Form 1120 for a Disregarded Entity (Foreign Owner)

A disregarded entity (DE) is a business entity (usually an LLC) that has just one owner and hasn't elected to be taxed as a corporation. The IRS "disregards" the entity for federal income tax purposes — meaning income and deductions flow through to the owner directly, as if the entity didn't exist.

For a US LLC owned by one non-US person, the LLC is automatically a disregarded entity unless you affirmatively elect C-corp or S-corp taxation by filing Form 8832 (most foreign owners shouldn't do this).

The disregarded-entity status means:

• The LLC has no separate US income tax liability.
• Income/losses flow to the owner's personal tax situation.
• For a foreign owner with no US trade or business and no US-source income, this typically means $0 in US federal income tax.
• The LLC still legally exists at the state level (Wyoming, Delaware, etc.) as a separate entity for liability protection.

A disregarded entity files Form 1120 only when it is a foreign-owned single-member LLC using the pro forma cover for Form 5472. Since 2017, these entities are treated as separate domestic corporations solely for Form 5472 reporting, not full corporate taxation.

The exception is foreign-owned single-member LLCs treated as DEs. Since 2017, Treasury Regulation § 1.6038A-1 says these entities are treated as separate domestic corporations "solely for purposes of" Form 5472 reporting under IRC § 6038A. So they file Form 5472 — and the only way the IRS accepts Form 5472 is as an attachment to Form 1120.

The 1120 is filed "pro forma" — mostly empty — as a procedural cover sheet. Filling it in fully would incorrectly suggest your LLC is a real C-corp.

The procedural status (file 1120 as the envelope for 5472) does not change the substantive tax status (LLC remains disregarded, owes no corporate tax).

Before 2017, foreign-owned single-member US LLCs weren't required to file Form 5472. The IRS treated them purely as disregarded entities with no federal filing obligation. As a result, foreign owners could form a US LLC, move large amounts of money through it, and never disclose anything to the US government.

This became a known transparency loophole — non-US persons could use US LLCs to obscure beneficial ownership for tax avoidance, money laundering, or sanctions evasion.

In December 2016, the IRS issued final regulations under § 1.6038A-1 extending §6038A reporting to foreign-owned domestic disregarded entities, effective for tax years beginning January 1, 2017. The regulation specifically created the "pro forma 1120 as attachment vehicle" approach because there was no existing form for disclosure-only filings.

Since then, every foreign-owned single-member US LLC has had to file Form 5472 + pro forma 1120 annually. Penalty: $25,000 per missed form per year under IRC § 6038A(d).

The special IRS Form 5472 instructions require only the foreign-owned U.S. DE’s name, address, item B (EIN), and applicable item E boxes on Form 1120 page 1. Item E contains Initial return, Final return, Name change and Address change—not an amended-return box. Write "Foreign-owned U.S. DE" across the top.

Items C and D and Schedule L are not required by that special pro forma instruction. Do not treat an omitted optional cover field as permission to leave Form 5472 line 1c blank. See Form 5472 line 1c and total assets.

For signing, identify the authorized signer. Signing the completed cover in ink, then scanning it for fax, is a conservative workflow; see signature methods and submission routes.

"Solely for purposes of" means the LLC is treated as a corporation only for Section 6038A reporting. It does not create U.S. corporate income tax, change disregarded status, require estimated payments, create employee withholding obligations, or trigger 1120-W estimated tax requirements.

It does NOT:

• Make the LLC subject to US corporate income tax.
• Change the LLC's disregarded status for other tax purposes.
• Require the LLC to file estimated tax payments.
• Create employee withholding obligations.
• Require quarterly returns.
• Make the LLC liable for accumulated earnings tax or personal holding company tax.
• Trigger 1120-W estimated tax requirements.

The LLC is treated as a corporation ONLY to satisfy the procedural requirement that Form 5472 attach to a tax return. For everything else (income tax liability, owner's personal taxation, state tax treatment), the LLC stays a disregarded entity.

