Form 5472 in Plain English
If a foreign person owns a US company, the IRS usually wants Form 5472 every year — even if the company did nothing. Here is what it is and why missing it is so costly.
What it is
Form 5472 is an IRS information return — a form that reports facts rather than calculating a tax bill. It reports certain dealings between a US company and its foreign owner or other related foreign parties: money you put in, money you took out, loans, and similar transactions. It exists so the US government can see how money flows between a US business and the people abroad who control it. Those related foreign parties can include a foreign parent company or another business owned by the same foreign owner, not just you as an individual.
If you are a non-US person who owns a US company — most commonly a single-member LLC — you generally must file Form 5472 every year, together with a mostly blank "pro-forma" Form 1120 that acts as a cover page. This is true even if your company made no money, had no activity, or simply sat dormant. Forming the LLC counts as a reportable event all by itself.
Why you should care
Form 5472 is easy to overlook precisely because it applies even when nothing is happening. Many founders assume a company with zero income owes nothing and skip filing — but this requirement is about the ownership relationship, not about profit. It is also separate from any income tax you may or may not owe. Whether you actually owe US income tax is a different question, decided by rules about US business activity and any tax treaty between the US and your country.
The mechanics add to the risk. As of 2026 there is no way to file Form 5472 electronically — it goes to the IRS by mail or fax only — which makes it easy to forget, misplace, or fill in wrong. You also cannot file it without an EIN for the company, so the two go hand in hand.
What happens if you ignore it
This is the part that catches people. The penalty for filing late, filing incorrectly, or not filing at all is steep: at least $25,000 per form (as of 2026). If the IRS sends a notice and you still do not file within the window it gives, the penalty grows by another $25,000 for each additional 30 days. And there is no statute of limitations on it — meaning the IRS can come back years later for a form you never filed.
Founders who ignored this for a few dormant years can face tens of thousands of dollars in penalties on a company that never earned a cent. If that has already happened to you, there is a path called reasonable-cause abatement that can reduce or remove penalties in some cases — but it is far better, and far cheaper, not to miss the form in the first place.
What we handle for you
We prepare and file Form 5472 and the pro-forma 1120 properly, on time, every year — and if you have missed prior years, we handle the catch-up filings and the penalty-abatement request. It is a core part of our e-commerce and international tax work. If you own a US company as a foreign owner, talk to us before the deadline, not after.