‑owned entities typically have owners located overseas (non‑U.S. individuals or parent companies), we coordinate across time zones and focus on documenting cross‑border capitalization wires, intercompany service fees, owner‑reimbursed expenses, and year‑end distribution so filings are complete and on time.
Bottom line
If your foreign-owned U.S. LLC had any related-party transactions, even just capital put into the company, Form 5472 is likely on your to-do list. Get it right the first time to avoid five-figure penalties. Contact us for a consultation.
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