Why your LLC is "disregarded" but still files
A single-member LLC with no entity-classification election is a disregarded entity for US federal tax purposes. Its income and expenses are treated as belonging directly to its owner. The entity is, for income tax, invisible.
That produces a genuine paradox for founders: an invisible entity with a $25,000 filing penalty. The resolution is that disregarded status is about income tax, not about information reporting. For tax years beginning on or after 1 January 2017, a domestic disregarded entity wholly owned by one foreign person is treated as a domestic corporation separate from its owner for the purposes of the section 6038A reporting rules.
So: disregarded for computing tax, treated as a corporation for reporting. That is why your LLC files Form 5472 — and why, having no income tax return of its own to attach it to, it files a pro forma Form 1120 as a cover.
The obligation map
| Obligation | Who requires it | When | If ignored |
|---|---|---|---|
| Form 5472 + pro forma Form 1120 | IRS (federal) | Annually, 15 April | $25,000 statutory penalty per form, per year |
| EIN (Form SS-4) | IRS (federal) | Once, before filing | You cannot file, or open accounts |
| State annual report / franchise tax | State of formation | Annually — date varies by state | Late fees, loss of good standing, administrative dissolution |
| Beneficial ownership information | US Treasury (FinCEN) | Per the current rules | Civil and potentially criminal penalties |
| Owner's US income tax return | IRS (federal) | Only if US filing obligations arise | Interest and penalties on unpaid tax |
| Withholding filings (1042 / 1042-S) | IRS (federal) | Where withholdable payments are made | Penalties and liability for unwithheld tax |
| Sales tax registration | Individual states | Where economic nexus thresholds are met | Assessment of uncollected tax plus penalties |
| Home-country reporting | Your own tax authority | Per local rules | Local penalties |
Swipe the table sideways to see all columns
Not all of these apply to everyone. The first three apply to nearly every foreign-owned LLC. The rest depend on what the entity actually does.
Federal: Form 5472 and the pro forma 1120
This is the obligation with the number attached to it, and the reason most people find this site. The essentials:
- Who: a US LLC treated as a disregarded entity, wholly owned directly or indirectly by one foreign person.
- When it is triggered: in any tax year with a reportable transaction with a related party. Contributions, distributions, loans and owner-paid expenses all count.
- What is filed: Form 5472 attached to a pro forma Form 1120, with
FOREIGN-OWNED U.S. DEwritten across the top of the cover. - When: 15 April for a calendar-year filer, or 15 October with a timely Form 7004. Deadline detail →
- How: generally by mail or fax to the address the current instructions specify. This package usually cannot be e-filed.
- If missed: $25,000 per form, per year, with continuation amounts after IRS notice. Penalty detail →
"Zero revenue" is the trap
The commonest sequence: form the LLC, wire in some money, never make a sale, assume there is nothing to file. The wire itself is a capital contribution and therefore a reportable transaction. Why dormant rarely means nil →
The EIN, and why to start early
You cannot file Form 5472 without an EIN for the LLC, and the owner's personal tax number cannot be used in its place.
- How to apply: Form SS-4. Applicants with no SSN or ITIN generally cannot use the online system and apply by fax or mail.
- How long: fax is usually faster than mail, but both can take weeks. Plan in months, not days.
- Responsible party: the SS-4 asks who this is. For a single-member LLC it is normally the owner, who may have no US tax number — that is expected.
- Keep the letter. The CP 575 confirmation shows the exact legal name the IRS holds. Filing under a slightly different name creates matching problems. A replacement 147C letter can be requested if you lose it.
Note that an EIN is not an immigration status, not a tax residency, and not a licence to trade. It is a filing number.
State: annual reports and franchise tax
State obligations are entirely separate from federal ones and are enforced by a different authority. Filing your Form 5472 perfectly has no bearing on your state standing, and vice versa.
| State | Typical annual obligation | Notes |
|---|---|---|
| Delaware | Annual LLC franchise tax | Flat annual amount with a June due date; no annual report for LLCs. Registered agent required. |
| Wyoming | Annual report and licence tax | Due on the anniversary month of formation; minimum fee for small asset values. |
| Florida | Annual report | Due in the spring; late filing carries a substantial fixed penalty. |
| New Mexico | No annual report for LLCs | Registered agent still required; other obligations may apply. |
| Nevada | Annual list and business licence | Comparatively higher annual cost than the states above. |
Swipe the table sideways to see all columns
The consequence of ignoring state filings is different in kind from the federal one. States do not impose $25,000 penalties; they impose fees, then remove your good standing, then administratively dissolve the entity. A dissolved LLC with unfiled federal returns is a worse problem than either on its own.
Beneficial ownership reporting
The United States introduced a beneficial ownership information reporting regime under the Corporate Transparency Act, administered by FinCEN, requiring certain entities to report information about the individuals who own or control them.
The scope of this regime has been subject to litigation and to rule changes, including changes affecting whether and how entities formed outside the United States and their owners must report. Because the position has moved more than once, we deliberately do not state a rule here that may be out of date by the time you read it.
What to do about this one
Check the current requirements directly with FinCEN, or ask a US professional, at the point you need to act. Do not rely on a blog post — including this one — for whether a BOI report is currently due from your entity. This is a live area.
Does the LLC owe US income tax?
Separate question from Form 5472, and the answer depends on your income rather than on your entity. Because the LLC is disregarded, its income is your income for US tax purposes, and the question becomes whether you have US tax exposure.
The factors that generally matter:
- Whether you are engaged in a US trade or business. A fact-driven test about where activity actually happens — not simply about where the entity is registered.
- Whether income is US-source under the sourcing rules for services, sales, royalties and interest.
