Form 5472 Has No E-File Option and Big Penalties
Small business owners, particularly those with LLCs taxed as S-corps and foreign ownership, are struggling with complex and outdated tax filing requirements. The lack of e-filing options for critical forms like 5472, combined with potential for significant penalties, creates a stressful and costly burden.
SOURCES (60)
“Hey there, I was searching for OP's question and came across your response. I have a single member LLC, non S-corp at the moment (though I do plan to change that next year) and you're right the new form removed that single-member LLC checkbox from…”
“See question above. How long does IRS take to process this? submitted by /u/ShakeAndBakeThatCake [link] [comments]”
“Hey everyone, I formed a single-member Wyoming LLC because I plan to launch a business operating in/with the US in the coming years. The entity is already formed, but it currently has $0 in revenue, no bank transactions yet, and is completely inactive while I finalize my business model. I am a German citizen residing full-time in Denmark. My sole priority right now is staying 100% compliant and avoiding any failure-to-file penalties or state/federal fines while it sits idle. Here is the complian”
“Trying to get clarity on this as I'm seeing different things online For a single member LLC filing as an S Corp, I understand the employee contribution portion must be declared by the end of the calendar year. However, I'm seeing that the actual funds may not need to be deposited into the account until Sept 15 of the following year assuming that an extension for the corporation is filed. Is this accurate or do the funds need be deposited into the account the same calendar year? sub”
“2 - you are not always allowed to go back to a sole proprietor. Generally if you want to revoke the S-Election, you revert to being taxed as a C-Corp.”
“I'd push back gently on your tax guy's "just don't send anything and hope" option, that's a real gamble given the $25,000 per year per form penalty structure. Reasonable cause statements aren't guaranteed to be accepted, that's true, but they're accepted more often for first-time filers with a clear, honest explanation and low transaction volume than for people who get caught after the fact and then try to explain themselves. The general best practice here i”
“First, you need a better understanding of the problem. You didn’t form a California S-corporation. The state of CA doesn’t do such things. You either formed a CA LLC or Corporation. The federal government is what dictates your tax classification as an S Corp If you formed an LLC, then you don’t need to terminate it. All you need to do is change your tax classification to a sole proprietor. If you formed a state law California corporation and made an S Corp. election then you need to decide what”
“This is actually one of the trickier edge cases in the 5472 world. The general rule is that a foreign-owned single-member disregarded LLC has to file a pro forma 1120 with a 5472 attached if there were any reportable transactions with the foreign owner during the year, things like contributions, distributions, loans, or payments. If truly nothing happened, no bank account, no contributions, no distributions, no reimbursements, the argument some make is that there's no reportable transaction”
“My last setup gave me software but was still coordinating registrations, an outside accountant and state notices myself. That made the low filing price feel less meaningful”
“What state was it formed in? Most States have a lookup tool for corporations showing when they were formed.”
“The penalty rate now adjusts every year. For 2025, it's $245 per month per shareholder (up to 12 months). For 2026, it will be $255.”
“Hello, I have an individual whom is 100% owner of an S-Corp. As I logged in, it says he hasnt filed 1120S nor 1040 for at least since 2022 and possibly longer. What years need to be filed for? and which years should be filed for to avoid the IRS making additional trouble as I cant tell exactly how long he hasnt been filing for. The IRS hasnt sent any notices asking for tax returns as of yet. submitted by /u/americanredbird1990 [link] [comments]”
“What would you guys charge for a SDO submission: 2022-2024, involving 2 5471s: 1 need to be fixed and the other one prepared from scratch. Possible GILTI and subchapter F. FBARS were filed and are fine. Low value assets would result in a MOP of maybe $9k. I’d only focus on 5471s and former preparer does the 1040X. I hate to do this but I’m pretty sure the work would warrant a fee higher than the MOP. submitted by /u/BlockchainTaxConsult [link] [comments]”
“I'm hoping someone might be able to provide a little insight as Im still learning a bit here. I started a sole proprietorship LLC over a year ago. A little over a month ago I submitted a name change for the LLC itself. This was easy enough. But I later read that even if you change the name of the business you need to inform the IRS of the change usually with an official letter that you mail to them. So I did exactly that. I provided all the necessary information in the letter (EIN, former bu”
“It depends entirely on the specific facts and circumstances. The potential legal entity formation issues aside, it sounds like you're the one operating this business activity and so it sounds like you may have economic activity For partnership US tax compliance (especially with anything foreign related) it is strongly advised that people first consult or fully understand the US income tax rules that may apply. Hiring a credentialed professional is usually the best option before starting a bu”
“If it’s just the K-1, 000-00-0000 works fine. If that partner appears on other forms, they should get an ITIN.”
