Form 5472
Form 5472 is an IRS information return required when a US corporation is 25% or more foreign-owned, or when a foreign person owns a US single-member LLC. It reports transactions between the company and its foreign owner: capital contributions, loans, payments back and forth. No tax is due with it, but the penalty for not filing is $25,000, and a foreign-owned LLC must attach it to a pro forma Form 1120 even when the LLC owes no US tax at all.
This form is the most expensive surprise in international ecommerce. The typical case: a seller in the UK or Pakistan forms a Wyoming LLC to sell on Amazon US, is told correctly that a single-member LLC is "disregarded" for tax, and concludes no filing is needed. Wrong. The disregarded entity still owes Form 5472 every year it has reportable transactions with its owner, and simply funding the LLC's bank account counts. Miss it and the penalty starts at $25,000 per year, per form.
Filing is not hard once you know: a pro forma 1120 cover page, the 5472 itself, and a record of owner transactions, which clean books produce automatically. We cover the whole requirement in our Form 5472 guide, and compliance for foreign-owned sellers, this form included, is the core of our international sellers practice.
Where this shows up in our work
This isn’t textbook material for us; it’s the day-to-day of keeping seller books right. See how we handle it in practice:
International Sellers→Related terms