- 🎓 Licensed CPAs • 15+ Years • 500+ Foreign-Owned Filings
Foreign-Owned LLC Tax Preparation — Prevent $25K IRS Penalties
Foreign-owned U.S. LLC? If so, it is important to know that IRS Form 5472 noncompliance can trigger significant penalties. Because of this, proper filing and documentation are essential. In addition, our international tax specialists manage every part of the compliance process, including Form 5472 preparation, Form 1120 Pro Forma filings, “Engaged in U.S. Trade or Business” (ETBUS) evaluations, FDAP income reviews, and tax treaty optimization.
Which Service Do You Need?
Different entity types have different filing requirements. Find your situation below:
🏢 Single-Member LLC (Disregarded Entity)
You will need: Form 5472 + Form 1120 Pro Forma
- You are a foreign person owning 100% of a U.S. single-member LLC
- Your LLC is treated as a disregarded entity (default classification)
- Your LLC had reportable transactions (capital contributions, loans, payments, etc.) with a foreign related party
- You're from India, UAE, UK, Canada, Germany, Australia or any other country
- Penalty for not filing Form 5472: $25,000 per year (plus $25,000 every 30 days after IRS notice)
🤝 Partnership / Multi-Member LLC
You will need: Form 1065 + Form 8804 + Form 8805
- Multi-member LLC taxed as partnership
- Partnership with foreign partners
- Need to withhold tax on foreign partners' distributive share
- Must issue Form 8805 to each foreign partner
- Complex ETBUS and effectively connected income rules
🏛️ C-Corporation (Foreign Owned)
You will need: Form 1120 + Form 5472
- C-Corporation with 25%+ foreign ownership
- Must file full Form 1120 corporate return
- Must file Form 5472 for reportable transactions
- Different withholding rules than disregarded entities
- Transfer pricing considerations for related party transactions
🆔 Need an ITIN?
- Foreign individuals without a Social Security Number
- Required to file U.S. personal tax returns (Form 1040-NR, etc.)
- Often needed when you, as an individual owner, must sign or file a U.S. return connected to your entity
- Your LLC or corporation uses an EIN, but you may still need an ITIN as the foreign owner
- We're IRS-authorized Certifying Acceptance Agents (CAA)
❓ Not Sure Which Entity Type?
- "How do I know if I'm disregarded vs partnership?"
Single member = disregarded. Multiple members = partnership (unless elected otherwise). Read guide →
- "What's the difference between 1120 Pro Forma vs full 1120?"
Pro forma is simplified for disregarded entities. Full 1120 is for corporations. See comparison →
- "Do I need Form 8804 or Form 5472?"
Partnerships use 8804. Disregarded entities and corporations use 5472. Read guide →
Need Help Deciding?
Get a free consultation to determine which entity type and filing requirements apply to your situation.
Country-Specific Tax Guides for Foreign-Owned Entities:
Transparent Pricing by Entity Type
Clear, upfront pricing. No hidden fees. See complete service details →
- Most Popular
Single-Member LLC
Form 5472 + 1120 Pro Forma
Starting at
complete filing
Complete Form 5472 & 1120 Pro Forma preparation with ETBUS determination, related party analysis, FDAP review, tax treaty optimization, and 12-month IRS support.
Common Add-Ons:
State Tax Filing (+100), State Annual Compliance ( +75)
💯 Proven track record of audit-free filings
Partnership / Multi-LLC
Forms 1065 + 8804 + 8805
$450
starting price
Complete partnership return (1065), withholding tax filing (8804), foreign partner statements (8805), K-1 preparation, ECI analysis, and withholding coordination.
Common Add-Ons:
Each additional partner (+$75) • Complex allocations (+$300-$500) • State Filing ($75)
💯 Proven track record of penalty-free filings
C-Corporation
Forms 1120 + 5472
starting price
Complete corporate return (1120), Form 5472 for related parties, transfer pricing analysis, foreign tax credits, dividend withholding planning, and state returns (1 state).
Common Add-Ons:
Transfer pricing study (+$1,500+) • Multiple 5472 forms (+$300 each) • Additional state returns (+$100-$300)
💯 Proven track record of penalty-free filings
ITIN Application
New ITIN or renewal. Includes W-7 prep, document certification (CAA services), IRS submission & tracking.
Annual Compliance
Year-round support: All filings, Bookkeeping, consultations, unlimited email support, priority IRS response. Price varies by entity complexity.
