IRS Form 5472: Who Must File and What You Need to Report

The United States continues to attract substantial foreign investment. Foreign direct investment in the U.S. reached $92 billion in the first quarter of 2026, more than 50% higher than the previous quarter, according to the Global Business Alliance.

As foreign investment grows, more businesses may also face U.S. tax reporting requirements. One of them is IRS Form 5472.

The form reports transactions between a reporting corporation and its related parties. It applies to certain foreign-owned U.S. corporations, foreign corporations doing business in the United States, and certain foreign-owned U.S. single-member LLCs.

Failing to file a complete and correct Form 5472 on time can result in a $25,000 penalty.

What Is IRS Form 5472?

Form 5472 reports certain transactions between a reporting corporation and a foreign or domestic related party.

Also known as Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business, the form provides information required under Internal Revenue Code Sections 6038A and 6038C.

Form 5472 doesn’t calculate how much income tax a business owes. Instead, it gives the IRS information about ownership and transactions involving related parties.

The form applies if there is a reportable transaction for that reporting corporation for the tax year.

Who Must File Form 5472?

U.S. corporations with at least 25% foreign ownership and foreign corporations engaged in a U.S. trade or business must file Form 5472.

However, foreign ownership isn’t the only factor. You also need to consider related parties and transactions conducted during the year.

1. 25% Foreign-Owned U.S. Corporations

A U.S. corporation meets the foreign-ownership test when at least one foreign shareholder directly or indirectly owns 25% or more of:

• The total voting power of all classes of voting stock, or
• The total value of all classes of stock.

The 25% test applies if the ownership level is met at any time during the tax year. Indirect ownership also counts, including ownership through other corporations, partnerships, trusts, or similar entities.

2. Foreign Corporations Doing Business In The United States

A foreign corporation also qualifies as a reporting corporation when it engages in a U.S. trade or business.
In that situation, Form 5472 applies when the corporation completes reportable transactions with a related party.

This part of the rule often receives less attention because many Form 5472 questions involve U.S. limited liability companies with foreign owners.

3. Foreign-Owned U.S. Single-Member LLCs

A foreign-owned U.S. single-member LLC may also need to file Form 5472, even if it has no taxable income.

For regular federal income tax purposes, the IRS often treats a single-member limited liability company as a disregarded entity. That means the company doesn’t file a separate federal income tax return from its owner unless it elects another tax classification.

Form 5472 follows a special rule. A U.S. disregarded entity wholly owned by a foreign person receives corporation-like treatment for the limited purposes of the Form 5472 reporting requirements. As a result, a foreign-owned single-member LLC may need to file a pro forma Form 1120 with Form 5472 attached.

This commonly affects foreign entrepreneurs who form a U.S. LLC to conduct business, hold investments, receive payments, or access U.S. banking and payment services.

Does Form 5472 Apply If Your Business Has No Income?

A business can have a Form 5472 filing requirement even when it earned no revenue or profit.

The reporting rules focus on transactions, not simply taxable income. For a foreign-owned U.S. disregarded entity, reportable activity can include money or property transferred between the entity and its owner in connection with the company’s formation, operation, acquisition, disposition, or dissolution.

For example, a foreign owner might:

• Deposit money into the LLC’s bank account
• Pay formation costs for the LLC
• Pay business expenses personally
• Contribute property
• Receive money or property from the company

Those transactions can still count even when the business hasn’t made its first sale.

Before treating an inactive or pre-revenue LLC as having no filing requirement, review all activity between the company, its owner, and other related parties.

Who Counts As A Foreign Person?

A foreign person is an individual or entity that doesn’t qualify as a U.S. person under the Form 5472 rules. This can include:

• A nonresident alien individual
• A foreign corporation
• A foreign partnership
• A foreign trust or estate
• Certain foreign governments or government entities

Some exceptions apply. For example, the current instructions address individuals who make certain elections under Sections 6013(g) or 6013(h) to file jointly with a U.S. spouse.

What Does “Related Party” Mean For Form 5472?

A related party can include the foreign owner as well as certain people or businesses connected to the owner or reporting corporation.

The IRS definition includes a direct or indirect 25% foreign shareholder. It can also include certain persons related to the reporting corporation, persons related to a 25% foreign shareholder, and other parties treated as related under Section 482.

For example, assume a foreign parent owns a U.S. corporation and another foreign company. Transactions between the U.S. corporation and the foreign sister company may require reporting even though the payment didn’t go directly to the parent.

A reporting corporation files a separate Form 5472 for each related party with which it had reportable transactions during the tax year.

What Transactions Must You Report On Form 5472?

The form may require you to report transactions with related parties, including payments, money received, loans, property transfers, services, capital contributions, and distributions. The exact reporting requirement depends on the transaction and type of reporting corporation.

Monetary Transactions

Part IV covers several categories of transactions where money serves as the consideration. Examples are:

• Sales and purchases of inventory
• Sales and purchases of other property
• Rents
• Royalties
• Services
• Commissions
• Interest
• Money borrowed or loaned
• Other amounts paid or received

Businesses must report the amounts under the appropriate category rather than simply combining every transaction into one number.

