Missed Filing Form 5472 and Form 1120

[andrew28fl]

Hey Guys,

So i have a US Single Member LLC I have missed filing Form 5472 and Form 1120 for 2 years. Had anyone else dealt with a similar situation? What are my options? Should I just dissolve the LLC and form a new one, or is there any way to retroactively file the forms and not get in trouble with the IRS? Thank you for your inputs.

 

[Eldorado]

andrew28fl said:
Hey Guys,

So i have a US Single Member LLC I have missed filing Form 5472 and Form 1120 for 2 years. Had anyone else dealt with a similar situation? What are my options? Should I just dissolve the LLC and form a new one, or is there any way to retroactively file the forms and not get in trouble with the IRS? Thank you for your inputs.
Click to expand...

The question is, have you paid all mandatory, taxes/franchises/fees to the state anyway? If not, probably you LLC has been dissolved because of this.
Try to ask your Registered Agent first

 

[andrew28fl]

Eldorado said:
The question is, have you paid all mandatory, taxes/franchises/fees to the state anyway? If not, probably you LLC has been dissolved because of this.
Try to ask your Registered Agent first
Click to expand...

Yes that part has been handled in a timely fashion. Just wasn't aware of the IRS forms so looking for guidance.

 

[dreadpiraterob]

I talked to a tax lawyer about this. Rectifying it now will come with huge fines for non compliance on the IRS side (20k plus). Chances are low that the IRS will come after you if you do nothing. Especially if the LLC did not move much money. So in essence, just wait and likely you will not have any trouble.

 

[Novice]

dreadpiraterob said:
I talked to a tax lawyer about this. Rectifying it now will come with huge fines for non compliance on the IRS side (20k plus). Chances are low that the IRS will come after you if you do nothing. Especially if the LLC did not move much money. So in essence, just wait and likely you will not have any trouble.
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Is dissolving the LLC a wise move to have a peace of mind?

 

[andrew28fl]

Eldorado said:
The question is, have you paid all mandatory, taxes/franchises/fees to the state anyway? If not, probably you LLC has been dissolved because of this.
Try to ask your Registered Agent first
Click to expand...

Thank you. I am thinking to start with a fresh LLC and bank accounts, just dissolve the old one. Or should I rather just start filing the right forms with the old entity? Thanks again for your time!

 

[Eldorado]

andrew28fl said:
Thank you. I am thinking to start with a fresh LLC and bank accounts, just dissolve the old one. Or should I rather just start filing the right forms with the old entity? Thanks again for your time!
Click to expand...

If I were you, I'd start a new one. But be aware IRS may flag you/your LLC in case of previous records. Even if the incorporating will go through smoothly, next April you'll have to report to IRS again, and who knows if they will not associate you with previous company.

 

[EuroKiss]

You have no obligations unless ETBUS or at least one “reportable transaction”. Opening a bank account is not a “reportable transaction” btw.

Last edited: Feb 15, 2022

 

[startfleetio]

EuroKiss said:
You have no obligations unless ETBUS or at least one “reportable transaction”. Opening a bank account is not a “reportable transaction” btw.
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Paying for registered agent and company formation provider is reportable transaction

 

[EuroKiss]

startfleetio said:
Paying for registered agent and company formation provider is reportable transaction
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All the info is in the form 5472, I suggest OP to simply read and follow instructions, i consider them pretty much explicative and clear enough. Second step, hire an accountant, but he/she must skilled about Alien SMLLC.

 

[Eldorado]

startfleetio said:
Paying for registered agent and company formation provider is reportable transaction
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But you approach an agent as a person, the deal is done between the agent and you, right? Why then pay for agent's services extension from LLC account, if you can just follow already made deal and pay with your private money as ETBUS?

 

[startfleetio]

Read the articles in 26 CFR § 1.482-1(i)(7) you will see it includes formation and dissolution of the company

Eldorado said:
But you approach an agent as a person, the deal is done between the agent and you, right? Why then pay for agent's services extension from LLC account, if you can just follow already made deal and pay with your private money as ETBUS?
Click to expand...

Read the articles in 26 CFR § 1.482-1(i)(7) you will see it includes formation and dissolution of the company

 

[FilipinoLawyer]

andrew28fl said:
Hey Guys,

So i have a US Single Member LLC I have missed filing Form 5472 and Form 1120 for 2 years. Had anyone else dealt with a similar situation? What are my options? Should I just dissolve the LLC and form a new one, or is there any way to retroactively file the forms and not get in trouble with the IRS? Thank you for your inputs.
Click to expand...

These forms are for foreign owned disregarded entities, correct? Can I confirm if you also pay self employment tax for your LLC?

 

[andrew28fl]

WeWrite said:
These forms are for foreign owned disregarded entities, correct? Can I confirm if you also pay self employment tax for your LLC?
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Yes, foreign owned disregarded entities. As far as I know, there are no taxes for the LLC. It's as if the entity didn't exist. Everything falls on you as the owner, so you have to include everything on your personal tax return based on the country of your tax residency.

 

[FilipinoLawyer]

andrew28fl said:
Yes, foreign owned disregarded entities. As far as I know, there are no taxes for the LLC. It's as if the entity didn't exist. Everything falls on you as the owner, so you have to include everything on your personal tax return based on the country of your tax residency.
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Yes, i was planning to set up California LLC before. Did my research. Found out that on top of the California franchise tax of $800. I had to pay extra fee if income goes up to $250,000. This does not include the federal taxes. I was not sure about the federal taxes though. Did you the federal tax on top of the state taxes?

 

[startfleetio]

FilipinoLawyer said:
Yes, i was planning to set up California LLC before. Did my research. Found out that on top of the California franchise tax of $800. I had to pay extra fee if income goes up to $250,000. This does not include the federal taxes. I was not sure about the federal taxes though. Did you the federal tax on top of the state taxes?
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Why do you want to register in California, read our best US States for Non-US residents here
https://startfleet.io/guide/best-us-states-for-foreigners-to-form-an-llc

 

[Marzio]

startfleetio said:
read our best US States for Non-US residents here
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Why does State Corporate Income Tax matters for foreigners?

 

[FilipinoLawyer]

startfleetio said:
Why do you want to register in California, read our best US States for Non-US residents here
https://startfleet.io/guide/best-us-states-for-foreigners-to-form-an-llc[/URL
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startfleetio said:
Why do you want to register in California, read our best US States for Non-US residents here
https://startfleet.io/guide/best-us-states-for-foreigners-to-form-an-llc
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Most of my clients are from California. Initially, I thought it was a good idea. Then I started researching about the tax implications. I can tolerate the tax. its just the uncertainty of which documents to file and how much to pay for the federal income tax that is tough for me

 

[startfleetio]

marzio said:
Why does State Corporate Income Tax matters for foreigners?
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It won't matter much assuming they are not ETBUS and has US Source Income. But in the event that they have (maybe in the future when the company decided to expand), generally it will also affect their state nexus position as well.

It's better to just register in Wyoming and not worry about these issues. And not to mention, the Californian FTB is known to send Request for Tax Return (FTB 4600), or a Notice of Proposed Assessment (NPA) regularly even when you just have a Californian Mailing Address.

FilipinoLawyer said:

Most of my clients are from California. Initially, I thought it was a good idea. Then I started researching about the tax implications. I can tolerate the tax. its just the uncertainty of which documents to file and how much to pay for the federal income tax that is tough for me
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If you are ready to pay taxes, it is always Federal + State taxes.