Form 5472 Explained: What It Is, Who Must File, and How It Works (2025-2026)

What Is Form 5472?

Form 5472 is an information return titled "Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business." It is required under IRC Sections 6038A and 6038C.

The form does not calculate any tax. Instead, it reports transactions between a U.S. entity and its foreign related parties. The IRS uses this information to verify that transactions between related parties are conducted at arm's length — meaning at fair market value, as if the parties were unrelated.

Who Must File Form 5472?

Three types of entities are required to file Form 5472:

1. 25% foreign-owned U.S. corporations — Any U.S. corporation where a foreign person owns directly or indirectly at least 25% of the voting power or total value of stock.

2. Foreign corporations engaged in a U.S. trade or business — A foreign corporation that conducts business activities within the United States.

3. Foreign-owned U.S. disregarded entities — This is the most common scenario for our readers. If you are a foreign person who owns a single-member LLC formed in the United States, your LLC is treated as a "reporting corporation" solely for the purpose of Form 5472 filing. This rule took effect for tax years beginning after January 1, 2017.

A separate Form 5472 must be filed for each related party with whom the reporting corporation had reportable transactions during the tax year.

What Is a "Reporting Corporation"?

A reporting corporation is the entity required to file Form 5472. For foreign-owned single-member LLCs, the LLC itself is the reporting corporation — even though it is normally "disregarded" (ignored) for federal tax purposes.

The IRS created a special rule that treats foreign-owned disregarded entities as corporations solely for the purpose of Form 5472 reporting. This is why your single-member LLC must file a pro forma Form 1120 (U.S. Corporation Income Tax Return) as a "cover sheet" to attach Form 5472 — even though the LLC is not actually taxed as a corporation.

What Is a "25% Foreign Shareholder"?

A 25% foreign shareholder is any foreign person who owns, directly or indirectly, at least 25% of the total voting power or total value of all classes of stock of a U.S. corporation. For a single-member LLC with one foreign owner, the owner is by definition a 100% foreign shareholder.

Ownership is determined using the constructive ownership rules of Section 318, with a 10% threshold substituted for the usual 50% threshold. This means ownership attributed through family members, partnerships, corporations, trusts, and estates can count toward the 25% threshold.

What Is a "Related Party"?

A related party includes any direct or indirect 25% foreign shareholder, any person related to the reporting corporation or its 25% foreign shareholders under IRC Sections 267(b) or 707(b)(1), and any other person related under the principles of Section 482.

For a typical foreign-owned single-member LLC, the most common related party is the foreign owner themselves. If the foreign owner also owns other companies, those companies may also be related parties if there are transactions between them and the LLC.

The Pro Forma Form 1120 Requirement

Foreign-owned U.S. disregarded entities must file a pro forma (simplified) Form 1120 along with Form 5472. This is not a full corporate tax return — it serves only as a vehicle to deliver Form 5472 to the IRS.

On the pro forma Form 1120, you write "Foreign-owned U.S. DE" across the top of the form. You only need to complete the entity name, address, and items B (employer identification number) and E (date incorporated) on the first page. All income, deduction, and tax lines are left blank or entered as zero.

The pro forma 1120 shows zero tax liability. It exists purely because the IRS needs a "parent return" to process the attached Form 5472.

How Is Form 5472 Different from Other International Forms?

Form 5472 is often confused with other international information returns. Here is how it differs:

Form 5471 is for U.S. persons who own shares in foreign corporations — the opposite direction of ownership from Form 5472.

Form 8865 is for U.S. persons with interests in foreign partnerships.

Form 3520 is for reporting transactions with foreign trusts and receipt of foreign gifts.

FBAR (FinCEN Form 114) reports foreign bank accounts and is filed with the Treasury Department, not the IRS.

Form 5472 specifically targets transactions between foreign owners and their U.S. entities. If you are a foreign person who owns a U.S. LLC, Form 5472 is your primary annual filing obligation.