Single-member LLC with a foreign owner — what you actually have to file

The IRS singles out foreign-owned single-member LLCs because the 2017 rule added annual related-party disclosure while preserving disregarded income-tax treatment. Before that change, those entities were also disregarded for reporting, leaving the IRS without visibility into related-party transactions, beneficial ownership, or fund flows involving non-US owners.

Since 2017, Treasury Regulation § 1.6038A-1 reclassifies foreign-owned disregarded entities as corporations specifically for Section 6038A reporting. That triggers an annual obligation to file Form 5472 to track every related-party transaction between the foreign owner and the LLC. The substantive tax treatment didn't change — the LLC is still disregarded for income tax. Only the disclosure obligation was added.

Almost certainly yes, if you meet all three:

1. You own (100%) a single-member US LLC. Multi-member LLCs file Form 1065 instead and aren't covered by this guide.
2. You are NOT a US person — not a US citizen, not a green card holder, not a US tax resident (substantial presence test, etc.).
3. Your LLC had at least one reportable transaction in the year — capital contributions in, distributions out, loans, payments to or from you, or any related-party transaction.

A reportable transaction is interpreted broadly. The list of things that count:

• Wiring USD into the LLC's bank account to fund operations.
• Paying yourself a distribution.
• Loan from you to the LLC (or LLC to you).
• Renting your home office to the LLC.
• Payments between the LLC and any other entity you control (a foreign company, another US LLC).
• Sales of property between you and the LLC.

In practice every active foreign-owned LLC files every year. The only realistic exception: an LLC that's truly dormant (no bank account opened, no money moved, no contracts) for the entire year.

You usually owe no tax on the Form 5472 package, but you file Form 5472 with a pro forma Form 1120 every year. The federal information return discloses related-party transactions, calculates no tax liability on those forms, carries a $25,000 missed-form penalty, and is due April 15 or October 15 with extension.

Form 5472 + pro forma Form 1120 (always required):

• Annual federal information return.
• Discloses related-party transactions.
• No tax liability calculated on these forms.
• $25,000 penalty per missed form per year.
• Due April 15 (October 15 with extension).

US federal income tax (usually $0):

• Foreign-owned single-member LLCs are disregarded for tax.
• If income is foreign-source and you have no US trade or business: $0 US federal income tax.
• If income is US-source effectively connected with a US trade or business: file Form 1040-NR personally; may owe US tax.
• Most ecommerce / SaaS / consulting LLCs serving non-US customers owe nothing.

State tax (depends on state):

• Wyoming, Delaware (out-of-state), Nevada, Florida, Texas, New Mexico: no state income tax on LLCs.
• California, New York, others: state-level tax may apply.
• Annual report fee: varies $60-$400/year by state.

Most foreign-owned single-member LLCs that sell internationally owe $0 in US federal tax but still must file Form 5472 + pro forma 1120 every year just to stay compliant.

The IRS penalty for not filing Form 5472:

• Base: $25,000 per form, per year. Per LLC.
• Continuation: another $25,000 per 30-day period after IRS notice, if not filed within 90 days.
• No statutory cap.
• Assessed automatically by IRS computer system, no human review.

Math examples:

• 1 LLC, 1 missed year: $25,000.
• 1 LLC, 3 missed years: $75,000.
• 2 LLCs, 3 missed years each: $150,000.
• 1 LLC, 1 missed year, still unfiled 12 months after the IRS notice: $25,000 + 10 × $25,000 = $275,000 (nothing extra for the first 90 days, then $25,000 for each 30-day period or part of one).

This is the single largest compliance risk most foreign LLC owners are unaware of. The penalty is for failing to FILE the disclosure return, not for failing to pay tax. Most foreign LLC owners owe zero US tax — the penalty applies anyway.

If you've missed prior years, file under DIIRSP (Delinquent International Information Return Submission Procedure) immediately. No outcome is guaranteed: the IRS may still assess a penalty during processing, and the reasonable-cause statement is then the basis for responding.

Profile 1: SaaS founder.

• Delaware LLC formed via Stripe Atlas.
• Owner abroad (e.g. UK, Singapore, Hong Kong).
• Selling SaaS via Stripe to global customers.
• Revenue $50K-$2M.
• US federal tax: $0 (no US trade or business, foreign-source services).
• Required filings: Form 5472 + pro forma 1120 federal, Delaware franchise tax $400. No BOI report — US-formed LLCs have been exempt from FinCEN BOI reporting since March 26, 2025. Total federal compliance with us: $149/year.

Profile 2: Ecommerce / dropshipping.

• Wyoming LLC.
• Owner in Vietnam, Mexico, etc.
• Shopify store with worldwide customers (no US warehouse).
• Revenue $20K-$500K.
• US federal tax: $0 (no US-source income).
• Required filings: Form 5472 + pro forma 1120 federal, Wyoming annual report $60, sales tax if nexus crossed. Total federal compliance with us: $149/year.

Profile 3: Consulting / agency.

