If you’re a consultant running a U.S. company from abroad, you may be wondering whether the IRS requires you to file Form 5472. The short answer: if your consulting business is structured as a foreign-owned single-member LLC or as a corporation with foreign ownership of 25% or more, then yes—you likely have to file it.
If your business is a multi-member LLC treated as a partnership, then Form 5472 usually doesn’t apply.
This guide explains what Form 5472 is, when it applies, why the type of business (consulting, e-commerce, SaaS, marketing agency, etc.) doesn’t matter, and how to avoid the $25,000 penalties for non-compliance. We’ll focus here on a consulting business example, but the rules are the same no matter what services you provide.
What is Form 5472?
Form 5472 is an IRS information return used to report transactions between a U.S. entity and its foreign owners or related parties. It is not a tax return itself, but rather a disclosure form that lets the IRS monitor money and value moving between your company and non-U.S. persons.
If you have a foreign-owned U.S. single-member LLC or a corporation with foreign shareholders, you may need to file it each year.
Think of it this way: if your U.S. consulting business is connected to you abroad, and money moves between the two, the IRS wants to know about it. Even if you had no clients and no revenue, if you transferred funds into the company or paid yourself back from it, that is enough to trigger the filing requirement.
Who must file Form 5472?
The obligation depends on your entity type and not on your line of work. The IRS does not care whether you run a consulting business, an e-commerce shop, or a SaaS company—it only looks at how your company is structured.
- A foreign-owned single-member LLC must file Form 5472 with a pro forma Form 1120. This applies even if the only transaction was wiring in money to cover expenses.
- A U.S. corporation with 25% or more foreign ownership must file Form 5472 with its full Form 1120.
- A multi-member LLC treated as a partnership files Form 1065 and does not file Form 5472.
How to know what type of company you have
This can be confusing, especially if you used a formation company that just handed you documents without much explanation. Here are some ways to figure it out:
- If you registered an LLC and you are the only owner, you almost certainly have a single-member LLC unless you specifically elected to be taxed as a corporation. A quick way to check is to look at your IRS letter confirming your EIN.
If it refers to your business as a “disregarded entity,” does not mention Form 1120 or 1065, or lists the owner’s name followed by “Sole Mbr,” then you likely have a single-member LLC.
- If you registered an LLC with more than one owner listed on the formation documents, you probably have a multi-member LLC. By default, the IRS treats this as a partnership, which means it files Form 1065, not Form 5472.
On your EIN confirmation letter, the name of the person who applied may be followed by “Mbr,” which is another indicator that the LLC is multi-member.
- If you registered a corporation (for example, a Delaware C-Corp), you are required to file Form 1120 every year. If foreign shareholders own at least 25% of it, you also need Form 5472.
- If you or your accountant ever filed an election with the IRS (Form 8832 or 2553) to be taxed differently, that can change your classification. For example, a single-member LLC can elect to be taxed as a corporation. If you are unsure, check whether such a form was ever filed.
If you don’t know which category you fall into, reviewing your EIN confirmation letter or asking your formation company what was filed can clear things up.
What information goes on Form 5472?
The IRS asks for details about your company, its foreign owner, and any transactions between them. This includes the company’s EIN, legal name, and address, as well as your name, country of residence, and ownership percentage. The most important part is reporting transactions like capital contributions, loans, reimbursements, or payments from the company to you.
For a consulting business, the most common situation is when the owner wires money from abroad into the company’s U.S. bank account to pay expenses, or when the company reimburses the owner for costs. Even if you had no clients, those transactions mean Form 5472 still needs to be filed.
When is Form 5472 due?
The deadline for Form 5472 matches the corporate tax return deadline. For calendar-year companies, it is April 15, with an extension to October 15 available if you file Form 7004. Importantly, Form 5472 is never filed on its own—it must always be attached to either a pro forma Form 1120 (for single-member LLCs) or a full Form 1120 (for corporations).
Missing the deadline can be extremely costly. The IRS penalty for a late, incomplete, or missing Form 5472 is $25,000 per year. If you continue ignoring notices, the penalties can stack in additional $25,000 increments. These penalties apply even if your business had no revenue.
Common questions consultants ask
Many consultants first ask whether the type of consulting matters. It does not. Whether you are a marketing consultant, IT consultant, business coach, or freelance designer, the filing requirement is based only on your entity structure.
Another common question is whether they need to file if the company had no income. The answer is usually yes. If there were any transactions between you and the business, such as wiring in funds or paying expenses, you should file Form 5472. The IRS does not care that you had no clients—it only looks for those reportable transactions.
Some founders also ask what to do if they already missed a filing. Bookmate does not typically prepare back filings on your behalf, but we can guide you through how to approach catch-up filings if you discover you are behind.
How to stay ahead of Form 5472
The best way to avoid penalties is to keep your records clean. Anytime you transfer money into the business, note whether it is a capital contribution or a loan. Anytime the business pays you back, document it clearly. Even small amounts should be tracked.
When tax season comes, having a clear record of these movements makes it much easier to prepare an accurate Form 5472.
It also helps to file early. Waiting until the last minute makes it harder to correct mistakes if the IRS raises questions. Filing well before the deadline gives you peace of mind.
Example for consultants
Imagine a consultant based in Brazil who forms a Delaware single-member LLC. In the first year, she has no clients and no revenue, but she wires $15,000 from her personal account in Brazil to the company’s U.S. account to pay for software and contractor costs. Even though no money came in from clients, this is still a reportable transaction.
She is required to file Form 5472 with a pro forma 1120. By doing so, she avoids the $25,000 penalty and keeps her company compliant.
How Bookmate helps consultants
Bookmate specializes in handling U.S. federal filings for foreign-owned businesses. For consultants, this means preparing and submitting Form 5472 together with the pro forma 1120 if you own a single-member LLC, or attaching Form 5472 to the full Form 1120 if you operate as a corporation.
We make sure the deadlines are met and that the filings are submitted correctly from within the U.S., which avoids issues with international mailing.
We do not handle EIN or ITIN applications directly, but we can recommend formation companies for EIN support, and for ITINs we partner with theitin.com. For past filings, we typically do not submit them ourselves, but we can help guide you through what steps to take.
Final thoughts
If you’re running a consulting business through a U.S. entity, the real question is not what services you sell but how your company is structured. If you own a foreign-owned single-member LLC or a corporation with foreign shareholders, Form 5472 is almost always required.
Even without revenue, you should still file if there were any owner-related transactions. Missing the filing risks $25,000 penalties, which can easily be avoided with timely, accurate compliance.
Bookmate helps consultants worldwide stay compliant with these rules so they can focus on growing their businesses instead of worrying about IRS deadlines.
Learn more at trybookmate.co or book a consultation today.
