IRS Form 5472 is an information return that the Internal Revenue Service requires certain U.S. entities to file when they have foreign owners or foreign related-party transactions.
If you are a non-U.S. person who owns a U.S. single-member LLC, Form 5472 almost certainly applies to you — even if your LLC had no income or business activity.
Many foreign founders only discover this requirement after receiving a $25,000 IRS penalty notice. This guide explains what Form 5472 is, who must file it, and why the IRS requires it.
What Is Form 5472 Used For?
Form 5472 is used by the IRS to collect information about transactions between U.S. entities and foreign owners or foreign related parties.
The IRS uses this form to:
- Monitor foreign ownership of U.S. businesses
- Track cross-border financial activity
- Enforce transparency and reporting rules
- Prevent tax avoidance and abuse
Important: Form 5472 does not calculate or assess tax.
It is an information return, not a tax payment form.
Who Must File IRS Form 5472?
You are required to file Form 5472 if all of the following are true:
- You are not a U.S. citizen or U.S. resident
- You own 100% of a U.S. single-member LLC
- Your LLC is disregarded for U.S. tax purposes
- The LLC had any reportable transaction with you (the foreign owner)
What counts as a reportable transaction?
Common examples include:
- Capital contributions
- Owner loans to or from the LLC
- Reimbursements
- Payments for expenses
- Transfers of money between you and the LLC
In practice, most foreign-owned single-member LLCs have at least one reportable transaction each year.
Do I Need to File Form 5472 If My LLC Had No Income?
Yes.
This is the most common and costly misunderstanding.
Even if your LLC:
- Earned $0 in revenue
- Had no customers
- Did not actively operate
You may still be required to file Form 5472 if the LLC existed during the year and had any financial interaction with its foreign owner.
"No income" does not mean "no filing requirement."
What Forms Are Filed With Form 5472?
Form 5472 is filed together with a pro forma Form 1120.
What does "pro forma" mean?
- The Form 1120 acts as a cover page
- Only limited information is completed
- No income or tax calculation is required for disregarded entities
- Form 5472 is attached to it
Both forms are submitted together as one filing.
What Is the Penalty for Not Filing Form 5472?
The penalties are severe.
- $25,000 minimum penalty
- Applies per year, per form
- Additional penalties can accrue if the IRS requests the form and you do not respond
There is no automatic penalty waiver for first-time filers or honest mistakes.
This is why compliance matters — even for small or inactive LLCs.
Why Does the IRS Require Form 5472?
The IRS considers foreign-owned U.S. entities to be higher-risk from a compliance perspective.
Form 5472 helps the IRS:
- Enforce transparency rules
- Monitor cross-border ownership and transactions
- Prevent money laundering and tax abuse
- Maintain oversight even when no tax is owed
That's why filing is required even when the LLC has no income.
Is Form 5472 Difficult to File?
For non-U.S. founders, it often is.
Common challenges include:
- IRS instructions written for U.S. tax professionals
- Confusing terminology
- Unclear definitions of reportable transactions
- High CPA fees for simple filings
As a result, many foreign owners:
- File incorrectly
- File late
- Or do not file at all
How Can Foreign Owners File Form 5472 Correctly?
Foreign owners typically have three options:
1. Hire a CPA or tax attorney
- Often expensive
- Slow turnaround
- Overkill for simple cases
2. File manually using IRS instructions
- Time-consuming
- High risk of mistakes
- Not beginner-friendly
3. Use a purpose-built filing tool
- Designed specifically for foreign-owned single-member LLCs
- Guided, step-by-step
- Faster and more affordable
The right option depends on how complex your situation is.
Key Takeaways
- Form 5472 is mandatory for most foreign-owned single-member LLCs
- Filing is required even if the LLC had no income
- The form is filed with a pro forma Form 1120
- Penalties start at $25,000
- Form 5472 is about reporting, not paying tax
Ready to File Form 5472?
If you are a foreign owner of a U.S. single-member LLC and want a simpler way to file Form 5472 correctly, foreignfile.tax is built specifically for this situation.
Most users complete their filing in about 10 minutes — no U.S. tax expertise required.