Foreign-Owned US LLC: 2025 Form 5472 Deadlines & $25K Penalties

The Foreign-Owned US LLC: Why “Zero Income” Doesn’t Mean “Zero Filing”

In 2025, a recurring issue for our international clients was the belief that a US LLC with no US-source income requires no paperwork. This is a dangerous misconception. If your LLC is 100% owned by a non-US person (directly or indirectly), you are likely required to file Form 5472.

1. The $25,000 Question: What is Form 5472?

Form 5472 is an information return used to report “reportable transactions” between a foreign-owned US LLC and its owner or related parties.

What counts as a reportable transaction?

• Capital Contributions: You sent money from your personal bank account to your LLC to pay for a domain or legal fees.
• Loans: You lent money to the LLC or vice versa.
• Service Fees: You paid yourself a management fee.
• Distributions: You moved money from the LLC back to your personal account.

2. The 2025–2026 Filing Deadlines

For a calendar-year LLC (January 1 – December 31, 2025), your deadlines are as follows:

• April 15, 2026: The primary deadline to file Form 5472 along with a Pro-forma Form 1120.
• October 15, 2026: The extended deadline (only if you file Form 7004 by April 15).

KKCA Warning: Unlike most tax forms, the IRS currently requires foreign-owned disregarded entities to fax or mail these forms to a specific address in Ogden, Utah. Electronic filing is generally not available for this specific “pro-forma” filing.

3. The “Pro-forma” 1120 Requirement

Because a single-member LLC doesn’t file a corporate tax return, the IRS requires you to file a “Pro-forma” Form 1120. This is a nearly blank version of the corporate return that acts as a cover sheet for your Form 5472.

• You must write “Foreign-owned U.S. DE” across the top of the form.
• Only basic identifying information is required on the 1120; the real data lives on the attached 5472.

4. Draconian Penalties

The IRS does not send “reminders” for Form 5472. If you miss the deadline or file a “substantially incomplete” form, the penalty is $25,000 per form.

• If you have two foreign owners, that’s $50,000.
• If you don’t respond to an IRS notice within 90 days, the penalty increases by $25,000 every 30 days with no upper limit.

5. New for 2026: The New York Transparency Act

If your foreign-owned LLC is authorized to do business in New York, a new state law effective January 1, 2026, requires you to disclose beneficial ownership information directly to the NY Department of State. This is in addition to your federal IRS requirements.

How KKCA Protects Your US Business

Navigating the “disregarded entity” trap is a KKCA specialty. We ensure your US structure remains a tool for growth, not a source of penalties.

1. Annual Compliance Check: We review your ledger for any “hidden” reportable transactions (like paying for LLC software from a personal card).
2. EIN & 5472 Preparation: We handle the specialized fax/mail filing process for pro-forma returns.
3. Audit Defense: If you’ve missed a year, we help you file under the Delinquent International Information Return Submission Procedures to mitigate that $25,000 risk.

Looking for personalized tax services about your specific tax situation, please contact us. We are here to help you with your specific tax matters.

Disclaimer

This blog is intended for informational purposes only and does not constitute legal or tax advice. Please consult a qualified U.S. CPA or tax attorney for guidance specific to your situation.