IRS Forms 5472 and 5471 have similar numbers, but they serve completely different purposes. Confusing them can lead to filing the wrong form or missing a required filing entirely. This guide breaks down the differences so you know exactly which one applies to you.
Quick Comparison
| Feature | Form 5472 | Form 5471 |
|---|---|---|
| Full Name | Information Return of a 25% Foreign-Owned U.S. Corporation | Information Return of U.S. Persons With Respect to Certain Foreign Corporations |
| Direction | Foreign person owns US entity | US person owns foreign entity |
| Who Files | The US corporation or disregarded entity | The US person who is a shareholder, officer, or director |
| Purpose | Report transactions between foreign owner and US entity | Report ownership and financial details of foreign corporation |
| Penalty | $25,000 per form | $10,000 per form (plus additional penalties) |
| Can E-File? | No (fax or mail only) | Yes (with certain return types) |
Form 5472: Foreign Person Owns a US Entity
Form 5472 is filed when the ownership goes inward -- a foreign person or entity owns a US corporation or disregarded entity.
Typical scenario: You are a citizen of Germany, the UK, Brazil, or any other country. You formed a single-member LLC in Wyoming (or any US state). As a foreign owner of a US disregarded entity, you must file Form 5472.
Form 5472 reports the transactions between you and your LLC during the tax year -- things like capital contributions, distributions, loans, and payments for services. The IRS uses this information to ensure proper reporting and to detect transfer pricing issues.
Key Details About Form 5472
- Filed by the US entity (your LLC), not by you personally
- Attached to a pro forma Form 1120
- Reports transactions between the foreign owner and the LLC
- Must be faxed or mailed (no e-filing)
- Due April 15 (or October 15 with extension)
- $25,000 penalty per form for late or incomplete filing
Form 5471: US Person Owns a Foreign Entity
Form 5471 is filed when the ownership goes outward -- a US person (citizen, resident, or domestic entity) owns or controls a foreign corporation.
Typical scenario: You are a US citizen living abroad who owns a corporation in Ireland, Singapore, or another country. As a US person owning a foreign corporation, you must file Form 5471.
Form 5471 is significantly more complex than Form 5472. It requires detailed financial statements of the foreign corporation, information about its shareholders, and various schedules reporting income, earnings and profits, and transactions.
Key Details About Form 5471
- Filed by the US person (not the foreign corporation)
- Attached to the US person's income tax return (Form 1040 or 1120)
- Requires detailed financial statements of the foreign corporation
- Can be e-filed in many cases
- Due with the filer's income tax return
- $10,000 penalty per form for late or incomplete filing, with additional monthly penalties
How to Know Which Form You Need
Ask yourself one question: What is the direction of ownership?
- "I am a foreign person and I own a US entity" -- You need Form 5472
- "I am a US person and I own a foreign entity" -- You need Form 5471
It is possible to need both forms if you are involved in both directions of cross-border ownership. For example, if you are a US person who owns a foreign corporation that in turn owns a US subsidiary, you might need Form 5471 for the foreign corporation and Form 5472 for the US subsidiary.
Common Points of Confusion
Green card holders and dual citizens
If you hold a US green card, you are treated as a US person for tax purposes. If you own a foreign corporation, you would file Form 5471, not Form 5472. However, if you are not a US person (no green card, not a US citizen) and own a US LLC, you file Form 5472.
Partnerships and multi-member LLCs
If your US LLC has multiple members and is treated as a partnership, different rules may apply. Form 5472 applies to corporations and disregarded entities. Multi-member LLCs may have separate filing requirements.
Which form has higher penalties?
Form 5472 has a higher per-form penalty ($25,000) compared to Form 5471 ($10,000 initial). However, Form 5471 penalties can accumulate with an additional $10,000 for each 30-day period of continued failure, up to $60,000.
File Form 5472 with Filabl
If you are a foreign owner of a US LLC and need to file Form 5472, Filabl can help. We automate the generation of Form 5472 and the required pro forma 1120, and fax them directly to the IRS. The process takes about 20 minutes.