If you own a US LLC and you are not a US person, you likely owe the IRS a Form 5472 and a pro forma 1120 every year, even if the business had no income. This guide explains who must file, what counts as a reportable transaction, the deadline, and how PowerLaunch's Run and Scale plans handle it for you.
Who must file
The rule applies to a foreign-owned, single-member LLC that is disregarded for US tax purposes. If you are not a US citizen or US tax resident and you own 100 percent of a US LLC that has not elected to be taxed as a corporation, this rule almost certainly applies to you. It also applies to LLCs owned by a foreign corporation or foreign partnership.
Multi-member LLCs and LLCs that elected S-corp or C-corp status follow different filing rules. If you are not sure which category your LLC falls into, ask a tax professional before you assume you are exempt.
What counts as a reportable transaction
The IRS wants to see any money movement between the LLC and its foreign owner, or between the LLC and other related parties. Reportable transactions include:
- Capital contributions you put into the LLC
- Loans between you and the LLC, in either direction
- Distributions or payments the LLC makes to you
- Payments for services, rent, or other transactions between the LLC and a related foreign party
You still have to file even if the only transaction was a single capital contribution to open a bank account. A filing obligation exists even in years with zero business activity, as long as the LLC is foreign-owned. Many founders assume "no income, no filing." That assumption is wrong for this specific form.
The deadline
Form 5472, filed together with a pro forma Form 1120, is due by 15 April for a calendar-year LLC. You can request an extension using the same process as a regular corporate return, but the extension has to be filed before the original deadline, not after. If 15 April falls on a weekend or holiday, check the IRS site for the adjusted date for that year.
There is no shortcut for late filing. The form has to go in on paper or through an authorized method, since it cannot be e-filed the same way a personal return can. This is one of the more procedural areas of US compliance, and small formatting mistakes are a common cause of rejected filings.
The penalty
The penalty for failing to file Form 5472, or filing it late or incomplete, is large. It applies per form, per year, and it applies whether or not the LLC owed any tax. The IRS can also keep adding further penalties if the failure continues after they send a notice. Because the number is set by statute and can change, check the current figure on the IRS site rather than relying on an old number you saw somewhere. The point to remember is that this is not a small fee. It is designed to be painful enough that founders take the filing seriously, even for a dormant LLC.
Common mistakes founders make
- Assuming a year with no revenue means no filing obligation
- Missing the fact that owner loans and personal expense payments both count as reportable transactions
- Filing the pro forma 1120 without the correct box checked at the top, which flags it as informational rather than a standalone return
- Missing the deadline because the founder was tracking their home country's tax calendar instead of the US one
- Not keeping records of contributions and distributions throughout the year, then scrambling to reconstruct them in April
How PowerLaunch handles this
The Launch plan covers formation only, so Form 5472 preparation is not included there. If your LLC is foreign-owned, you need at least the Run plan.
| Plan | 5472 and pro forma 1120 |
|---|---|
| Launch | Not included, formation only |
| Run | Business IRS tax filings included, plus transaction tracking so contributions and distributions are already recorded |
| Scale | Everything in Run, plus a dedicated bookkeeper who keeps the transaction history clean throughout the year |
On Run and Scale, the AI categorization and transaction tracking inside MyCG.AI log capital contributions, loans, and payments to the owner as they happen. That means when it is time to prepare the 5472, the numbers are already sitting in the platform instead of being rebuilt from bank statements in March. The Run plan includes a licensed tax professional consultation, so you have a qualified person reviewing the filing, not just software.
Scale adds a dedicated bookkeeper, which matters if your LLC has frequent owner transactions or multiple bank accounts feeding into the business. More transaction volume means more room for a category to be logged incorrectly, and a dedicated bookkeeper catches that before it becomes a filing problem.
A note on BOI reporting
Separately from Form 5472, founders sometimes ask about beneficial ownership reporting. Under the 2026 interim FinCEN rule, US-formed companies are currently exempt from that requirement. This is a different filing from the 5472, and the exemption status can change, so check FinCEN's site if you want the latest position.
What to do next
If your LLC is foreign-owned, do not wait until March to think about Form 5472. Move to the Run plan so your transactions are tracked all year and the filing is handled by a licensed tax professional, or go with Scale if you want a dedicated bookkeeper watching the books continuously.
You can compare plans and start at powerlaunch.solutions/signup. If you are not sure which plan fits your situation, or you want to walk through your specific transactions before the deadline, book a free 20-minute consultation at powerlaunch.solutions/book. It is a good use of 20 minutes given the size of the penalty for getting this wrong.
