IRS Form 5472 and Form 1120: Guide for Non-Resident LLCs

⚠️ Mandatory $25,000 IRS Penalty: Under Internal Revenue Code Section 6038A, failure to file Form 5472 and Form 1120 on time, or submitting incomplete information, incurs an automatic statutory fine of $25,000 per violation, with additional $25,000 penalties every 90 days of continued non-compliance.

What Triggers a Form 5472 Requirement?

You must file Form 5472 if your foreign-owned LLC engaged in any reportable transaction during the tax year. Reportable transactions include:

• Transferring money from your personal account into the LLC bank account (capital contribution).
• Withdrawing money from the LLC bank account to yourself (owner distributions).
• Loans made to or received from the LLC.
• Payment of business fees or expenses by the foreign owner on behalf of the company.

Even if your LLC conducted zero sales, if you paid state formation fees or opened a bank account with initial capital, a reportable transaction occurred.

How to File Form 5472 & 1120

1. Prepare Form 1120: Fill out the header details with the LLC name, address, and EIN. Write "Foreign-owned U.S. DE pursuant to TD 9796" across the top.
2. Prepare Form 5472: Disclose the foreign 25%+ owner (Part II) and the total dollar amounts of money moved into or out of the entity (Part IV).
3. Submit via Fax or Mail: Foreign disregarded entities cannot e-file through standard consumer software. They must be submitted via specialized fax directly to the IRS Foreign Processing Unit in Ogden, UT.
4. Filing Deadline: Due April 15th following the close of the calendar tax year.