Who this applies to

A "foreign-owned US DE" (Disregarded Entity):

  1. US single-member LLC
  2. Owner is a non-US person (individual, corporation, or trust)
  3. LLC engaged in a US trade or business OR had reportable transactions with the foreign owner

This is very common for non-residents who form Delaware, Wyoming, or New Mexico LLCs for US operations (Amazon FBA, US customer billing, etc.).

The forms required

The 1120 here is just a cover sheet — no actual tax calculation. The IRS wants it attached so Form 5472 has a filing home.

What Form 5472 reports

Transactions between the US LLC and its foreign owner (or related parties). Reportable transactions include:

Amount, description, and identity of the foreign related party — all must be disclosed.

The penalty

$25,000 per form, per year

Failure to file Form 5472 (or filing a materially incomplete one) = $25,000 civil penalty. Continued failure adds another $25,000 every 30 days after IRS notice.

This is the IRS's most expensive informational-return penalty. And it's easy to trigger by accident — many foreign owners don't know the form exists.

The deadline

Form 5472 is due with a Form 1120 filing. For a calendar-year LLC that's April 15. Extension to October 15 is available via Form 7004.

Common scenarios

Scenario 1: Non-resident files Delaware LLC for Amazon FBA

Single-member LLC formed in Delaware. Owner lives in Germany. LLC sells on Amazon US. LLC receives payments from Amazon, pays fulfillment costs, distributes profits to owner. Form 5472 required annually reporting the capital contributions, distributions, and any inter-company transfers.

Scenario 2: Digital services LLC for US customers

LLC in Wyoming. Owner in Portugal. LLC invoices US clients for software development. Same requirement — Form 5472 for all money movement between owner and LLC.

Scenario 3: Passive holding LLC

LLC holds US real estate. Owner in UAE. Even if no income flows (property is held as investment), capital contributions and the entity relationship itself may require reporting.

How to file

  1. Prepare Form 5472 with all reportable transactions listed
  2. Prepare a pro forma Form 1120 (minimal — just the entity info page)
  3. Attach 5472 to the 1120
  4. Mail or fax to: Internal Revenue Service, 1973 Rulon White Blvd., M/S 6112, Attn: PIN Unit, Ogden, UT 84201 (fax 855-887-7737)
  5. Cannot currently e-file (as of 2025, this may change)

What if you missed previous years?

File now. Some practitioners recommend filing delinquent returns under reasonable cause relief requests. Whether penalties are waived depends on the specific facts — the IRS has shown flexibility for first-time failures with documented unawareness.

If you've missed multiple years AND have significant reportable transactions, consult a US tax attorney who specializes in international tax. Not a domestic CPA — the rules are specialized.

Other forms that often apply to foreign-owned LLCs

FormWhen required
1040-NRIf the LLC income is US-source and the owner owes US tax on it
Form W-8BEN-EForeign owner provides to US payers to claim treaty benefits
Form 8832If LLC elects to be taxed as a corporation (different 5472 rules apply)
FBAR / FinCEN 114If LLC has foreign bank accounts over $10k aggregate
Form 8938If owner is a US person with foreign assets (not applicable here but adjacent)

The state layer

Each US state has its own rules for foreign-owned LLCs. Delaware and Wyoming are permissive. California treats most LLCs with California economic activity as doing business there regardless of formation state, triggering the $800 franchise tax.

The ongoing obligations in one list

Is your foreign-owned LLC in compliance?

We flag filing requirements specific to your entity structure. Don't get surprised by a $25,000 penalty notice.