“Ik this is a specific question but if anyone could give me guidance I would greatly appreciate it. My situation: - Multi-member LLC taxed as a partnership - One partner is foreign - They have 0% allocation of profit, loss, and capital - They have no SSN, no ITIN, and has never had any US economic activity I found the IRS FAQ that says for foreign partners not required to obtain a TIN, you should enter 000-00-0000 on Schedule K-1 (Item E). My question: Can I use that same 000-00-0000 placeholder”
“I'm thinking about incorporating my decades-old sole proprietorship to a corporation, primarily for tax reasons. How much of a nightmare is that likely to be? I have several credit cards and a couple loans on my name for the business, if that matters. Yes, I obviously plan to use my attorney for this, but I want the opinions of other small business owners who may have done this in the past. I'm thinking about doing it effective January 1, for a clean tax year break. submitted by &#”
“You should be able to use all zeroes. The catch is that sometimes this sort of thing will reject upon Efiling it. If that happens, then you need to convert it to paper and file it that way. If you end up filing by paper, be sure to get proof of mailing, as penalties for late K-1s are severe.”
“How can a partner have 0% of profit, loss and capital? How could that possibly have any economic substance? But to answer your specific question, it is not specifically required for a foreign partner to have a TIN, you can file by writing APPLD FOR in the SSN field. However, it is highly recommended for foreign partners to have TINs as that is the best way to track their withholdings and of course if there ever is any profit they would have to file a tax return.”
“Ik this is a specific question but if anyone could give me guidance I would greatly appreciate it. My situation: - Multi-member LLC taxed as a partnership - One partner is foreign - They have 0% allocation of profit, loss, and capital - They have no SSN, no ITIN, and has never had any US economic activity I found the IRS FAQ that says for foreign partners not required to obtain a TIN, you should enter 000-00-0000 on Schedule K-1 (Item E). My question: Can I use that same 000-00-0000 placeholder”
“Ik this is a specific question but if anyone could give me guidance I would greatly appreciate it. My situation: - Multi-member LLC taxed as a partnership - One partner is foreign - They have 0% allocation of profit, loss, and capital - They have no SSN, no ITIN, and has never had any US economic activity I found the IRS FAQ that says for foreign partners not required to obtain a TIN, you should enter 000-00-0000 on Schedule K-1 (Item E). My question: Can I use that same 000-00-0000 placeholder”
“Is this real or paranoid mental illness, and if real then what’s wrong with a managed LLC whose owner is a trust? You just need one manager POC on any public filings. Then owner could be a trust. The only people who can get that is possibly in discovery or law enforcement. Also, if it’s this much stress and you’re already in a position where you have private security- why not just sell the IP? If the IP is so valuable that you’re going to these lengths, then it should command a decent sum. I’d a”
“Hi All First time poster here. I've found a lot of the posts here very helpful. I am a single member LLC for consulting I am registered with my state I applied for an EIN using the online tool and received error 101 So I sent in the SS-4 with my state filing receipt via fax and provided my fax number for the EIN. I waited 6 business days. Nothing back. I called and spoke to an IRS agent who said that they don't have an EIN for me after searching for my name and business separately. IRS a”
“okay, but how do I caluclate that? I sell on amazon and walmart marketplace, usually end of year they sent a 1099, right now I am at a net loss and dont have all the exact figures. What should i do in this situation? Stressed out right now.”
“I've kept a spreadsheet of my income since last year that includes all the money I've received on every platform and that is the extent of my preparedness. That, along with records of your business expenses, is an excellent start. (And.. if someone pays you $100 via a platform, and the platform takes $15 out of that in fees giving you $85, you'd record the full $100 as revenue, and the $15 as an expense.) Any qualified (ie, CPA, EA, or AFSP - NOT a facebook tax guru!) tax professiona”
You don’t file quarterly. you make quarterly estimated tax payments
“I have all the software. I probably have the time to do it. But will you want to pay the fee (upfront) to get it done? There is no way this is "pay you when done" work.”