- Whether you have a US office, US employees, US agents or US inventory.
- Whether a tax treaty between your country and the United States affects the position.
Many non-US founders providing services remotely to US customers, with no US presence, conclude that they have no US federal income tax liability — while still having to file Form 5472. That combination is normal, and it is also exactly the combination that convinces people there is nothing to file.
Where to spend money on a professional
This is the question worth paying for — not the typing of a form. If you have US employees, hold inventory in the United States, work from there for part of the year, or take a treaty position, get a qualified opinion on your income tax exposure. The Form 5472 mechanics are straightforward by comparison.
Other things that can apply
- Withholding on payments (Forms 1042 and 1042-S). If the entity makes certain payments of US-source income to non-US persons, withholding and reporting can be required.
- Employment taxes. Hiring anyone in the United States brings payroll registration, withholding and quarterly filings.
- Sales tax. Selling goods, and some digital services, into US states can create economic nexus and a registration obligation. This is state by state and independent of anything federal.
- Form W-8BEN or W-8BEN-E. Not filed with the IRS, but given to payers to certify foreign status. Payment processors commonly ask.
- FBAR and FATCA. Generally obligations of US persons, so usually irrelevant to a non-US owner — but relevant if any owner or signatory is a US person.
- Final-year filings. Dissolving the LLC does not remove the obligations for the final short year, which frequently includes a final distribution.
Reporting in your own country
Owning a US company is usually a reportable fact where you live. The specifics vary enormously, but the recurring themes are:
- Controlled foreign company rules that may attribute the entity's profits to you locally, whether or not you distributed them
- Foreign asset or shareholding disclosures on your personal return
- Local corporate tax exposure where the company is effectively managed from your country
- Treaty positions that can relieve double taxation but usually have to be claimed
A US LLC is not a way to make income invisible at home, and it is not usually a way to reduce local tax. Founders who assume otherwise tend to find out later. Ask a local adviser what your own country expects.
A single annual calendar
-
January — collect
Download the full year's statements. List every transfer between you and the entity, and every entity cost you paid personally.
-
February — total
Group amounts by category and note the year-end balance for the total assets line.
-
March — draft
Prepare the Form 5472 and pro forma Form 1120 cover. Confirm your state's obligation and its date.
-
April — file federally
Send the package with tracking by 15 April, or file Form 7004 for an extension to October.
-
Your state's month — file at state level
Delaware's June franchise tax, Wyoming's anniversary report, Florida's spring report — whichever is yours.
-
Any time — check the live items
Beneficial ownership requirements and sales tax thresholds change. Verify rather than assume.
Start with the one that carries the penalty
Draft your Form 5472 and pro forma 1120
Ten minutes of plain questions, then the whole completed document on screen for free. Decide about the print-ready files afterwards.
Prepare my Form 5472Next filing deadline: — · — days
Questions
What does a foreign-owned single-member LLC have to file each year?
At federal level, the usual annual package is a Form 5472 attached to a pro forma Form 1120, filed for each tax year in which there was a reportable transaction with a related party. At state level, the LLC will usually owe an annual report or franchise tax filing in its state of formation, and in any state where it is registered to do business. Depending on activity there may also be beneficial ownership reporting, employment tax filings, sales tax registration and withholding obligations.
Does a foreign-owned LLC pay US income tax?
It depends on whether the income is subject to US tax, not on the LLC's existence. A single-member LLC is disregarded, so its income is treated as the owner's. A non-US owner with no US trade or business and no US-source income of the relevant kinds may owe no US federal income tax, while still having to file Form 5472. Where there is US-source income, a US trade or business, US employees or a US office, the analysis changes and personal filing obligations such as Form 1040-NR can arise. This is the point at which a US tax professional should be involved.
Do I need an EIN for a foreign-owned LLC?
Yes, in practice. The EIN is required on Form 5472 and on the pro forma Form 1120, and banks and payment processors ask for it. A foreign owner without an SSN or ITIN generally cannot use the online application and applies with Form SS-4 by fax or mail, which can take several weeks.
Is a Delaware LLC treated differently from a Wyoming LLC for Form 5472?
No. Form 5472 is a federal requirement and applies identically regardless of the state of formation. What differs by state is the state-level obligations: annual report requirements, franchise tax amounts, deadlines and public disclosure. Delaware charges an annual franchise tax for LLCs with a June deadline; Wyoming requires an annual report tied to the formation anniversary. Neither affects the federal position.
What happens if I just abandon the LLC and stop filing?
Abandonment is not dissolution. An LLC that is not formally dissolved continues to exist under state law, continues to accrue state fees and penalties, and remains subject to federal information reporting for years in which it had reportable transactions. Unfiled Forms 5472 remain unfiled. If you no longer want the entity, dissolving it properly and completing the final-year filings is the route that actually ends the obligations.
My formation agent said there was nothing to file. Were they wrong?
Formation agents register entities; most are not tax professionals and their service usually does not include tax advice. Some do mention Form 5472, many do not, and some say only that "no tax is due" — which can be true while a filing obligation still exists. Reliance on a non-professional generally does not by itself establish reasonable cause for a missed filing. Check your own position rather than inferring it from silence.
Scope & limitations
This page is general educational information and is not tax, legal or accounting advice. It outlines obligations that commonly apply to a single-member LLC owned by one non-US person; it cannot determine which apply to you. State requirements, fee amounts, beneficial ownership rules and sales tax thresholds change frequently and vary by jurisdiction.
Content reflects the IRS Form 5472 and its instructions as reviewed in 2026. Verify federal requirements on IRS.gov, state requirements with the relevant state authority, and beneficial ownership requirements with FinCEN. Consult a qualified US tax professional about your own circumstances.