Form 5472 is a tax form that has to be filed with the US tax authority, the IRS (Internal Revenue Service). But who exactly has to file it, and what do you need to watch out for? We have put all the information together for you.
What is Form 5472?
Form 5472 from the US tax authority (the IRS) is an information return. It has to be completed and filed with the IRS by companies such as the LLC or the U.S. Corporation as soon as foreign ownership of the company reaches at least 25%.
Information Return of U.S. Persons with Respect to Certain Foreign Corporations
As the form's full title, "Information Return of U.S. Persons with Respect to Certain Foreign Corporations", already suggests, the IRS uses this form to keep an eye on US companies with foreign ownership (foreign-owned US companies) as well as on foreign corporations.
The form therefore serves to disclose transactions between a US company and a related domestic company or a foreign party. Every so-called "related party" has to be listed. These reportable transactions can be money transfers, but also payments of rent, commissions and the like.
The form has to be filed for each such company. So if you have not just one U.S. Corporation or LLC but several, you have an obligation to file Form 5472 for every company that has a "foreign shareholder" with a qualifying stake.
Possible penalties for not filing
Ignore this obligation to file Form 5472 and it can quickly get expensive. The IRS imposes penalties whose amount depends on whether you did not file the form at all or filed it late, for example. The penalties can range from 10,000 US dollars to 25,000 US dollars per form and per year.
The deadlines for filing IRS Form 5472
If you want to avoid painful penalties, keep a close eye on the deadlines. IRS Form 5472 is due every year (for each tax year) on 15 April. With an extension, you have until 15 October to file the form.
Our service for your ZeroTax LLC
Filing IRS Form 5472 and other services
If your LLC is subject to the obligation to file Form 5472 as a "foreign corporation" or as a company with "foreign shareholders", you do not need to worry about the form being completed properly and filed on time.
This service is included in our all-inclusive service package. Depending on your state of formation, we also take care of the required annual report, the franchise tax report and the directors' report. Take a look at our service package and see the full scope of what we do for you.
You are of course also welcome to contact us with questions about the reporting process for this form. Simply get in touch with us!