Form 5472 for foreign-owned single-member LLCs: who files, deadlines, penalties

If you are neither a US citizen nor a US resident and you own a US single-member LLC, the standard setup for many Amazon sellers, you almost certainly must file Form 5472, attached to a pro forma Form 1120, by April 15 each year. It is an information return, not a tax bill: it is due even if the LLC owes no US income tax, and missing it carries a $25,000 penalty (IRC §6038A(d)).

Who must file

Since tax year 2017, a US disregarded entity that is wholly owned by one foreign person is treated as a corporation for Form 5472 purposes (Treas. Reg. §1.6038A-1(c)(1); IRS: Instructions for Form 5472 — “Foreign-owned U.S. DE”). In plain terms, you must file if all of this is true:

• your LLC is registered in any US state (Wyoming, Delaware, Florida — the state does not matter);
• it has one owner, and that owner is a foreign person (an individual who is neither a US citizen nor a US resident, or a foreign company, partnership, trust or estate);
• the LLC has not elected to be taxed as a corporation — the default for a single-member LLC.
• the LLC had at least one reportable transaction with you or another related party during the year (money you put in or take out counts; see below).

The same form is also filed by US corporations that are 25%-or-more foreign-owned, but this guide focuses on the disregarded LLC — the common Amazon-seller case.

To file at all, the LLC needs an EIN (Employer Identification Number). If you don't have one yet, you apply once with Form SS-4.

What counts as a reportable transaction

Form 5472 reports transactions between the LLC and its foreign owner (and other related parties) during the year (Instructions for Form 5472). For a disregarded LLC that includes, among other things:

• money you put into the LLC — capital contributions, topping up the account to buy inventory;
• money you take out — distributions of profit to your personal account;
• loans in either direction, and their repayment;
• amounts paid or received in connection with forming, dissolving or selling the entity.

For a typical Amazon seller, simply funding the LLC in January and taking profit out in December already makes both ends of the year reportable. In practice, most seller LLCs have at least one reportable transaction a year; if yours had none, discuss it with a tax professional before deciding not to file.

The deadline: April 15, extension to October 15

The pro forma Form 1120 with Form 5472 attached is due by the 15th day of the 4th month after the end of the tax year — April 15 for a calendar-year LLC (Instructions for Form 1120).

You can extend the filing deadline by six months — to October 15 — with Form 7004. Two things to know about the extension:

• Form 7004 extends the time to file, not the time to pay. For a disregarded LLC the pro forma 1120 itself typically shows no tax due, so in practice the extension is about protecting you from the late-filing penalty on Form 5472.
• The extension must itself be requested by April 15.

The key federal deadlines for sellers, with weekend shifts applied, are on our free tax calendar.

How to file: fax or mail only

A foreign-owned disregarded LLC cannot e-file this return. Per the Form 5472 instructions, you send the pro forma 1120 with 5472 attached either:

• by fax to 855-887-7737, or
• by mail to the IRS service center in Ogden, Utah (the current mailing address is in the instructions).

On the pro forma 1120, write “Foreign-owned U.S. DE” across the top. Per the Form 5472 instructions, only the name and address, the EIN (item B), and item E — the initial-return / final-return / name-change / address-change checkboxes on page 1 — need to be completed; the substance lives in the attached 5472.

The $25,000 penalty

The penalty for not filing Form 5472 on time — or filing it substantially incomplete — is $25,000 per form, per year (IRC §6038A(d)(1)). If the failure continues for more than 90 days after the IRS notifies you, an additional $25,000 accrues for each further 30-day period (§6038A(d)(2)). The reporting corporation must also keep records sufficient to establish the accuracy of the return (Treas. Reg. §1.6038A-3).

Two points sellers often miss:

• “No income” does not mean “no filing.” The obligation is triggered by reportable transactions, not by profit.
• The penalty applies per year, so an LLC that has never filed can face it for each open year.

Does the LLC itself owe US income tax?

That is a separate question. A disregarded LLC's income is taxed to its owner, and whether a non-resident owner owes US income tax depends on the specific facts — residency, tax-treaty position, and whether the activity produces income effectively connected with a US trade or business. This article does not answer that question for you; discuss your situation with a qualified tax professional.

Where Taxller fits

Upload your Amazon settlement reports and Taxller turns them into double-entry books for your LLC. Money you put in or take out, and loans between you and the LLC, are recorded as owner transactions and kept separate: these are the transactions Form 5472 asks about. In April you or your preparer start from records that already exist, not from twelve months of bank statements; Taxller does not prepare or file the return. The filing calendar is free.

Sources

• IRS — About Form 5472
• IRS — Instructions for Form 5472
• IRC §6038A — Information with respect to certain foreign-owned corporations
• Treas. Reg. §1.6038A-1
• IRS — About Form 7004