Form 5472 in 2026: What the BOI Exemption Changed (and Didn't Change)

In March 2025, FinCEN exempted almost all US-formed companies, including 100%-foreign-owned single-member LLCs, from Beneficial Ownership Information (BOI) reporting under the Corporate Transparency Act. That is real relief, but it applies to a completely different federal filing. Form 5472, filed with a pro forma Form 1120 under IRC §6038A, was untouched by that change, and it still carries the same $25,000 penalty. This guide explains what actually changed, what didn't, who must file Form 5472, and the single most surprising rule: you usually have to file even if your LLC did nothing all year. The following is general information, not tax advice — always confirm your position with a qualified cross-border tax advisor.

Does the BOI Exemption Mean You're Off the Hook for Form 5472?

No, and this is exactly the point tripping up foreign-owned LLC owners in 2026. In March 2025, FinCEN exempted essentially all US-formed companies, including 100%-foreign-owned single-member LLCs, from Beneficial Ownership Information (BOI) reporting under the Corporate Transparency Act (FinCEN.gov, 2025). As of mid-2026, that exemption is still in effect, and a final rule was still under OMB review as of June 2026 and has not reversed it.

But BOI is a FinCEN filing under the Corporate Transparency Act. Form 5472 and its pro forma Form 1120 are an entirely separate IRS filing under a different statute, IRC §6038A, and nothing about the BOI change touches it. If you own a foreign-owned US LLC, you may now be exempt from one federal filing, BOI, while still being fully on the hook for another, Form 5472, with the same $25,000 penalty regime that existed before the BOI rule changed at all.

Treat BOI and Form 5472 as two separate compliance tracks. The BOI exemption is real relief for beneficial-ownership paperwork, but it has no bearing on the IRC §6038A information return, the pro forma 1120 that accompanies it, or the $25,000 penalty for missing either one.

What Form 5472 Is — and Who Must File It

Form 5472 is an IRS information return used to report transactions between a US business and its related foreign parties. Since 2017, the rules extend it to foreign-owned single-member US LLCs. A single-member LLC is normally a "disregarded entity" for US tax purposes — but when its owner is a non-US person, the IRS treats it as a domestic corporation solely for Form 5472 reporting. In practical terms: if you are a non-resident and you own 100% of a US LLC, this form very likely applies to you. This is general information, not tax advice — consult a qualified cross-border tax advisor.

For founders in the UAE and the wider Gulf, Form 5472 matters even more. There is no income tax treaty in force between the US and the UAE, so you generally cannot lean on treaty provisions to reduce US reporting. That makes Form 5472 the primary federal compliance obligation most Gulf-based owners of US LLCs face each year.

The $25,000 Penalty — What Triggers It

The headline number is real. The IRS penalty for failing to file Form 5472 — or for filing it late, incomplete, or substantially incorrect — is generally $25,000 per form, per year. It is not tied to how much money moved through your LLC, which is why even a dormant entity can face the full amount.

Worse, the penalty can repeat. If the failure isn't resolved within 90 days after the IRS sends you a notice, an additional $25,000 applies for each further 30-day period, with no maximum penalty amount. A single overlooked filing can therefore grow well beyond the initial $25,000 if it is ignored (IRS.gov, updated January 15, 2026). This is general information, not tax advice — a qualified cross-border tax advisor can assess your exposure and any reasonable-cause relief.

How You File: Form 5472 + a Pro Forma 1120

Here is the part that confuses people: a foreign-owned single-member LLC does not file Form 5472 on its own. It attaches Form 5472 to a "pro forma" Form 1120 (the US corporate income tax return). The 1120 is not a full corporate return here — it functions as a cover sheet carrying the entity's identifying information, while Form 5472 reports the actual related-party transactions. This is an overview, not a step-by-step instruction set, and the mechanics should be reviewed with a qualified cross-border tax advisor.

Deadlines: April 15 and the Form 7004 Extension

For a calendar-year LLC, Form 5472 and its pro forma Form 1120 are generally due by April 15. If you need more time, you can file Form 7004 on or before that date to request a roughly six-month extension (to around October 15). The extension covers the filing, and the deadline can shift slightly for weekends and holidays, so verify the exact date each year. This is general information, not tax advice — confirm timing with a qualified cross-border tax advisor.

What Counts as a Reportable Transaction

Form 5472 reports "reportable transactions" between the LLC and its foreign owner (or other related foreign parties). The categories below are a plain-language summary — the legal definitions are broader, so treat this as orientation rather than a checklist:

Notice that the very first item — your initial capital contribution to fund the LLC — is itself a reportable transaction. That is exactly why a brand-new LLC with no customers can already have a filing obligation.

Filing When the LLC Has Zero Income or Activity

This is the most misunderstood rule, so it's worth repeating: a foreign-owned single-member LLC can be required to file Form 5472 even with no revenue, no customers, and no profit. Because forming and funding the entity, lending it money, or paying its startup costs can each be reportable transactions with the foreign owner, a "dormant" LLC is frequently not exempt. Assuming silence equals safety is how founders walk into the $25,000 penalty. When in doubt, file — and confirm with a qualified cross-border tax advisor.

The Final Form 5472 When You Dissolve

Closing the LLC is not the end of the obligation. In the year you dissolve a foreign-owned single-member LLC, you generally file a final Form 5472 with a final pro forma Form 1120, capturing the last reportable transactions — including any closing distribution of remaining funds to you as the foreign owner. Walking away without this final filing can leave penalty exposure open on a company you thought was gone. This is general information, not tax advice — handle dissolution with a qualified cross-border tax advisor.

What OpenEntity's Plan Covers in Year 1

OpenEntity sets up the foundations that make Form 5472 compliance manageable for non-resident founders. Year 1 includes your US LLC formation, EIN, and registered agent — the EIN in particular is a prerequisite for filing Form 5472 at all. From there, you have a clean, properly identified entity ready for its annual information-reporting obligations. OpenEntity is a business formation and consulting service, not a tax-preparation or law firm; we help you get organized, and we recommend pairing that with a qualified cross-border tax advisor for the filing itself.

Form 5472 — FAQ