Short answer
A U.S. corporation that is 25% or more foreign-owned files Form 5472 with its Form 1120 when it has reportable transactions with a related party, such as a loan from the founder. A foreign-owned single-member LLC files it with a pro forma Form 1120. The penalty for not filing is $25,000 per form.
Form 5472 is an information return. The IRS uses it to see money that moves between a U.S. company and its foreign owners.
Who files it
A U.S. corporation files Form 5472 when a foreign person owns 25% or more of it and the company had reportable transactions with a related party. A loan from the founder, a payment to a parent company or money put into the company can count.
When it is due
You attach Form 5472 to Form 1120. For a calendar-year corporation, that is April 15. An extension for Form 1120 also extends Form 5472.
Why it matters
The penalty for a missed or incomplete Form 5472 is $25,000 per form, per year. It applies even when the company owes no income tax.
How Zovud helps
We prepare Form 1120 and Form 5472 together. We explain them on a call. You review, sign and file them.
Sources
This guide is general information, not legal or tax advice, and rules change. Confirm figures with the state or IRS, or ask us on a free call.