Foreign-Owned U.S. Single-Member LLC Tax FAQ (Wyoming/Florida/Delaware): Form 5472 + Pro-Forma 1120, Amendments, Closing the LLC, and Common Mistakes (2026)
Foreign founders often form a U.S. single-member LLC (Wyoming, Florida, Delaware, New Mexico, etc.) to open a bank account, use Stripe/Shopify, invoice U.S. clients, or look “U.S.-based.” Then the same questions show up:
- “Do I owe U.S. income tax if I’m not a U.S. resident?”
- “Do I need a Social Security Number (SSN) to file anything?”
- “What is Form 5472 and why is everyone warning me about a $25,000 penalty?”
- “Can I amend Form 5472 if my first filing was wrong?”
- “If I dissolved the LLC, what is the ‘final’ filing and how do I close my EIN?”
Educational only. Outcomes can change fast based on facts (U.S. employees/contractors, U.S. office, inventory/warehouses, equipment leasing, U.S. real estate, dependent agents, etc.).
Key takeaways
- Many foreign owners owe $0 U.S. federal income tax on service income when all services are performed outside the U.S. and there’s no U.S. trade or business—but that does not mean “no U.S. filing.”
- A foreign-owned U.S. single-member LLC is often required to file Form 5472 + a pro-forma Form 1120 as an information return, even if tax is $0.
- The penalty can be $25,000 per year for failing to file (or filing a substantially incomplete return), with additional continuation penalties after IRS notice.
- Amending Form 5472 is allowed when you discover errors—accuracy matters.
- Dissolving the LLC with the state doesn’t automatically close IRS records. You may need a final filing and (optionally) a letter to close the IRS EIN account.
1) I’m a non-U.S. resident. Do I owe U.S. income tax on my LLC income?
Often, no—especially for services performed entirely outside the U.S. (e.g., web/app development performed from E.g. India/Spain, consulting performed abroad, marketing services performed abroad).
But you should treat this as fact-driven, not a slogan.
U.S. tax risk tends to increase if you have:
- People in the U.S. working for you (employees or certain contractors)
- A U.S. office or a dependent agent who can bind you
- warehouse or other operational footprint
- U.S.-source passive income (e.g., certain rents/royalties/leasing) that can be taxable on a gross basis
A good mental model: Tax is one question; information reporting is a different question.
2) What are Form 5472 + “pro-forma 1120,” and who must file them?
If you are a foreign person who owns 100% of a U.S. single-member LLC (disregarded entity):
The IRS commonly requires the LLC to file:
- Form 5472 (to report “reportable transactions” with related parties), and
- A pro-forma Form 1120 attached to it (often mostly blank except identifying info).
This is generally an information return regime meant to disclose who owns the entity and what money moved between the U.S. LLC and its foreign owner / foreign related parties.
3) What counts as a “related party” and a “reportable transaction”?
A related party usually includes:
- You (the foreign owner)
- Any company you control (often 50%+ ownership, depending on rules/facts)
- Certain family relationships can matter depending on the structure and how transactions flow
Reportable transactions (the ones Form 5472 cares about)
Think: money moving between the U.S. LLC and you/your foreign company.
Common examples:
- Owner funds the LLC (capital contribution)
- LLC pays the owner (distribution)
- Owner pays LLC expenses personally (often treated as a contribution)
- LLC pays owner’s personal expenses (often treated as a distribution)
- Payments between the LLC and your foreign company (management fees, consulting, development services, etc.)
Not usually reportable on Form 5472
- Payments from unrelated customers (even if they are U.S. customers)
- Payments to unrelated vendors (registered agent, software tools, mailbox service, Zoom, hosting), assuming they are truly third parties
Form 5472 is not “U.S. customer revenue reporting.” It’s “related-party money movement reporting.”
4) What is the penalty if I get this wrong?
The IRS instructions provide that failure to file (or filing a substantially incomplete return) can trigger a $25,000 penalty per tax year, and if the failure continues after IRS notice, additional continuation penalties can apply.
This is why foreign founders hear “$25,000 penalty” so often.
5) When is Form 5472 due, and where/how do I file it?
For foreign-owned U.S. disregarded entities, the IRS instructions include specific “when and where to file” rules, including fax/mail procedures and how to label the filing.
Practical reality: you generally should assume:
- No “acceptance letter” comes back just because you filed.
- Your best proof is your fax confirmation and/or certified mail tracking.
6) Can I amend Form 5472 (even more than once)?
