Foreign-Owned US Disregarded Entity: Getting an EIN for Form 5472 Filing

What is a foreign-owned U.S. disregarded entity?

A foreign-owned U.S. disregarded entity is typically a domestic single-member LLC that is wholly owned by a foreign person (an individual who is neither a U.S. citizen nor a U.S. resident, or a foreign entity). Under the default IRS classification rules, a single-member LLC is treated as a disregarded entity, meaning it is not recognized as separate from its owner for most tax purposes.

However, even though the entity is "disregarded" for income tax purposes, it has specific reporting obligations. The IRS requires it to file a pro forma Form 1120 with Form 5472 attached to report transactions with its foreign owner.

How do you fill out Form SS-4 specifically for this entity type?

The IRS instructions for Form SS-4 explicitly address foreign-owned U.S. disregarded entities. Here is how the key lines should be completed:

Line 9a (Type of Entity): Check "Other" and write "Foreign-owned U.S. disregarded entity-Form 5472."

Line 10 (Reason for Applying): Write "Foreign-owned U.S. disregarded entity filing Form 5472."

These entries tell the IRS exactly what kind of account to set up for your entity, ensuring your future Form 5472 filings are processed correctly.

What filing obligations come with this EIN?

Once you have your EIN, your entity must file a pro forma Form 1120 with Form 5472 attached annually. The pro forma Form 1120 is a simplified version — you write "Foreign-owned U.S. DE" across the top and fill in only the identifying information (name, EIN, address). You do not report income or calculate tax on this form.

Form 5472 reports reportable transactions between the disregarded entity and its foreign owner or other related parties. Even transactions as basic as capital contributions or use of the owner's personal funds count as reportable transactions.

Can you e-file the pro forma Form 1120 with Form 5472?

No. As of now, the pro forma Form 1120 with Form 5472 for foreign-owned disregarded entities cannot be e-filed. You must paper-file by mailing it to the IRS.

The IRS has a dedicated mailing address for these filings. Check the current Form 5472 instructions for the correct address (typically the Ogden, Utah IRS center). There is also a fax number available for submission in certain circumstances.

What are the penalties for not filing?

The penalty for failing to file Form 5472 is $25,000 per form, per year. This penalty applies regardless of whether the LLC had any income. Simply forming the LLC and contributing capital creates a reportable transaction that triggers the filing requirement.

The penalty can be even higher if the IRS sends a notice and you fail to respond within 90 days (an additional $25,000 for each 30-day period of continued failure, up to a maximum that can reach $150,000 or more).