Compare to Big 4 firms: $3,500-$7,000 for same services • DIY risk: Serious compliance errors leading to penalties
Questions? See pricing FAQ or contact us directly
Complete Foreign-Owned Entity Tax Services
Expert preparation for all foreign-owned business structures – from disregarded entities to partnerships to corporations. Plus ITIN application services for foreign individuals.
Form 5472 & 1120 Pro Forma Filing for Foreign-Owned LLCs
Foreign-owned single-member LLCs, which are treated as disregarded entities, must file Form 5472 along with Form 1120 Pro Forma whenever they have reportable transactions with foreign related parties. Because most tax software does not support these forms, we often see serious mistakes in DIY filings. As a result, many owners face the $25,000 Form 5472 penalty. Fortunately, our CPAs have completed more than 500 filings with a strong record of penalty-free compliance.
Form 1120 Pro Forma is a simplified information return for disregarded entities. In other words, it reports activity but does not calculate tax. By contrast, the full Form 1120 is used by C-Corporations to calculate corporate tax liability. The Pro Forma version is filed only to attach Form 5472. Importantly, the $25,000 penalty applies to Form 5472, not the 1120 Pro Forma.
- Form 5472 preparation with complete reportable transaction documentation
- Form 1120 Pro Forma preparation (required attachment for 5472)
- "Engaged in Trade or Business" (ETBUS) determination and supporting memo
- FDAP (Fixed, Determinable, Annual, Periodical) income classification
- Related party transaction analysis with transfer pricing considerations
- Foreign ownership disclosure and certification
- Reasonable cause penalty relief memos for late filings
- IRS examination support and correspondence handling
Learn More:
Partnership Withholding Tax - Form 8804 & 8805
Partnerships and multi-member LLCs with foreign partners must follow specific IRS withholding requirements. In these situations, the partnership must withhold tax on each foreign partner’s distributive share of effectively connected income (ECI), file Form 8804 for quarterly payments, and issue Form 8805 to every foreign partner each year. If these steps are missed, penalties can reach 5% of the unpaid tax per month, up to a 25% maximum, and the partnership may still be responsible for any unpaid withholding.
Partnerships do not pay tax at the entity level. However, they must withhold on the foreign partner’s share of ECI under IRC Section 1446. This rule exists because foreign partners must meet their U.S. tax obligations. If withholding is not done, the partnership becomes liable for the tax as well as the related penalties and interest.
- Form 1065 partnership return preparation with complete schedules
- Form 8804 quarterly withholding tax calculations and payments
- Form 8805 preparation and distribution to each foreign partner
- Schedule K-1 preparation for all partners (domestic and foreign)
- Effectively connected income (ECI) analysis and allocation
- ETBUS determination for partnership activities
- Withholding exemption certificates (if applicable)
- State partnership return preparation and withholding compliance
Learn More:
Foreign-Owned Corporation - Form 1120 & 5472
Foreign-owned C-Corporations must file both a full Form 1120 corporate tax return and Form 5472 when there are reportable transactions with related foreign persons. Because the IRS imposes different penalties for each form, Form 1120 carries percentage-based penalties of 5% per month (up to 25% of unpaid tax), while Form 5472 carries a flat $25,000 penalty for noncompliance. In addition, these filings often require careful transfer pricing analysis, foreign tax credit calculations, and dividend withholding planning
Form 1120 Pro Forma is used only by disregarded entities and does not calculate tax. By contrast, the full Form 1120 is required for corporations to compute their taxable income. The Pro Forma version exists solely to attach Form 5472. Importantly, the $25,000 penalty applies to Form 5472, not the 1120 Pro Forma
- Complete Form 1120 corporate tax return with all required schedules
- Form 5472 for each foreign related party with reportable transactions
- Related party transaction documentation and transfer pricing analysis
- Foreign tax credit calculations (Form 1118) if paying foreign taxes
- Dividend withholding planning and treaty benefit analysis
- Subpart F income analysis (if CFC considerations apply)
- State corporate tax returns and apportionment
- Estimated tax calculations and payment coordination
Learn More:
ITIN Application & Renewal Services
Foreign individuals without a Social Security Number need an ITIN (Individual Taxpayer Identification Number) to file U.S. tax returns, open bank accounts, and comply with reporting requirements. We handle the entire ITIN application and renewal process, including document certification.
No – ITINs require mailing original documents or certified copies to the IRS, which can take 7-11 weeks. We’re IRS-authorized Certifying Acceptance Agents (CAA), so we can certify your documents without you mailing originals, and we ensure your application is complete to avoid rejections and delays.
