How to file Form 5472: your single-member LLC's report, part by part

Form 5472 is an information return. It assesses no tax and calculates nothing. It tells the IRS which transactions a company had with its foreign owner and other related parties. For an LLC with a single foreign owner, it is, together with a Form 1120 cover sheet, the annual filing obligation to the IRS. This page walks through the form part by part: who has to file, what goes on the cover sheet, what goes in each field, how you file and what you keep on record. If you would rather have the return filed for you, you will find our service, along with everything we need from you, on the page Zero tax return for the disregarded LLC.

1What Form 5472 is and who it applies to

The obligation comes from Section 6038A of the Internal Revenue Code. It applies to the so-called reporting corporation. Under regulation 26 CFR 1.6038A-1(c), that is either a domestic corporation in which a foreign person holds at least 25 percent of the voting power or value, or a foreign corporation engaged in a trade or business in the US.

For tax purposes, a single-member LLC is not really a corporation. Without an election, it is not treated as a separate taxpayer; it is a disregarded entity. For Section 6038A, however, the regulation makes an explicit exception: a domestic entity wholly owned by one foreign person that would otherwise be disregarded is treated as a separate domestic corporation for Section 6038A purposes. The instructions call it a foreign-owned U.S. DE. The rule applies to tax years beginning on or after January 1, 2017 and ending on or after December 13, 2017.

The result is a pure reporting obligation. It does not turn the single-member LLC into a taxpaying corporation; its income remains its owner's income for tax purposes. Whether and how the owner reports that income in the US is a separate question, and so is how the owner's country of residence classifies the LLC; you will find more on our page on taxation of the US LLC. This page covers only the reporting. If you own an LLC with no permanent establishment in the US, our sister site explains the form from your perspective: IRS Form 5472 on zerotax.llc.

Form 5472 applies in the same way to an Inc. with a foreign shareholder, attached to its actual tax return. See Form 1120.

2When the single-member LLC has to file

A reporting corporation must file if, during the tax year, it had a reportable transaction with a related party. Under the statute, related parties are the shareholder with at least 25 percent, persons related to the company or to that shareholder within the meaning of Sections 267(b) or 707(b)(1), and persons related to it within the meaning of Section 482. For a single-member LLC, that means you as the owner first, and then, for example, your company back home, your spouse or another company you own.

Three groups of transactions are reportable. First, monetary transactions of the kind listed in Part IV: sales, purchases, rents, licenses, services, commissions, loans and interest. Second, and only for the single-member LLC, any other transaction within the meaning of the transfer pricing regulations; the rules expressly name amounts connected with the formation, dissolution, acquisition and disposition of the entity, including contributions and distributions. Third, nonmonetary and less-than-full-consideration transactions under Part VI.

That leads to a rule that surprises many people: forming the LLC is itself a transaction. If you pay the formation costs, wire startup capital to the LLC's account or take money out, it has to be reported. The instructions list only one exception that applies to the single-member LLC: it does not have to file if there was no Part IV, V or VI transaction during the year. The other exceptions, such as when a US shareholder already reports the transactions on Form 5471, expressly do not apply to it. How the formation itself works and which obligations follow is explained in our guide to forming a US LLC as a nonresident.

3The cover sheet: the pro forma 1120

Form 5472 cannot be filed on its own. It is always attached to an income tax return. Because the single-member LLC does not file an income tax return itself, the instructions require a Form 1120 as a cover sheet, the so-called pro forma 1120. You fill in only the LLC's name and address and two fields on page one: box B with the EIN, and box E, where you check whether it is the initial return, the final return, or whether the name or address has changed. All other lines stay blank. Across the top of Form 1120 you write "Foreign-owned U.S. DE".

The LLC needs its own EIN for this, not a member's. How the company gets one without a Social Security number is explained under Getting an EIN without an SSN.

3.1Tax year and deadline

The single-member LLC's tax year is the tax year its owner uses for US tax purposes or, if the owner has none, the calendar year. For almost all owners from Europe, that is the calendar year. The return is due by the Form 1120 deadline, the 15th day of the fourth month after year end, so April 15. If that day falls on a weekend or holiday, the next business day is fine.

3.2Extension with Form 7004

If your records are not ready by April, Form 7004 extends the deadline by six months. The instructions set out three special points: on Form 7004, Part I, line 1, you enter the code for Form 1120; at the top you also write "Foreign-owned U.S. DE"; and you send the request not to the usual Form 7004 address but to the same fax number or mailing address as the return itself, by the regular deadline.

4Part I: the reporting corporation

Part I describes the LLC. Line 1a takes the full address including suite or office number; write a foreign address in the order city, province or region, country, without abbreviating the country. Line 1c asks for total assets; for a domestic entity, that is the figure from box D on page one of Form 1120. Lines 1d and 1e ask for a description of the principal business activity and its six-digit code from the list in the Form 1120 instructions.

Line 1f is the total, in US dollars, of all transactions with foreign related parties that you report on this form in Parts IV, V and VI. Line 1g asks how many Forms 5472 the company is filing in total for the year, because each related party gets its own form. Line 1h is the total of line 1f across all those forms. Check line 1j if the company is filing Form 5472 for the first time. Line 1o lists the countries where the company mainly does business; "worldwide" is expressly not allowed. And on line 3, the single-member LLC checks the box stating that it is a foreign-owned U.S. DE.

