Taxes
Owing no tax and having nothing to file are not the same thing.
A foreign-owned US single-member LLC files a pro forma Form 1120 with Form 5472 attached, every year, whether or not it earned anything. Whether you also owe US income tax is a separate question, and it turns on facts a licensed preparer has to look at.
- $25,000
- Penalty for a missed Form 5472, for the year it was missed
- April 15
- Due date, extendable to October 15 on Form 7004
- No e-file
- The pro forma 1120 goes by fax or mail, not electronically
The blur that costs the most. Two questions, treated as one.
Two questions get blurred together constantly, and the blur is expensive. Owing no US tax and having nothing to file are not the same thing. The filing obligation follows from having a reportable transaction with a related party. Your own money going into the company is one. A year with no customers, no profit and no US tax due can still carry a return, and missing it costs $25,000.
What actually gets filed. And by when.
| Filing | Who it applies to | When |
|---|---|---|
| Pro forma 1120 with Form 5472 attached | Foreign-owned US single-member LLC treated as a disregarded entity | April 15, extendable to October 15 on Form 7004. Not e-filed: it goes by fax or mail. |
| Form 5472 | Any reporting corporation with a reportable transaction with a related party | Attached to the return above, for the same tax year |
| State annual report or annual tax | Every entity, in every state it is registered | Set by the state, not the IRS. Delaware LLCs owe a $400 annual tax on June 1 and file no annual report; other states invert that. |
It is not e-filed
What missing it costs. And what it keeps costing.
Missing it costs $25,000 for the year, assessed on the reporting corporation.
The part most services leave out is what happens after. Once the failure runs more than 90 days past an IRS notice, a further $25,000 applies per related party per 30-day period. That is why a missed form is worth dealing with in the month you notice it rather than the quarter.
What Prolify does here, and what it cannot. Worth reading before you buy.
Prolify tracks what is due and prepares the package. The right-hand column is the boundary, and it is worth knowing where it sits.
| Area | What Prolify does | What it does not do |
|---|---|---|
| Deadlines | Tracks the federal cycle and each state's own dates against your entity, and tells you what is coming before it is due. | Cannot promise you will never receive a late notice. Filing depends on information arriving from you and on agencies that set their own pace. |
| Preparation | Assembles the year-end package, with the books categorized so the reportable transactions are already separated. | Does not prepare or sign your return. |
| Filing | Coordinates the filing with the preparer and tracks it to confirmation. | Does not file on your behalf as your agent. The return is the preparer's work and your signature. |
| IRS correspondence | Helps you understand what a notice says and gets it in front of the right person. | Does not represent you before the IRS. Representation requires a credentialed representative holding a signed Form 2848, and Prolify employs none. Anyone promising audit representation without naming that person should be asked who they are. |
| Sales tax | Flags when your activity looks like it may create a nexus question worth asking a professional about. | Does not register, file or remit sales tax in any state. Nexus work belongs to a specialist, and this is not something Prolify sells. |
| Advice | Explains what a form is and when it is due, with the instruction quoted. | Does not tell you what you may deduct, whether your income is effectively connected, or what your treaty position is. Those are determinations, and they belong to a licensed professional. |
Questions founders ask. Answered in the open.
Do I need to file if my LLC had no revenue?
Almost certainly yes. The obligation follows a reportable transaction with a related party, not income, and funding your own company is one. A year with no customers is rarely a year with nothing to report.
What is Form 5472?
An information return reporting transactions between a US reporting corporation and its related parties. For a foreign-owned single-member LLC it is attached to a pro forma 1120 that is otherwise almost entirely blank. It reports the relationship and the transactions, not profit.
Does my LLC owe US income tax?
That is not a question this page can answer, and be wary of any page that does. It turns on whether your income is effectively connected with a US trade or business, which depends on where the work happens, who does it and what you sell. A licensed preparer makes that call on your facts.
What happens if I already missed one?
The penalty is $25,000 for the year, and it compounds past 90 days from an IRS notice. Many situations are recoverable through a reasonable-cause position, which has to be made by a credentialed representative rather than by Prolify. The realistic path gets put in writing before anything is filed.
Can you represent me if the IRS writes to me?
No. Representation before the IRS requires an enrolled agent, CPA or attorney holding a signed Form 2848, and Prolify has none on staff. We help you read the notice and get it to someone who can act on it. Any service promising audit representation should be asked to name the credentialed person doing it.
Do you employ CPAs?
No. The preparer signs. It is worth asking any service that implies otherwise who exactly is signing your return.
Know the date before it passes. That part is tractable.
Prolify tracks the federal and state dates your entity owes and coordinates the return with someone licensed to sign it.