• Wyoming or Delaware LLC.
• Owner in EU, India, Brazil.
• Consulting clients in US and abroad.
• Revenue $30K-$300K.
• US federal tax: $0 if consulting performed outside the US.
• Required filings: Form 5472 + pro forma 1120 federal, state annual report. With us: $149/year.

Profile 4: Stripe Atlas Delaware LLC, no revenue.

• Just formed.
• Funded $5K-$10K to open Mercury bank account.
• No customers yet.
• Required filings: Form 5472 + pro forma 1120 federal (the capital contribution counts as a reportable transaction). With us: $149/year.

The complete federal filing package has five parts every year.

1. Cover letter (1 page) identifying the filing.
2. Pro forma Form 1120 with entity info and "Foreign-Owned U.S. DE" stamp.
3. Form 5472 (Parts I, II, III, IV, V, VII).
4. Part V supporting statement listing each reportable transaction.
5. Reasonable Cause Statement (only if filing late under DIIRSP).

Total: 5-8 pages. Faxed as one package to the IRS Ogden PIN Unit at +1-855-887-7737.

No income tax calculation, no Schedule C / 1040, no payroll forms (unless you have US employees, which most foreign-owned LLCs don't).

File by April 15, or by October 15 with Form 7004, and send the package by fax or mail to the IRS Ogden PIN Unit. The section lists fax as the preferred route for a timestamped transmission receipt, mail as backup, and e-file as unavailable for foreign-owned DE filings.

When: April 15 of the year following the tax year. October 15 with Form 7004 extension.

How:

• Fax to +1-855-887-7737 (IRS Ogden PIN Unit) — preferred. Get a timestamped transmission receipt as transmission evidence.
• Mail to Internal Revenue Service, 1973 Rulon White Blvd, M/S 6112, Attn: PIN Unit, Ogden, UT 84201 — backup. Use certified mail with return receipt.
• E-file: NOT available for foreign-owned DE filings.

Who:

• Establish who is authorized to sign for the LLC. Ink signing the completed Form 1120 is a conservative workflow; Form 5472 has no separate signature block.

With us:

• Wizard (12 questions) → generated PDF → sign once on screen → accountant review → fax to IRS → timestamped receipt. ~15 minutes total. $149 Standard (ready in 5-7 business days) or $199 Express (within 3 business days) — same filing either way. IRS fax delivery included. +$99 per additional past year.

Many foreign owners discover Form 5472 a year or more after forming their LLC. The IRS provides DIIRSP — Delinquent International Information Return Submission Procedure — as the standard catch-up:

• File all missed years together as one package.
• Include a Reasonable Cause Statement.
• Fax to +1-855-887-7737.
• Expect no guaranteed outcome: the IRS may still assess a penalty during processing, and the statement is then the basis for responding.

Our DIIRSP packages:

• 2-year catch-up: $248 Standard / $298 Express (fax included).
• 3-year catch-up: $347 Standard / $397 Express (fax included).
• Reasonable cause statement auto-generated, accountant-reviewed.

Don't wait. Once the IRS issues a CP 215 notice for a missed year, DIIRSP is no longer available for that year and you're stuck with a much harder post-assessment appeal.

We do not cover cases outside single-member, foreign-owned, disregarded LLCs with no US tax liability — those need a CPA.

• Multi-member LLCs (need Form 1065, not 1120).
• LLCs that elected C-corp taxation via Form 8832 (need full Form 1120 with income/tax).
• LLCs with US-source effectively connected income (need Form 1040-NR personally, possibly more complex 1120 filing).
• LLCs with US employees (need payroll tax filings — Form 941, W-2, etc.).
• LLCs that own US real estate generating rental income (need 1040-NR and 8288 withholding).
• LLCs with Amazon FBA inventory in US warehouses (may be US trade or business; talk to a foreign-seller CPA).
• LLCs with complex international structures (foreign parents, multiple jurisdictions, cost-sharing agreements).

For the standard profile — solo foreign founder, US LLC, customers worldwide, $0 US tax — our service is the right fit. Anything outside that: get a CPA familiar with foreign owners.

Our 15-minute online filer handles everything for the standard foreign-owned single-member LLC case:

• 12-question wizard pre-tuned for non-US founders.
• Pre-fills the next year from your prior filing.
• Generates the complete package: cover letter, pro forma Form 1120, Form 5472 (all parts), Part V supporting statement, Reasonable Cause Statement (if late).
• In-portal canvas signature — no printing, scanning, or uploading needed.
• Accountant review on every package before submission.
• IRS fax delivery + timestamped receipt as transmission evidence.
• 100% money-back guarantee if we fail to submit.

Pricing:

• 1 tax year: $149 Standard / $199 Express (fax included)
• 2 tax years (DIIRSP catch-up): $248 Standard / $298 Express (fax included)
• 3 tax years (DIIRSP catch-up): $347 Standard / $397 Express (fax included)
• +$99 per additional past year beyond the base package