If you own a US LLC as a non-resident, you almost certainly have to file a US tax form every year — even with zero income, zero activity, and zero US tax owed. The penalty for not filing starts at $25,000.
Most formation services don't mention this. You form the company, they take the fee, and the annual obligation is left with you to discover — often after the deadline.
This article covers what the obligation actually is, who it applies to, and what to do if you've already missed years.
The "US LLC = 0% tax" myth
Let's kill this first, because it's the most damaging idea in this niche.
A foreign-owned single-member LLC with no US-source income and no US trade or business often owes no US federal income tax. That part is true, and it's why the claim spreads. Founders who have completed an acquisition and are exploring further co-investment opportunities can learn about our Equity Partners programme.
What the videos leave out:
- No tax owed is not the same as no filing required. These are separate obligations. You can owe nothing and still face a $25,000 penalty for not filing.
- Your home country still taxes you. You're a tax resident somewhere. That country almost certainly taxes your worldwide income, and a US LLC doesn't change your residency. A US structure is not a way to stop paying tax where you live — treating it as one is tax evasion in your own jurisdiction, not clever structuring.
- Whether you have US-source income is a technical question, not a preference. If you have US employees, a US office, dependent agents in the US, or income effectively connected with a US trade or business, the analysis changes and tax may genuinely be due.
Anyone selling a US LLC as a tax-free structure is either not qualified to advise on tax or is comfortable letting you find out the hard way. We're a business services firm, not a tax firm — get an actual cross-border CPA. If you're still at the formation stage, read which state to use for your LLC before you file. This article is orientation, not advice.
The obligation: Form 5472 + pro-forma Form 1120
Since the rules changed for tax years beginning on or after 1 January 2017, a foreign-owned US disregarded entity — which is what a single-member LLC owned by a non-US person usually is — is treated as a corporation for reporting purposes under Section 6038A.
What that means practically:
- You file Form 5472 (Information Return of a 25% Foreign-Owned US Corporation or a Foreign Corporation Engaged in a US Trade or Business)
- Attached to a pro-forma Form 1120, on which you complete only the identifying information — name, address, and items B and E — and write "Foreign-owned U.S. DE" across the top
- Every year, regardless of whether the LLC had income or activity
The 1120 here is not a tax return in the normal sense. You're not calculating tax on it. It's the carrier for the 5472.
It applies even with zero activity
This is where people get caught. "My LLC did nothing last year, so there's nothing to file."
Not correct. Form 5472 reports reportable transactions with related parties, and for a foreign-owned disregarded entity that includes contributions and distributions — money you put into the LLC, money you took out. The act of funding your own company at formation is itself a reportable transaction.
There is no minimum threshold. A $100 transfer is reportable.
In practice: if you formed the LLC and put any money into it, you have something to report.
The penalty
$25,000 per form, per year, for failing to file, filing late, filing incomplete, or failing to maintain the required records.
It escalates: an additional $25,000 for each 30-day period that continues beyond 90 days after the IRS issues notice, with no stated maximum.
If your LLC had reportable transactions with more than one related party, a separate Form 5472 is required for each — and each carries its own penalty.
There's a further consequence people miss: failing to file can leave your statute of limitations open indefinitely, meaning the IRS retains the ability to examine that year long after it would normally have closed.
(Penalty figures verified against multiple current practitioner sources as of July 2026 — amounts are periodically adjusted, so confirm the current figure before relying on it.)
Deadline and how to file
For a calendar-year LLC, the deadline is generally 15 April, with an extension available via Form 7004 if filed on time.
Form 5472 with pro-forma 1120 for a foreign-owned disregarded entity is filed by mail or fax — it is not part of the standard e-file path. Check the current Form 5472 instructions for the correct address and fax number, which the IRS changes.
You need an EIN to file. If you don't have one, get one before the deadline — you cannot file without it. (See our EIN article; you do not need an ITIN to get an EIN.)
Records you must keep
The rules also require you to maintain records sufficient to establish the accuracy of the return — transaction records, bank statements, agreements, supporting documentation. The penalty applies to record-keeping failures as well as filing failures. Practitioners commonly advise retaining these for around seven years.
