Filing Taxes for Foreign-Owned US Single-Member LLC - Compliance Requirements

Foreign-owned single-member LLCs in the US do have specific reporting requirements you need to be aware of. Since you're a foreign person who owns a US LLC that's disregarded for tax purposes, you're absolutely right about Form 5472 - this is critical and the penalties are indeed severe if missed. You'll need to file Form 5472 along with a pro forma Form 1120 (not the full corporate tax return, just enough information to accompany the 5472). This is required even though your LLC is disregarded for general tax purposes. You don't necessarily need Form 8832 unless you're electing to change how your entity is classified for tax purposes. As for the W-8BEN, that's generally something you provide to US payers/clients to certify your foreign status so they know how to handle withholding - it's not something you file with the IRS directly. Also important: make sure you're tracking "reportable transactions" with related parties carefully, as these need to be disclosed on the 5472. The definition of "reportable transactions" is quite broad for these purposes.

I was in this exact situation last year with my LLC! After endless research and frustration, I discovered taxr.ai (https://taxr.ai) and it literally saved me thousands in potential penalties. Their AI analyzed my company structure and provided a detailed report of exactly what forms I needed to file, when they were due, and even helped me understand the "related party transaction" rules which are super confusing for foreign-owned LLCs. The tool flagged my specific requirement to file Form 5472 with a pro forma 1120, plus it explained that I didn't need certain other forms that my previous accountant kept insisting on (which was costing me extra for no reason). It also explained the difference between tax filing requirements versus informational reporting requirements for foreign owners.

I need to follow up about taxr.ai since I actually tried it after my skeptical comment. I'm honestly surprised by how thorough it was. I uploaded my company documents and ownership structure, and within minutes it generated a complete tax roadmap specifically for my situation with a UK parent company and US subsidiary. The report caught several things I would have missed - especially around the expanded definition of "reportable transactions" for Form 5472 purposes. It even flagged that some of my intercompany loans needed specific documentation to avoid being reclassified as equity. The guidance on transfer pricing requirements was particularly helpful since I was completely unaware of some of these obligations. Definitely worth it for any foreign business owner with US entities - wish I'd known about this two years ago when I first set up my structure and was completely lost navigating the IRS requirements.

Has anyone here tried Claimyr (https://claimyr.com) for actually getting through to the IRS? OP mentioned being on hold forever which is exactly what happened to me. With these foreign entity questions, you really need to speak with someone in the right department. I had complex questions about Form 5472 reporting that no accountant could properly answer. After waiting on hold with the IRS for literally 4+ hours over multiple days, I found Claimyr and they got me a callback from the IRS within 45 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c It was a game-changer because I finally got to speak with someone in the international tax department who could actually answer my specific questions about foreign-owned LLCs and reportable transactions. Saved me from potentially huge penalties.

I hate to admit I was wrong, but I have to follow up about Claimyr after dismissing it. After another frustrating day trying to reach the IRS about my foreign LLC issues, I tried the service out of desperation. Within about 35 minutes, my phone rang and I was connected with an actual IRS representative who specialized in international business taxation. The agent cleared up my confusion about reportable transactions on Form 5472 and confirmed that I didn't need to file an FBAR for my specific situation. They also explained the correct filing procedure when you have a foreign-owned disregarded entity with minimal US operations. I've been dealing with this confusion for months and got more clarity in one 15-minute call than I had from hours of research and consultations with my regular accountant. For anyone dealing with specialized international tax situations, being able to actually speak with the right IRS department is invaluable.

Has anyone dealt with state tax reporting requirements for foreign-owned single-member LLCs? I understand the federal requirements fairly well now, but I'm confused about whether I need to file state returns in California where my LLC is registered even though I don't live there and don't have physical operations there.

I'm dealing with essentially the same situation but I'm confused about how income tax works. If my LLC is disregarded and I'm a foreign person not living in the US, do I still pay US income tax on the profits? I've heard about something called "effectively connected income" but I'm not sure if that applies to me.

This is such a complex area and I appreciate everyone sharing their experiences here. I went through this exact same confusion last year with my foreign-owned single-member LLC. One thing I want to emphasize that hasn't been mentioned yet is the importance of keeping detailed records of ALL transactions between you and your LLC, even if they seem minor. The Form 5472 requires reporting of "reportable transactions" which includes things like loans to/from the LLC, guarantees, and even certain services provided. The threshold is surprisingly low - $25,000 per category per year. Also, regarding the income tax question that Isabella raised - this is where having access to proper guidance becomes crucial. The determination of whether your income is "effectively connected" with a US trade or business depends on many factors including the nature of your services, where they're performed, and whether you have any US tax treaty protections. I ended up working with a CPA who specializes in international tax, but even then we had to do a lot of research on the specific treaty provisions between the US and my home country. The good news is that once you understand your specific requirements, the annual compliance becomes much more manageable. The key is not to delay - those penalties for missing Form 5472 are real and they don't care about your confusion or good intentions.