Yes—if you discover the original filing was wrong or incomplete, filing an amended/corrected submission is typically the responsible move.
Best practices when amending:
- Correct the numbers to the best of your ability (good-faith accuracy)
- Keep a clean explanation memo for your file (“what was wrong, what changed, why”)
- Be consistent year-to-year in how you classify contributions vs. distributions
Important mindset:
The goal isn’t perfection down to the penny—it’s truthful, supportable reporting based on real transactions and records.
7) How do I classify contributions vs. distributions in real life?
Here are the most common confusing situations (and how to think about them):
A) The LLC pays for the owner’s personal expenses (company card used at supermarket, restaurants, clothing, gift cards)
Usually treated as a distribution (LLC → owner benefit).
B) The owner pays LLC expenses with a personal card
Usually treated as a contribution (owner → LLC).
C) A customer accidentally pays the owner’s personal bank account, and the owner uses that money to pay LLC expenses and/or transfers some into the LLC
A clean way to track it is:
- Treat the customer payment hitting the owner as a distribution/benefit to owner, and then
- Treat amounts the owner spends for LLC expenses and/or transfers into the LLC as contributions
(That creates a clear paper trail showing how the business was funded and how funds were used.)
D) A family member pays formation costs with their credit card
Common practical treatment:
- Treat it as the owner receiving support (economically a gift/advance), then
- Treat it as the owner’s contribution to the LLC (because the LLC got started using funds attributable to the owner’s side)
8) I invoiced U.S. clients. Do I need to report that on Form 5472?
Usually no, if the clients are unrelated third parties and payments are standard customer payments.
Form 5472 is about reportable transactions with related parties, not normal customer revenue.
9) Stripe/1099-K: If Stripe didn’t issue a 1099-K, do I need to do something?
If no 1099-K was issued, that fact alone does not create a filing requirement.
More importantly: a 1099-K (or lack of one) does not automatically determine whether you owe U.S. income tax. Taxability depends on source of income and whether you have a U.S. trade or business.
10) I dissolved/closed the LLC. Do I need Form 966?
Form 966 is for corporations that adopt a resolution or plan of dissolution/liquidation—not for a disregarded LLC.
For an LLC taxed as disregarded, your “wrap-up” is generally about:
- Filing the required final information return(s) (if applicable)
- Checking “final” where appropriate on applicable filings
- Cleaning up state closure requirements separately
11) How do I close the EIN / IRS business account?
The IRS explains that to close the IRS business account tied to an EIN, you typically send a letter including the business legal name, EIN, address, and the reason you want to close the account, and mail it to Internal Revenue Service, Cincinnati, OH 45999.
The IRS also notes it generally can’t close the account until required returns are filed and taxes paid (if any).
12) FBAR and Wise accounts: do foreign owners have to file?
FBAR (FinCEN Form 114) is generally a requirement for U.S. persons with qualifying foreign financial accounts above thresholds—not for non-U.S. persons who are not treated as U.S. persons for FBAR purposes.
So if you are a nonresident foreign owner (not a U.S. person), FBAR is typically not your filing regime. If you later become a U.S. person (e.g., residency rules change), reassess.
13) Special note for foreign corporations with U.S. equipment leasing (why “protective 1120-F” can be the wrong answer)
Many founders think: “No permanent establishment (PE) = no U.S. tax.”
That’s sometimes true for business profits, but not always true for income categories handled elsewhere in the treaty.
Example: Under the U.S.–Italy treaty materials, certain payments for the use of industrial, commercial, or scientific equipment can be treated as royalties, and the treaty summary describes reduced rates (e.g., 5% for certain royalties, 8% for others).
That matters because royalty-type income is often taxed based on classification, not “where the contract was signed.”
This is exactly why cross-border structures involving U.S. warehousing and equipment leasing should be analyzed before filing.
Quick compliance checklist (foreign-owned U.S. single-member LLC)
- Track related-party money movements (owner ↔ LLC; foreign company ↔ LLC)
- File Form 5472 + pro-forma 1120 when required, on time
- Keep proof of filing (fax confirmation / certified mail)
- If something was wrong, amend and document the reason
- If you dissolve the LLC: file any final filings and close out the EIN account if appropriate
If you want this done correctly—especially if you need amended 5472 filings, a final/closing year filing, or you’re unsure whether any U.S. tax exposure exists—book a paid consultation here: https://oandgaccounting.com/appointment-booking-form/
