Form 5471 vs Form 5472: The Difference, Who Files Which, and the Penalties

TL;DR

Form 5471 is for U.S. persons who own a foreign corporation. Form 5472 is for a U.S. corporation or LLC owned by a foreign person. Same purpose — telling the IRS about cross-border ownership and related-party dealings — opposite direction. If you are a non-U.S. person with a U.S. LLC, you file Form 5472 with a pro forma 1120, and Form 5471 is not yours. The penalties differ too: $10,000 per form for 5471, $25,000 per form for 5472. The decision table below settles most cases in one line.

The difference between Form 5471 and Form 5472, side by side

The memory hook: 5471 = American owning abroad; 5472 = foreigner owning in America.

Who owns what → which form

Find your row. “U.S. person” means a U.S. citizen, a resident (including green-card holders and people who meet the substantial presence test), or a U.S.-organized partnership, corporation, estate or trust.

Two rows deserve a note. A green-card holder living in Manila or Dubai who forms a Wyoming LLC is a U.S. owner: no 5472 for the LLC. And a non-U.S. person’s multi-member LLC is a partnership, which is a different filing system altogether — Form 5472 only re-enters the picture if the LLC elects corporate treatment on Form 8832.

Form 5471: the five filer categories at a glance

The Form 5471 instructions define the filer by category, and the category decides which schedules must be attached. The summary below is from the instructions; the exceptions (constructive ownership, multiple filers, foreign-controlled corporations) are numerous and the instructions should be read before relying on any of them.

A U.S. citizen who owns 100% of a company in, say, Germany is a Category 4 and Category 5 filer and attaches a full Form 5471 with income statement, balance sheet and earnings schedules to their Form 1040 every year. That is a materially heavier filing than Form 5472, which for a dormant LLC is a few pages of identification plus a one-paragraph statement.

Form 5472: the requirements at a glance

The Form 5472 instructions say a reporting corporation “must file Form 5472 if it had a reportable transaction with a foreign or domestic related party.” Unpacked:

• Reporting corporation — a 25% foreign-owned U.S. corporation “including a foreign-owned U.S. disregarded entity (DE),” or a foreign corporation engaged in a U.S. trade or business.
• 25% foreign shareholder — a foreign person owning at least 25% of vote or value, directly or indirectly, at any time in the year.
• Reportable transaction — money paid or received for the categories in Part IV (sales, rents, royalties, services, loans, interest…), anything in Part V (for DEs: formation, contributions, distributions), or nonmonetary transfers in Part VI.
• One form per related party. Line 1g asks for the total number of Forms 5472 filed for the year.
• Attached to Form 1120 — a real one for a corporation, a pro forma one for a disregarded LLC, with “Foreign-owned U.S. DE” written across the top and sent to the dedicated Ogden address.

For a foreign-owned LLC, the practical trap is the word “dormant.” Part V makes “amounts paid or received in connection with the formation … including contributions to, and distributions from, the entity” reportable, so an LLC whose owner paid the state fee personally usually has to file. The line-by-line walk is in our Form 5472 instructions, and the cover form is explained in what a pro forma 1120 is.

Penalties: Form 5471 vs Form 5472

Both are “information return” penalties — they apply even when no tax is due — but the amounts are not the same.

Note where the asymmetry bites. A U.S. citizen who forgets a 5471 for a small foreign company faces $10,000; a non-resident who forgets the 5472 for a Wyoming LLC with zero revenue faces $25,000 — for a form that would have reported a $150 formation fee. How the $25,000 Form 5472 penalty works covers assessment and response. If a year has already been missed, the past-due Form 5472 service files it with a reasonable cause statement; whether the IRS accepts that statement is the IRS’s decision.

When both forms apply

Layered structures produce both filings from one set of facts. Three patterns that come up:

1. U.S. person → foreign holding company → U.S. LLC. The U.S. person files Form 5471 for the foreign company (Category 4/5). The U.S. LLC is “a domestic DE that is wholly owned by a foreign person” — the foreign company — so it files Form 5472 with a pro forma 1120, listing the foreign company on Part II line 4a and the U.S. individual as the ultimate indirect owner on line 6a. The Form 5472 instructions contain an exception where a U.S. person’s Form 5471 (with Schedule M) can replace a Form 5472, but they add: “This exception does not apply to foreign-owned U.S. DEs.”
2. Foreign parent → U.S. corporation → foreign subsidiary. The U.S. corporation files Form 5472 for its transactions with the foreign parent and Form 5471 for the foreign subsidiary it controls, both attached to its real Form 1120.
3. A non-resident who later becomes a U.S. resident. Before residency, their U.S. LLC files 5472. After residency, the LLC is no longer foreign-owned, but any foreign company they still own may now require Form 5471 (Category 3 covers “a person who becomes a U.S. person while meeting the 10% stock ownership requirement”). The year of the status change often has one of each.

Most cross-border sellers with one LLC and no other companies are in none of these patterns. One LLC, one non-U.S. owner, one form: 5472.

What this comparison is not about

• Form 1040-NR is a non-resident’s personal income tax return. It can be required alongside Form 5472 when the LLC’s business creates U.S.-source income for the owner, but it is a separate question. See Form 1040-NR for LLC owners.
• The FBAR (FinCEN 114) reports foreign bank accounts of U.S. persons — including a U.S. LLC’s accounts outside the U.S. Does my foreign-owned LLC need an FBAR?
• Form 8832 is the election that changes an LLC’s classification. It is what would move a foreign-owned LLC from “5472 with pro forma 1120” to “5472 with a real 1120.”
• Form 5472 is not an income tax return and reports no tax. The pro forma 1120 it rides on is blank below the header.

A quick self-check

1. Are you a U.S. person — citizen, green-card holder, or resident by day count? If yes and you own 10% or more of a company organized outside the U.S., read the Form 5471 categories. Your U.S. LLC does not file 5472.
2. Are you a non-U.S. person who owns a U.S. LLC or 25% of a U.S. corporation? Form 5472. If the LLC is single-member, it goes with a pro forma 1120 by mail or fax, due April 15 (calendar year) or October 15 with a Form 7004 extension.
3. Is there a company between you and the LLC, or a company below it? Map the chain; each layer may carry its own form.
4. Not sure whether you are a “U.S. person” this year? That status — not your passport — decides which form applies, and it can change mid-year.

If you land on Form 5472, our Form 5472 + pro forma 1120 service prepares the package as a professional U.S. tax preparer and files it by mail or fax at a flat $349. If you land on Form 5471, it is a different engagement and we will say so.

Official references: IRS — Instructions for Form 5471 · IRS — Instructions for Form 5472 · IRS — About Form 5471 · IRS — About Form 5472 · Treas. Reg. §1.6038A-2 · Treas. Reg. §301.7701-2.

This article is general information, not tax or legal advice. Confirm the rules that apply to your specific situation before acting.