“I’m almost in an identical situation as described in this thread ( https://www.reddit.com/r/fatFIRE/s/BVmEVNgd9B ) but no solution was mentioned so trying again since post is 3 years old. We are dual US/EU citizens. As a family we plan to FatFire ($5M portfolio, $140k/yrs withdrawals) in Lazio, Italy (personal reasons for location; 7% tax doesn’t apply). I am trying to find investment strategy that has favorable taxes given that keeping either US or EU-domiciled ETFs is taxed punitively either b”
“Hi everyone, I'm a Chinese citizen and I formed a Wyoming INC (C-Corp) on Aug 15, 2025. I have no business income or expenses in 2025 (just paid registration and registered agent fees). I completely missed: 1. The 2026 Wyoming Annual Report (due Aug 1, 2026) 2. The 2025 federal tax filing (Form 1120 + Form 5472, due Apr 15, 2026) I'm currently in China and want to fix this myself. My questions: 1. Is my company still active or likely dissolved? How do I check? 2. Can I still file the Ann”
“You file by 2026 taxes between January and April 15 of 2027. You pay quaterly taxes during 2026 so when you file the calculation tells you one of these things: You owe because you didn't pay enough in quaterly taxes You don't owe, you are due a refund, because you overpaid during the quaterly payments This is better suited for r/tax and similar subs. Look up info about your situation, there's a bunch of questions similar to this one so you'll have some answers. The reason you rea”
“Are you talking about sales tax or quarterly estimated income tax because those are two different things. Amazon handles your sales taxes, but not your income taxes.”
“You're looking at two late filings — 2025's Form 5472 + pro forma 1120, and the final-year 2026 return (due mid-July 2026 per the earlier comment, so also already past due). Given the $25k-per-form penalty exposure, and the fact that even experienced preparers go back and forth on edge cases like yours, I'd lean toward hiring rather than DIY-ing it — the reasonable cause statement is what actually determines whether penalties get abated, and it needs to be right the first time, not a”
“I have handled a lot of late filings every year for many non-US owners. The final year filing of your LLC is also late. As it dissolved in March 2026, the deadline for filing final 5472 is mid of July 2026”
“Thank you for the clarification. What should I do now, considering that I was unaware of this requirement and did not file Form 5472 for 2025 or 2026? I am a non-U.S. resident and am unfamiliar with the U.S. tax system, so I am unsure how to proceed. Would you recommend that I handle the filings myself, or would it be safer to hire a CPA, Enrolled Agent, or other tax professional who has experience with foreign-owned single-member LLCs and late Form 5472 filings? If you recommend hiring a profes”
“Thank you for the clarification. What should I do now, considering that I was unaware of this requirement and did not file Form 5472 for 2025 or 2026? I am a non-U.S. resident and am unfamiliar with the U.S. tax system, so I am unsure how to proceed. Would you recommend that I handle the filings myself, or would it be safer to hire a CPA, Enrolled Agent, or other tax professional who has experience with foreign-owned single-member LLCs and late Form 5472 filings? If you recommend hiring a profes”
“hi there. i am a foregin national and also not a US resident. i opened my WY llc in sept 2024 and i think i only had like one transaction of income with this llc in 2024. i did my f5472 and pro forma 1120 for 2024. and now i think i missed any needed dates/filings for 2025. i thought its not important since i did not have any operations/income in 2025. the reason why i even remembered about the filings is because my WY annual report is coming due on sept 1, 2026. could someone please help me and”
“Not going to weigh in on the Part IV versus Part V question since that's really something your CPA needs to confirm before you file, but one practical thing worth double checking on the dissolution side: make sure the timing of your Wyoming dissolution filing and your registered agent cancellation lines up with the short tax year you're using for the pro forma 1120. If the state dissolution date and the date you actually wind down the registered agent service don't match what you put”
“Adding to what's already been said here since the answer is basically right: the reason "use the RA address directly" is so common in practice is that the IRS instructions are aimed at US-based filers who actually have a real US office, and most private letter guidance treats a foreign owner's registered agent address as an acceptable stand-in when there's no genuine US business location, as long as it's consistent across both forms like you mentioned. The C/O format is”
“Yes, the payments you mentioned can be reportable transactions for Form 5472. If you paid startup or operating expenses on behalf of the LLC, those amounts may be treated as a contribution, loan, or amount payable to you, and generally be considered for Form 5472 reporting. This is why many foreign-owned single-member LLCs have reportable transactions in their first year and last year even with little or no revenue. If the filing is late, you can attach a reasonable cause statement to penalty re”