Foreign-owned DE filings go ONLY to the IRS Ogden PIN Unit:

• Fax: +1-855-887-7737 (preferred — fast, with a timestamped transmission receipt as transmission evidence).
• Mail: Internal Revenue Service, 1973 Rulon White Blvd, M/S 6112, Attn: PIN Unit, Ogden, UT 84201 (retain mailing and delivery evidence).

Do NOT send to the regular Form 1120 processing addresses listed in the standard 1120 instructions. Those addresses are for real corporate returns and your pro forma filing will be misrouted or treated as a real corporate filing — which can trigger collection notices and tax liability for tax you don't actually owe.

The Ogden PIN Unit is the dedicated team within IRS Ogden that handles foreign-owned DE filings. The "Foreign-Owned U.S. DE" stamp on the 1120 is what tells them to route to this team.

If you actively elect C-corp taxation by filing Form 8832 (Entity Classification Election), your LLC is no longer a disregarded entity. It becomes a real US corporation that owes corporate income tax (currently 21% federal flat rate) on its worldwide income — including all foreign-source revenue.

For most foreign owners, this is a bad idea:

• You'd owe US tax on profits earned abroad selling to non-US customers.
• You'd need to file full Form 1120 (not pro forma) with income, deductions, and tax calculation.
• Distributions to you would be dividends — potentially subject to 30% US withholding (or treaty rate).
• Your US tax bill could go from $0 to substantial.

Keep the default disregarded entity classification unless you've consulted a US tax professional about a specific reason to elect C-corp status (e.g. you're optimizing for a future US sale of the entity).

S-corp taxation is not available for a US LLC owned by a foreign person. S-corporations require all owners to be US persons, so a foreign-person owner disqualifies the election, and the IRS will reject it or unwind improper S-corp returns.

If you (a foreign person) try to elect S-corp status for your US LLC, the IRS will reject the election. If you somehow filed S-corp returns despite ineligibility, the IRS would unwind it and assess back taxes.

Ignore S-corp paths entirely if you're a foreign owner. Disregarded entity (default) or C-corp election (Form 8832) are your only legitimate options.

Common confusion starts with assuming disregarded means no filings, but foreign-owned DEs still file Form 5472 plus pro forma 1120 annually. The pro forma 1120 is only a procedural vehicle, and a full 1120 is wrong unless the LLC elected C-corp status.

"If I file Form 1120, am I a corporation now?" — No. Pro forma 1120 is a procedural vehicle. Your LLC stays disregarded.

"My CPA says I need a real Form 1120 with income." — Get a second opinion. Most CPAs see foreign-owned DE filings once or twice in their career. A full 1120 is wrong unless you've elected C-corp via Form 8832.

"Can I just file Form 5472 by itself?" — No. The IRS requires it to be attached to a tax return. Pro forma 1120 is that attachment.

"My LLC had no transactions — am I still disregarded?" — Yes, the disregarded status is independent of activity. Whether you file Form 5472 depends on whether you had reportable transactions, but the entity classification doesn't change.

Form5472 Prep generates the complete disregarded entity filing package automatically:

• Cover letter.
• Pro forma Form 1120 with "Foreign-Owned U.S. DE" stamp, entity info, signature line.
• Form 5472 (Parts I, II, III, IV, V, VII).
• Part V supporting statement listing each reportable transaction.
• Reasonable Cause Statement (if filing late under DIIRSP).

You answer 12 questions in the wizard, sign once on screen (the signature embeds into every required signature box), an accountant on our team reviews everything, and we fax to the IRS Ogden PIN Unit. You get the timestamped receipt as transmission evidence.

• 1 year: $149 Standard / $199 Express (fax included)
• 2 years (DIIRSP): $248 Standard / $298 Express (fax included)
• 3 years (DIIRSP): $347 Standard / $397 Express (fax included)

100% money-back guarantee if we fail to submit.