Guide 02 · The filing founders meet too late
Form 5472, explained before it costs you $25,000
A single-member US LLC owned by a non-US person owes the IRS an information return every year — even in a year when it earned nothing and owes no tax. Missing it starts at a $25,000 penalty per form, per year. This is the page to read in your first month, not your thirteenth.
Why an LLC files a corporate-looking form
For most US tax purposes a single-member LLC is a "disregarded entity" — it has no tax return of its own. Since 2017, Treasury regulations (Treas. Reg. §1.6038A-1) treat a foreign-owned disregarded entity as a corporation for one specific purpose: reporting transactions with its foreign owner and other related parties. That is why the filing looks odd — Form 5472 (the information return) attached to a pro forma Form 1120 (a mostly-blank corporate return that exists only to carry it, marked "Foreign-owned U.S. DE" across the top). The two forms travel together; filing one without the other counts as not filing.
Who files, and what counts
- Who: every single-member (or otherwise disregarded) US LLC with a foreign owner, for each year it has reportable transactions. Multi-member LLCs and LLCs that elected corporate taxation have their own filing routes — ask a preparer which applies to you.
- What counts as a reportable transaction: money or property moving between the LLC and its foreign owner or related parties — capital contributions, distributions, paying the owner's expenses from the LLC (or the reverse), loans, and amounts the owner spends to set the LLC up. Ordinary formation and operating costs paid on the LLC's behalf are the classic example founders miss.
- What it is not: it reports transactions, not profit. There is no tax calculated on Form 5472, and filing it does not by itself create a US tax bill.
Deadlines and the penalty
| Item | Fact |
|---|---|
| Due date | April 15 for a calendar-year LLC (with the pro forma 1120). |
| Extension | Form 7004 filed by April 15 extends the deadline to October 15. The extension moves the deadline; it does not forgive a filing that never happens. |
| How filed | By mail or fax to the IRS address in the Form 1120 instructions for foreign-owned disregarded entities — this package cannot be e-filed through standard channels. |
| Penalty | $25,000 per form, per year for failing to file, filing late, or filing substantially incomplete (IRC §6038A). Additional $25,000 amounts can apply for each 30-day period a failure continues after the IRS notifies you. |
Who prepares it — honestly
Sethhost is not a tax firm, and this guide is not tax advice. Form 5472 preparation belongs to a qualified tax preparer or your own CPA. Sethhost's published position, stated in the service agreement (§13.4), is that preparer-delivered tax filing is an add-on that is waitlist-only until that preparer engagement is in place. What Sethhost does from day one — and this part is included in Hosted — is put the Form 5472 obligation on your compliance calendar with its deadline, and explain it in plain language, so the date never ambushes you. The calendar's reminders are best efforts, not a guarantee; the filing obligation itself is yours.
If you formed an LLC in a prior year and have never filed, do not wait for a notice: talk to a tax preparer about voluntary late filing before the IRS writes first. Sources: IRS, "About Form 5472" and the Form 5472 instructions (irs.gov); IRC §6038A.
Sethhost is not a law firm and does not provide legal or tax advice. This guide is general information, not advice about your situation. Tax filings are performed by a qualified tax preparer engaged for that service or by your own CPA; legal questions go to your own attorney.
Reading is step one. The paperwork is the rest.
Sethhost handles formation paperwork, the EIN workflow, registered agent service, official mail handling, your website, a US number, and a compliance calendar — one company, one bill. Launch is $499 one-time; Hosted is $79 per month; the state filing fee is always shown separately.