- ITIN application preparation (Form W-7) for new applicants
- ITIN renewal for expired numbers (issued before 2013 or unused 3+ years)
- Certifying Acceptance Agent (CAA) services - no need to mail original documents
- Dependent ITIN applications (spouse, children)
- ITIN application with tax return filing (required if filing return)
- Document certification and authentication
- Application tracking and IRS follow-up
- Rush processing assistance for urgent situations
Learn More:
Foreign Investor Entity Formation
Not sure where to form your LLC or corporation? Privacy (Wyoming), investor expectations (Delaware), and your real business footprint all matter. Many lean online businesses choose Wyoming for lower annual costs and stronger privacy, while venture-backed startups usually choose Delaware. Read our Delaware vs Wyoming vs Nevada guide →
Formation services handle paperwork but leave you on your own for entity classification elections and tax compliance setup. Then you discover Form 5472, 8804, or 1120 requirements when filings are due. We integrate formation with tax strategy so nothing gets missed.
- Entity type selection consultation (LLC vs Partnership vs Corporation)
- State selection analysis based on your business activities
- Complete entity formation and state filing
- EIN application and IRS registration
- Tax classification elections (Form 8832 if needed)
- US bank account setup assistance and documentation
- Operating agreement or bylaws for foreign ownership
- Initial compliance assessment (Form 5472, 8804, or 1120 requirements)
Entity Selection Guides:
- How it works
Easy Steps To Get Our Tax Services
Follow the easy 3 steps to file your Taxes securely for maximum refund.
- Step 1
Schedule a free consultation call
Talk to us via live chat, WhatsApp, or schedule a quick call. We’ll evaluate your business needs and provide a custom quote.
- Step 2
Fill out our web form/upload documents
We send a secure link to upload and complete the prerequisite information required for tax filing. Simply submit the information to the secure portal.
- Step 3
We file your Taxes
On completion, we provide the draft copy for your review and sign off. We will e-file on your behalf with the IRS.
Foreign Owned LLC Tax Questions Answered
Get answers to the most common questions about foreign-owned LLC tax requirements, Form 5472 filing, and compliance obligations for international investors.
Do I need to file Form 5472 for my foreign-owned LLC?
Yes, if you’re a foreign person who owns 25% or more of a US LLC (disregarded entity), you must file Form 5472 annually. This includes single-member LLCs owned by foreign individuals or entities. The penalty for not filing is $25,000 per form per year, making professional compliance essential.
💡 Do I need Form 5472 AND Form 1120 Pro Forma?
Yes. If you are a foreign person who owns 25% or more of a U.S. LLC, you must file Form 5472 every year. This filing applies to all foreign-owned single-member LLCs, regardless of whether the owner is an individual or a foreign entity. In addition, failing to file can result in a $25,000 penalty per year, which is why professional support is strongly recommended. Read guide →
🗺️ Which state is best for my foreign-owned LLC?
There is no single best state for every foreign-owned LLC. Many online businesses choose Wyoming because it offers lower annual costs and strong privacy rules. Meanwhile, venture-backed startups commonly select Delaware due to its legal and investor-friendly structure. However, if your business has physical operations, employees, or property in a particular state, you may need to register there regardless of where you form the LLC.. See detailed state comparison →
🆔 Do I need an ITIN to file Form 5472?
Foreign individuals without a Social Security Number need an ITIN to file any U.S. tax return, including returns with Form 5472. You can apply for an ITIN and file your return simultaneously. We’re IRS-authorized Certifying Acceptance Agents and can handle both. Learn about ITIN services →
⏱️ How long does ITIN application take?
IRS processing times typically range from 7–11 weeks during peak season (January through April) and 4–6 weeks during the rest of the year. When you work with a Certifying Acceptance Agent (CAA), you do not need to mail your original passport, which reduces risk and delays. In addition, rush support may be available for urgent situations. See timeline guide →
📋 What's the difference between 1120 Pro Forma vs full Form 1120?
Form 1120 Pro Forma is a simplified information return used by disregarded entities. It reports basic activity but does not calculate tax. In contrast, the full Form 1120 is the standard corporate tax return used by C-Corporations to compute tax liability. The Pro Forma version is filed only to serve as the attachment for Form 5472. See detailed comparison →
🤝 Do partnerships need Form 5472 or something else?
Partnerships with foreign partners do not file Form 5472. Instead, they must file Form 1065 for the partnership return, Form 8804 for withholding tax, and Form 8805 for each foreign partner. Because partnerships follow different IRS rules than disregarded entities or corporations, the filing requirements are not the same.. Read partnership guide →
💰 What is Form 8804 and who needs it?