What about BOI reporting? (Important 2026 update)
This has changed, and a lot of published content is now wrong.
Under an interim final rule issued by FinCEN in March 2025, entities created in the United States — including your Wyoming or Delaware LLC, regardless of who owns it — were exempted from beneficial ownership information reporting under the Corporate Transparency Act. The definition of "reporting company" was narrowed to cover only entities formed under the law of a foreign country that have registered to do business in a US state.
So: if you are a non-US founder whose US LLC was formed in a US state, you are likely not required to file a BOI report. If instead you have a company formed in your home country that is registered to do business in the US, that foreign entity may still be a reporting company and must file.
Two cautions, both real:
- The March 2025 rule is an interim final rule. FinCEN has indicated it intends to finalise it, and legislation has been proposed. The underlying statute remains on the books. This is not settled forever.
- [VERIFY CURRENT — check FinCEN's own page the week you publish or act.] This topic has reversed more than once, and any article stating it confidently — including this one — should be checked against fincen.gov before you rely on it.
Other filings you may have
Depending on your situation, one or more of these may also apply. This is orientation, not a complete list, and a cross-border CPA should confirm which apply to you:
- Form 1040-NR — if you personally have US-source income requiring a return
- Form 1120 (real, not pro-forma) — if your LLC elected corporate taxation, or you formed a C-Corp
- Form 1065 and Schedules K-1 — for multi-member LLCs treated as partnerships
- W-8BEN / W-8BEN-E — given to US payers so they apply correct withholding; not filed with the IRS
- Form 1042/1042-S — if your entity pays certain amounts to foreign persons
- State filings — annual reports and franchise tax, entirely separate from federal
- FBAR / FinCEN 114 — generally relevant to US persons with foreign accounts; ask your advisor whether any version touches you
If you haven't filed for previous years
Don't panic, and don't ignore it.
The practical position practitioners describe: filing before the IRS contacts you is materially better than being found. Penalty relief for reasonable cause exists, and voluntarily correcting the record is the situation in which it's most likely to be considered. There is no guarantee — do not let anyone tell you abatement is routine.
What to do: get a cross-border CPA who has actually handled late 5472 filings, prepare the missing years, include a reasonable-cause statement, and file. The cost of that engagement is small next to the exposure.
What not to do: quietly dissolve the LLC and hope. Dissolution doesn't erase the obligation for years the entity existed.
State-level obligations (separate from all of the above)
Your federal filing has nothing to do with your state filing. Both exist.
Typical state obligations: an annual report with a fee, a franchise tax in some states, and maintaining a registered agent. Miss them and the entity goes delinquent, then administratively dissolved — which, as our banking article notes, is a common cause of bank application rejections nobody explains to you.
Costs vary meaningfully by state and change; check your state's Secretary of State page for the current figures rather than trusting a blog table.
Can you do this yourself?
The pro-forma 1120 is nearly blank. Form 5472 is a two-page information return. For a simple single-member LLC with a handful of transactions between you and the company, plenty of founders complete it themselves using the IRS instructions.
Do it yourself if: single-member, disregarded, no US-source income, simple transactions, and you're comfortable reading IRS instructions carefully.
Get a professional if: you have US-source income or possible ECI, multiple members, an entity election, multiple related parties, real estate, or any missed years. Late filings are not the place to learn.
And regardless: the reason to use a professional here isn't complexity, it's the asymmetry. The form is cheap to prepare and expensive to get wrong.
What we do — and don't
We are not a tax firm, we don't prepare returns, and we don't give tax advice. What we do is make sure clients know this obligation exists before they need it, and refer them to cross-border CPAs who handle it properly.
If you formed a US LLC through anyone and nobody mentioned Form 5472, that tells you something useful about what else they may not have mentioned.
For more context, see getting an ITIN as a non-US founder. For more context, see LLC vs C-Corp for Belgian founders. For more context, see LLC vs C-Corp for Brazilian founders. For more context, see LLC vs C-Corp for Canadian founders. For more context, see LLC vs C-Corp for Chilean founders. For more context, see whether foreigners can buy a US business.