If you own a foreign-owned U.S. single-member LLC, you may be required to file Form 5472 and Form 1120 pro forma — even if your LLC had no income, no customers, and no operations.
This is one of the most common (and costly) points of confusion for non-U.S. founders. In this article, we’ll explain when Form 5472 is required, why “no activity” often does not mean “no filing,” and how to confirm your obligation.
Need to file Form 5472? Generate IRS-ready forms in about 10 minutes.
Get startedWhy This Question Causes So Much Confusion
Many foreign founders assume that U.S. tax filings are only required when:
- the company makes money
- the business is active
- U.S. tax is owed
For foreign-owned disregarded entities, that assumption is often wrong.
Form 5472 is an information return, not a tax return. The filing requirement is based on ownership and transactions, not profit.
When Form 5472 Is Required
You are generally required to file Form 5472 with Form 1120 pro forma if all of the following are true:
- You are a non-U.S. person
- You own a U.S. single-member LLC
- The LLC is treated as a disregarded entity
- The LLC had any reportable transaction with its foreign owner during the year
This is where most people get tripped up.
What Counts as “Activity” for Form 5472?
Even if your LLC had:
- no income
- no customers
- no revenue
you may still have had reportable transactions, such as:
- Initial capital contribution to open the LLC
- Transferring money into a U.S. bank account
- Paying expenses personally on behalf of the LLC
- Transferring money between yourself and the LLC
These transactions often happen automatically — especially in the first year.
What If My LLC Was Truly Inactive?
Even so, filing may still be required.
Many foreign-owned single-member LLCs are required to file Form 5472 simply because:
- the entity exists
- ownership is foreign
- financial relationships with the owner occurred
This is why relying on “no activity” as a rule can be risky.
What Happens If You Don’t File?
Failure to file Form 5472 correctly and on time can result in:
- a $25,000 IRS penalty per year
- additional penalties if the failure continues
- IRS notices that are difficult to resolve later
Most penalties happen not because of tax evasion, but because the filing requirement was misunderstood.
How to Know for Sure If You Must File
The safest approach is to confirm whether your situation meets the IRS criteria.
Ask yourself:
- Am I a foreign (non-U.S.) owner?
- Is my U.S. LLC single-member?
- Is the LLC treated as a disregarded entity?
- Did any money move between me and the LLC?
If the answer is “yes” to most of these, filing is likely required.
Free Compliance Check: Do I Need to File Form 5472?
Foreignfile.tax offers a free compliance checker designed specifically for foreign-owned single-member U.S. LLCs.
In under a minute, you can determine whether:
- Form 5472 is required
- Form 1120 pro forma must be filed
- Your LLC falls within the supported filing scope
👉 Run the free Form 5472 compliance check
Frequently Asked Questions
Is Form 5472 required every year?
Yes, as long as the ownership structure and reportable transactions continue.
Is Form 5472 a tax return?
No. It is an information return, which is why penalties apply even when no tax is owed.
Can I ignore this if my LLC never made money?
No. Income is not the determining factor.
Final Thoughts
For foreign founders, Form 5472 is one of the easiest U.S. filing requirements to miss — and one of the most expensive to ignore.
If you own a foreign-owned single-member U.S. LLC, it’s worth confirming your filing obligation before assuming “no activity” means “no filing.”