5Parts II and III: owner and related party

Part II shows the shareholder holding at least 25 percent. For a single-member LLC, that is its owner. If you own it through a company, that company is the direct shareholder on lines 4, and you can appear as the indirect shareholder on lines 6; for the indirect holding, the Instructions require an attachment explaining the attribution.

5.1Taxpayer ID, Reference ID and foreign tax ID

For each shareholder, the form asks for three numbers. First, the US taxpayer ID, if there is one: an SSN or ITIN for individuals, an EIN for companies. If the owner has none, the LLC enters a Reference ID Number. The company assigns this number itself; there is no need to apply for it with the IRS. It consists of letters and digits with no spaces or special characters, is no more than 50 characters long and must stay the same year after year. So you do not need an ITIN for Form 5472. Third, the single-member LLC enters the owner's foreign tax ID; if there is none, it writes "None" or "N/A".

5.2Part III

Part III describes the related party the reported transactions were with. The Instructions are clear: every company completes Part III, even if the person is the same as in Part II. So for a single-member LLC whose only related-party counterparty is its owner, Parts II and III contain the same details.

6Parts IV and V: the transactions

Part IV lists monetary transactions with a foreign related party, split into amounts received on lines 9 to 22 and amounts paid on lines 23 to 36. All amounts are in US dollars, and an attachment states the exchange rates used. You report loans with the opening and closing balance or with the monthly average. Where an amount cannot be determined exactly, the Instructions allow a reasonable estimate within 75 to 125 percent of the actual amount. And if an amount, or a series of amounts with the same party, totals no more than $50,000, it may be reported in the "$50,000 or less" category.

6.1Part V: for the single-member LLC only

Part V exists only for the foreign-owned U.S. DE. You check the box if the LLC had a transaction during the year that is not already in Part IV, and you describe it in an attachment. The form explicitly names amounts related to the formation, dissolution, acquisition and disposition of the company, as well as contributions and distributions. In practice, this is where most of the year ends up for many companies: the transfer of start-up capital, formation costs you paid personally, and every distribution. The attachment should state the type, date or period, and amount of each transaction.

6.2Parts VI and VII

Part VI covers transactions that did not involve money alone, or where the value did not match full consideration, for example if you let the LLC use software, your labor or a vehicle free of charge. Here too, the Instructions require an attachment with a description and an estimated market value. Every company completes Part VII with additional information; its questions mainly concern special interest and royalty payments and other special cases that rarely apply to a small company.

7Filing by fax or mail

The foreign-owned single-member LLC has its own filing address. The addresses in the Form 1120 Instructions do not apply to it. The pro forma 1120 with Form 5472 and all attachments goes either by fax, at a minimum of 300 DPI, to 855-887-7737, or by mail to Internal Revenue Service, 1973 Rulon White Blvd, M/S 6112, Attn: PIN Unit, Ogden, UT 84201. This LLC cannot file Form 5472 electronically.

If you fax, keep the transmission report showing date, time, page count and recipient number together with the version you sent. If you mail it, use a service that provides proof of the mailing date.

8Records to keep

The reporting obligation comes with a recordkeeping obligation. The company must keep books and records sufficient to establish the accuracy of what it reports, including records that may be relevant to the tax treatment of related-party transactions. This follows from Section 6001 and the regulation at 26 CFR 1.6038A-3. Companies with less than $10 million in US gross receipts are exempt from that regulation's special recordkeeping rules, but not from the filing itself, and not from the general obligation under Section 6001. The IRS manual explicitly stresses that there is no small-company exception for filing Form 5472.

In practice, that means: the LLC's bank statements for the full year, proof of every transfer between you and the LLC, invoices for transactions with your company at home or other companies you own, the formation documents, and a copy of every filing with its transmission report. How to set up the bookkeeping for this is covered in Bookkeeping for your US LLC.

9If the filing is missing

If Form 5472 is not filed, or not filed in the required form, Section 6038A(d) imposes a penalty of $25,000 for each tax year. The same penalty applies if the company fails to keep the required records. Under the Instructions, a substantially incomplete Form 5472 counts as not filed. If the failure continues for more than 90 days after IRS notice, another $25,000 is added for each related party and each 30-day period or part of one, with no cap. For false or fraudulent information, the Instructions also cite the criminal penalty provisions of Sections 7203, 7206 and 7207.

The penalty is not a dead end. If you can show reasonable cause, you can request relief, and for small companies with little connection to the US, the IRS is meant to apply reasonable cause generously. How it works, what documents the request needs and why the usual first-time abatement rule does not apply to Form 5472 is covered in Penalties and late filing. When the filing falls due during the year alongside the Annual Report and Registered Agent renewal is shown in the annual compliance calendar.

In short

• An LLC with a single foreign owner is treated as a domestic corporation for Section 6038A purposes and reports its related-party transactions on Form 5472.
• The filing goes in with a pro forma 1120 showing only name, address, EIN and box E, by the Form 1120 deadline.
• Part V exists only for this LLC: formation, dissolution, contributions and distributions are described there in an attachment.
• Filing is by fax to 855-887-7737 or by mail to Ogden, not electronically.
• If the filing is missing or substantially incomplete, the law imposes $25,000 per tax year.

How we help you

• Zero Tax Return LLCPro forma Form 1120 and Form 5472 for the single-member LLC.
• Corporation tax returnForm 1120 and Form 5472 for your US corporation.
• IRS letters and penaltiesMail from the IRS? We reply, request penalty relief and put things right.
• US Tax ConsultationYour US tax question, answered by people who know both sides.