If you run a staffing or recruiting agency through a U.S. company but live abroad, you may be asking whether you need to file Form 5472 with the IRS. The answer doesn’t depend on whether you place tech talent, remote workers, or executives. It depends on the type of entity you formed.
If your agency is a foreign-owned single-member LLC or a corporation with at least 25% foreign ownership, then yes, Form 5472 must be filed. If it is a multi-member LLC taxed as a partnership, Form 5472 generally does not apply.
This guide explains what Form 5472 is, how to know your company’s structure, what transactions must be reported, and why even agencies without clients must still file. We’ll also walk through a recruiting-specific example and explain how Bookmate helps staffing businesses stay compliant.
What is Form 5472?
Form 5472 is an IRS information return that discloses transactions between your U.S. company and its foreign owners. It does not calculate or pay taxes itself, but the IRS requires it to track money and property moving across borders. If your staffing or recruiting agency is foreign-owned and structured as a single-member LLC or corporation, Form 5472 almost certainly applies.
For staffing agencies, common reportable transactions include wiring money from abroad to cover payroll or software, reimbursing yourself for expenses, or paying contractor fees. Even if no client deals were closed, these transactions make filing mandatory.
Who must file Form 5472?
The requirement depends only on entity type:
- A foreign-owned single-member LLC must file Form 5472 with a pro forma Form 1120.
- A U.S. corporation with 25% or more foreign shareholders must file Form 5472 with the full Form 1120.
- A multi-member LLC treated as a partnership files Form 1065 instead, not Form 5472.
How to know what type of company you have
If you used a formation company, you may not know for sure. Here’s how to check:
- If you formed an LLC with one owner, you likely have a single-member LLC. Your EIN confirmation letter may list your name with “Sole Mbr” or describe the entity as a “disregarded entity.”
- If you formed an LLC with multiple owners, you probably have a multi-member LLC. In this case, the EIN letter may list the applicant’s name with “Mbr.” Multi-member LLCs file Form 1065.
- If you formed a corporation (such as a Delaware C-Corp), you must file Form 1120 each year. If 25% or more of it is foreign-owned, you also must file Form 5472.
- If you or an accountant filed Form 8832 or 2553 to change your tax classification, that election controls how you are treated.
What information goes on Form 5472?
The IRS requires information about your company, its owners, and all reportable transactions. For staffing agencies, these transactions may include owner contributions to cover payroll, ATS software, or marketing costs, as well as reimbursements back to the owner. Even without clients, these transactions must be reported.
When is Form 5472 due?
Form 5472 follows the corporate tax return calendar. For calendar-year companies, it is due April 15, with an extension to October 15 available by filing Form 7004. The form must always be attached to either a pro forma Form 1120 (for single-member LLCs) or a full Form 1120 (for corporations).
The IRS penalty for late or missing filings is $25,000 per year. Additional $25,000 penalties may apply if notices are ignored. These apply even when your staffing agency had no placements or revenue.
Common questions staffing agency founders ask
Does the type of staffing I do matter? No. Whether you place engineers, healthcare workers, or executives, the requirement depends only on entity type and ownership.
Do I need to file if I had no clients? Yes. If you funded the company, paid expenses, or reimbursed yourself, those transactions require reporting.
What if I missed a year? Bookmate does not usually prepare past filings, but we can guide you on how to address them properly.
Staying ahead of filing
Track every transfer between you and your company. For staffing agencies, this may include payments for payroll deposits, LinkedIn ads, or recruiting software. Keeping clear records ensures accurate reporting and makes filing Form 5472 easier. Filing early helps avoid IRS penalties.
Example for a staffing or recruiting agency
A founder in South Africa forms a Delaware single-member LLC to run a recruiting agency focused on tech talent. In the first year, no clients are signed, but she wires $10,000 into the company’s account to pay for LinkedIn ads and applicant tracking software.
Even without revenue, these transactions are reportable. She must file Form 5472 with a pro forma 1120 to avoid the $25,000 penalty.
How Bookmate helps staffing agencies
Bookmate specializes in U.S. federal filings for foreign-owned companies. For staffing and recruiting agencies, we:
- Prepare and file Form 5472 with the pro forma 1120 for single-member LLCs.
- Prepare and file Form 1120 with Form 5472 attached for corporations with foreign shareholders.
- File from within the U.S., ensuring the IRS accepts them.
- Provide guidance on how to approach past filings if you missed them.
We don’t apply for EINs or ITINs directly, but we partner with theitin.com for ITINs and recommend formation companies for EIN support. Our role is ensuring your IRS filings are timely and penalty-free.
Final thoughts
Running a staffing or recruiting agency through a U.S. entity as a foreign founder is common, but IRS compliance is critical. The IRS doesn’t care what kind of workers you place—it only cares about your company’s structure. If you are a foreign owner of a single-member LLC or a corporation, Form 5472 is almost always required.
Even without clients, you must file if there were owner-related transactions.
Bookmate helps staffing founders around the world stay compliant, so you can focus on growing your placements instead of worrying about IRS penalties.
Learn more at trybookmate.co or book a consultation today.