Form 8804 reports the withholding tax that partnerships must pay on behalf of their foreign partners. It applies when the partnership has foreign partners with effectively connected income (ECI). The filing is required annually, and payments are made quarterly. If the partnership does not withhold properly, it may become responsible for the unpaid tax, along with interest and penalties. Read complete guide
📄 What is Form 8805?
Form 8805 is issued to each foreign partner and shows the partner’s share of income and the tax withheld under Section 1446. Foreign partners use this form to claim credit for the tax already withheld when they file their U.S. tax returns. Partnerships must provide Form 8805 to their foreign partners by March 15 each year. Learn more →
🏛️ Do foreign-owned corporations file Form 5472?
Yes. A foreign-owned C-Corporation with 25% or more foreign ownership must file both the full Form 1120 corporate tax return and Form 5472. Form 5472 is required whenever there are reportable transactions with related foreign persons. Both filings are mandatory, and each carries potential penalties if not submitted correctly. Read corporation guide →
💵 How much does Form 1120 Pro Forma preparation cost?
Form 1120 Pro Forma is included in our $450 Form 5472 package – they’re always filed together for disregarded entities. Full Form 1120 for corporations starts at $450. Partnership Form 1065 + 8804/8805 starts at $1,800. See all pricing →
⚠️ What are penalties for not filing Form 8804?
If a partnership fails to withhold and pay tax under Section 1446, it becomes liable for the unpaid tax as well as any interest. In addition, late filing penalties for Form 8804 can reach 5% of the unpaid tax per month, up to a 25% maximum. Read penalty guide →
🔍 How do I know if I'm a disregarded entity, partnership, or corporation?
A single-member LLC is treated as a disregarded entity by default, while a multi-member LLC is treated as a partnership. If the business is formally incorporated, it is treated as a corporation. However, you may elect a different tax classification using Form 8832. If you are unsure how your entity is classified, you can take our entity quiz for guidance. Take entity quiz →
❓ Form 5472 with no income - still required?
Yes. Filing Form 5472 is required based on reportable transactions with foreign related parties, not on the LLC’s income. This means you must still file even if the LLC generated no revenue. Transactions such as capital contributions, loans, or reimbursements all trigger the requirement. The $25,000 penalty applies regardless of income level. Read guide →
⏱️ When are these forms due?
ere are the standard IRS deadlines:
Form 5472 + Form 1120 Pro Forma: Due April 15 (or October 15 with an extension).
Form 1065: Due March 15 (or September 15 with an extension).
Form 8804: Quarterly payments are due April 15, June 15, September 15, and January 15.
Form 1120: Due April 15 (or October 15 with an extension).
🇮🇳 Requirements for Indian nationals?
Indian citizens who own U.S. entities must file the correct U.S. tax forms based on the type of entity they operate. For example, a single-member LLC requires Form 5472 and Form 1120 Pro Forma, a partnership requires Form 1065 along with Forms 8804 and 8805, and a corporation requires Form 1120 and Form 5472. In addition, Indian residents may need to report their U.S. entity on their Indian tax return and foreign asset disclosures. Read India guide →
🇦🇪 UAE residents with US entities?
UAE residents often form U.S. LLCs to invoice global clients. Because there is no U.S.–UAE income tax treaty, proper structuring is essential to manage withholding and ECI exposure. Filing requirements still depend on the type of entity you form, so LLCs, partnerships, and corporations each have different obligations. Read UAE guide →
🏦 Help with US bank account for any entity?
Yes. We can help prepare bank-ready documentation for LLCs, partnerships, and corporations. This includes EIN confirmation letters, formation documents, ownership certifications, and introductions to banks that work with foreign investors. Read banking guide →
🗺️ Which entity type and state is best?
The best entity type and state depend on your specific situation. A single owner typically forms an LLC, while multiple owners may choose a partnership or corporation. All structures offer liability protection, but the tax implications are very different. Because of this, we review your circumstances and recommend the most suitable option. Read comparison →
🔧 Haven't been filing - what do I do?
You should act as soon as possible. We assist with voluntary compliance using reasonable-cause procedures for Forms 5472, 8804, 1120, and other required filings. In many cases, addressing the issue early improves your chances of receiving penalty relief. Because each form carries different risks, we recommend the appropriate remediation strategy based on your situation. Read remediation guide →
🎓 Can I file these forms myself?
It is technically possible to file these forms yourself, but it is not recommended. We often see significant errors in DIY submissions, especially for Form 5472 and Form 1120 Pro Forma. In addition, withholding calculations for Forms 8804 and 8805 can be complex, and Form 1120 is one of the most detailed corporate tax returns. Professional preparation typically costs far less than the penalties that may result from errors. Read DIY analysis →
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