Contributions And Distributions

Foreign-owned U.S. disregarded entities should pay close attention to Part V of Form 5472.

The IRS instructions can treat transactions connected with formation, dissolution, acquisition, and disposition as reportable. Contributions to the entity and distributions from it can also fall within these rules. This explains why a new LLC with no customers can still face a filing requirement.

Nonmonetary Transactions

Some transactions involve no cash at all.

Transfers of property, rights, obligations, or services can still require reporting. Depending on the transaction, you may need to describe what occurred and provide a reasonable estimate of fair market value.

How Do You File Form 5472?

Most reporting corporations attach Form 5472 to the applicable federal corporate income tax return. However, it’s different for foreign-owned U.S. disregarded entities.

U.S. Corporations:

A domestic corporation files Form 5472 with its Form 1120, U.S. Corporation Income Tax Return. If the business had reportable transactions with several related parties, it may need to attach several Forms 5472.

Foreign-Owned U.S. Disregarded Entities:

A foreign-owned U.S. disregarded entity generally prepares a pro forma Form 1120 and attaches Form 5472. The entity completes the identifying information required by the Form 5472 instructions and writes “Foreign-owned U.S. DE” across the top of Form 1120.

Unlike an ordinary corporation filing its income tax return electronically, a foreign-owned U.S. disregarded entity can’t electronically file this Form 5472 package under the current instructions. It must follow the IRS’s special filing procedure.

Check the current Form 5472 instructions before submitting the package because the IRS may update the fax number, mailing address, or filing procedures.

When Is Form 5472 Due?

Form 5472 follows the due date of the reporting corporation’s federal income tax return, including any approved extension.

For a calendar-year domestic corporation filing Form 1120, the deadline usually falls on April 15. Different deadlines can apply to corporations using a fiscal tax year.

Foreign-owned U.S. disregarded entities follow the applicable Form 1120 filing timetable for their pro forma return and attached Form 5472.

Can You Extend The Form 5472 Deadline?

Yes. An eligible filer can request an automatic extension using Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns.

A foreign-owned U.S. disregarded entity uses the Form 1120 code when completing the extension request. The extension must be filed by the regular due date.

What Is The Penalty For Not Filing Form 5472?

The initial penalty for failing to file a complete and correct Form 5472 by the deadline is $25,000 for each failure.

A substantially incomplete Form 5472 can count as a failure to file. The penalty can also apply when the reporting corporation fails to maintain required records. The penalty can increase if the problem remains unresolved.

After the IRS notifies the taxpayer of the failure, another $25,000 penalty can apply if the failure continues for more than 90 days. Additional $25,000 penalties may then apply for each 30-day period, or part of a 30-day period, during which the failure continues. The IRS states that no maximum applies to these continuation penalties.

What Should You Do If You Missed Form 5472?

If you discover a missed Form 5472, address it as soon as possible.

Review the affected years and transactions. For each year, determine which entities had a filing requirement, identify the related parties and reportable transactions, and prepare the required filing package. Make sure Form 5472 and any required pro forma Form 1120 are complete and accurate before submitting them.

The IRS may reduce or remove certain penalties if you can show reasonable cause for filing late or incorrectly. You’ll need to explain what happened and provide records that support your request.

If several years remain unfiled or you have other foreign business reporting issues, consider professional advice before responding to the IRS or filing delinquent returns. Tax Samaritan’s Foreign Business Reporting Services can help with Form 5472 and other international business information returns.

Are There Exceptions To Filing Form 5472?

Not every foreign-owned business must file Form 5472 every year.

For example, the current instructions provide exceptions when a reporting corporation doesn’t have transactions of the type that require reporting. Other exceptions can involve information already reported under certain Form 5471 rules, treaty-related circumstances, and other specific situations.

However, several exceptions that apply to other reporting corporations don’t apply in the same way to foreign-owned U.S. disregarded entities.

What Records Should You Keep?

Keep enough records to support the ownership information and related-party transactions reported on Form 5472. Example:

• Ownership and formation documents
• Bank statements
• Capital contribution records
• Distribution records
• Loan agreements
• Invoices
• Service agreements
• Contracts
• Expense reimbursements
• Property transfer documents
• Records supporting fair market values

The IRS requires reporting corporations to keep books and records sufficient to establish the correct treatment of transactions with related parties.

Form 5472 Vs. Form 5471

Frequently Asked Questions About Form 5472

Get Help With Form 5472 Reporting

Form 5472 can become complicated when ownership runs through several entities or when related parties exchange money, services, property, loans, contributions, or distributions.

The cost of filing it wrong can far exceed the cost of preparing it correctly. If you’re unsure whether Form 5472 applies, review the issue before the filing deadline rather than waiting for an IRS notice.

Tax Samaritan helps U.S. taxpayers and foreign business owners identify their international reporting requirements, prepare Form 5472, and address prior-year filings when forms have been missed.

Request a tax preparation quote or schedule a consultation with Tax Samaritan to review your Form 5472 filing requirements.