“Hi everyone, I’m trying to understand whether Form 5472 was required for a foreign‑owned single‑member U.S. disregarded LLC that I opened in June 2025 and dissolved in March 2026 . Here are the exact facts: The LLC had no bank account at any time. No income, no expenses, no assets, no operations. No contributions, distributions, reimbursements, or loans. The LLC itself never paid anything. The only payments connected to the LLC were: Formation fee paid personally by me to the agent. Registered a”
“Mostly venting. Client originally said they were just a single member LLC. Now I find out they are a partnership. Business started in 2025. Schedule C was finished. Now I have to go back and prepare a 1065 and two K-1s. I am going to charge them for this extra work too. They also didn't file an extension for 1065. They have a net loss but will still have failure to file penalties. I can probably abate them but still this client has been a huge pain to work with. submitted by /u/S”
“No panic — this is quite common for non-U.S. owners who were not aware of the Form 5472 filing requirement. I’ve handled a couple of similar delinquent cases where we filed the missing Forms 5472 with detailed reasonable cause statements, and the clients did not ultimately receive any penalty notices. IRS always encourages these information disclosure and voluntary remediation. I would not recommend simply doing nothing. The Form 5472 penalty starts at $25,000 per failure, but reasonable cause r”
“I wish I had time to respond more fully but there are some contradictory issues here and some issues that are unclear. A foreign owned LLC cannot make an S-Corp election so are we talking about a 1120-C rather than a partnership (1065)? A partnership would be the default for a multiple member LLC filing. Are you talking about a penalty abatement when you are talking about trying to avoid paying "the fee"? It would probably be easier if you tell the whole story.”
“File the 1120. The penalty for 5472 is pretty steep. I think they do encourage voluntary disclosure. You can also consult someone who is more familiar with international than run of the mill tax preparers.”
“I am a non-U.S. person residing in Japan and the sole owner of a Wyoming single-member LLC. The LLC is treated as a foreign-owned U.S. disregarded entity and did not elect corporate tax treatment. The LLC was formed and will be dissolved within 2026. It had: No revenue No customers No employees or contractors No U.S. trade or business No assets other than a temporary Mercury bank balance Only formation, registered-agent, banking, compliance, and dissolution costs I personally paid most or all of”
“Hello guys, no idea this was the case, but my fault anyway. My tax guy said there is some reasonable cause statements that can be submitted together with the Forms. However, he said those are not often accepted. Is there anything I can do in this scenario to not pay the fee? He also said there is an option of not sending anything and hoping you don't get the fee at all since I don't have that many transactions. Any help is appreciated in this regard. Thanks! submitted by /u/s”
“FTB does not merge accounts, if you’re an LLC elected as an S-corp, they’ll just close out your LLC acct.”
“Did you ever get this resolved? They still gettin ppl, got me yesterday. Same thing as others stated. Quick google search for registering an LLC and got this pos company as a top result. Paid for expedited service that was supposed to be same-day. Havent heard anything back yet but have frozen my credit with the 3 bureaus and signed up for identity theft insurance.”
“Did she provide some sort of document list, checklist, folio, or similar information when you first hired her? You should also check your engagement letter. I agree with others that this is something any reasonable tax pro would flag, but it is also on you to provide all documents and ask questions if anything seems iffy. You sign your return under penalty of perjury that you’ve reviewed the return and it is accurate. Hiring a CPA/EA/attorney will never absolve you of that responsibility, so it”
“Her excuse is not that she didn't know it existed, her excuse was she was too busy to ask for it during tax season - which is BS. Extend the return then and deal with it later.”
“Hi, I'm wondering if anyone has dealt with this situation before or has any advice. I am a new business owner and just filed for my LLC. I went to sign up for my EIN with IRS and got to the final page that has the number and a button saying to download a document. No matter what I tried, I could not get the document to open or download. The button did not work. I know now that this document was the extremely important CP575 that you can only get from this one button. So now I am trying to re”
Yep. EA who already does high-income 1099 work is the same idea.
“Located in NJ, trying to understand what I need to do come Sep 15 regarding paying self employed taxes for the first time. I started working for AI doing 1099 work in April, but was only doing like $200 a month (in Q2 I only made about $450). Thankfully, this ramped up massively in Q3 and in July and August I will have made about $5,000 (about $7,000 estimated by Sep 15). I have a room in my apartment that is solely dedicated to be a work room and it came out to $750 a month based on room size (”