Missed years: how to catch up

Many owners discover the Form 5472 duty years after they formed the LLC. The LLC was formed, the money went in, business carried on, and no one mentioned a form. Then the owner reads about the $25,000 penalty, counts the years, and wonders whether it is already too late. It is not too late. Missed years can be filed, and filing them is the only way to stop the exposure from growing. This page explains how.

First, find out what is missing

Before filing anything, work out which years are actually missing. Form 5472 is required for every year in which the LLC had a reportable transaction with its foreign owner or another related party: a capital contribution, a distribution, or a loan. The formation year counts in practice, because the money spent forming the LLC is normally paid by the owner and is a capital contribution. A later year with no reportable transactions at all requires no Form 5472 for that year.

Go through the records year by year. For each year, note whether money moved between the LLC and its owner or a related party, and in which direction. Bank statements, formation invoices, loan documents and distribution records are the evidence. If the records for a year are thin, say so to the tax professional who helps with the filing: a gap in the records is a fact to work with, not a reason to guess.

What to file, and in what order

For each missed year, file that year's Form 5472 attached to a pro forma Form 1120 for the same year. The pro forma 1120 is a cover sheet only: write "Foreign-owned U.S. DE" across the top, fill in the name and address, item B (the EIN) and item E, and leave the rest blank. Each year gets its own pair of forms, filed for that year.

The practical approach is to file each missed year, starting with the oldest. The oldest year is the one that has been open the longest, and clearing it first gives the filing a clean sequence. A tax professional should sequence the filing for your case, because the right order can depend on the facts, including whether an IRS notice has already arrived for a particular year. Do not let the question of order delay the filing itself: the order is a detail, and the filing is the substance.

Form 5472 filed by a foreign-owned US disregarded entity cannot be e-filed. Each year's filing goes by fax to 855-887-7737 or by mail to the IRS, 1973 Rulon White Blvd, M/S 6112, Attn: PIN Unit, Ogden, UT 84201. Keep proof of every filing: the fax confirmation or the mailing receipt, for each year, filed separately.

What to expect

Expect penalty exposure. Each missed Form 5472 carries a penalty of $25,000 per form per year, so the exposure is the number of missed years times $25,000. Filing the returns does not make the penalty disappear on its own, and no one can promise that it will. What filing does is stop the position from getting worse: once a year is filed, that year is closed, and the continuation penalty cannot run on a filed year.

Expect to raise reasonable cause. The IRS can abate the $25,000 penalty where the failure was due to reasonable cause and not willful neglect. That is a possibility to raise with a tax professional, not a promise. A reasonable cause statement is normally prepared with the filing, and it sets out the facts that explain why the returns were missed. A professional can judge whether the facts support it.

Expect the process to take time. A catch-up that covers several years is several filings, each prepared for its own year, and the IRS processes them in its own time. The owner does not need to wait for one year to be processed before filing the next. File the years, keep the proofs, and keep a record of what was filed and when.

What not to do

Do not backdate a return. A return must show the date it was actually filed. A false date creates a second problem on top of the first, and it undermines any reasonable cause statement made with the filing.

Do not ignore an IRS notice. If a notice has arrived, the 90-day period before the continuation penalty starts is already running, and a further $25,000 applies for each 30-day period the failure continues after it. Read the notice, note its date, and act on it before anything else.

Do not file a return in the wrong manner to save time. Form 5472 filed by a foreign-owned US disregarded entity cannot be e-filed, and a return sent through a channel the IRS does not accept is still not filed. Do not file only the most recent year and leave the earlier years open: the exposure sits in the earlier years, and they need their own filings.

After the catch-up

Once the missed years are filed, the duty does not end. It repeats every year, for as long as the LLC has reportable transactions. Put the next deadline in the calendar now: Form 5472 is due April 15, with an extension to October 15 on Form 7004. A filing that is late once is a mistake. A filing that is late every year is a pattern, and the pattern is what the penalty is designed to stop.

If the LLC is being closed, the final year still needs its own filing, marked as the final return, and the EIN account still needs to be closed with the IRS. The final return guide covers that step.

Last reviewed: November 2026. Sources: IRS Instructions for Form 5472