Definition:
Form 5472 is an IRS information return required to be filed by certain U.S. companies that are 25% or more foreign-owned, including Single-Member LLCs (SMLLCs) that are disregarded entities and owned by non-U.S. persons.
This form is used to disclose:
- The identity of the foreign owner
- Reportable transactions between the U.S. entity and its foreign owner or related parties (e.g., payments, loans, asset transfers)
- Basic company structure and ownership details
Even if the LLC has no income or operations, Form 5472 is mandatory if the entity is foreign-owned and has obtained an EIN. It must be submitted along with a pro forma Form 1120, even if the LLC is not taxed as a corporation.
Why is it important?
Failure to file Form 5472 accurately and on time can result in severe penalties starting at $25,000 per year. This is one of the most critical compliance requirements for non-resident founders with U.S. LLCs.
Who is it for?
Any non-U.S. individual or entity that owns at least 25% of a U.S. company (especially an SMLLC with an EIN) must assess their obligation to file Form 5472 annually.
