Form 5472 Penalty Resolved:
Client Results & Success Stories
Every year, thousands of foreign LLC owners receive unexpected IRS penalty notices — not because they did anything wrong, but because they didn't know Form 5472 existed.
The cases below represent the situations we see most often at Form5472.online. Names and identifying details have been changed to protect client privacy. The outcomes are real.
$2.1M+
Total penalties resolved for clients
100+
Countries with clients we've served
20 Years
of IRS compliance experience
48hrs
Average turnaround time
🇩🇪 Country: Germany
Entity:Single-Member LLC, Wyoming
Issue: 3 Years Missed Filings
Penalty: $75,000
A German entrepreneur formed a Wyoming LLC to sell products on Amazon. His local accountant handled German taxes but had no experience with U.S. international filings — Form 5472 was never mentioned.
Three years later, an IRS notice arrived assessing $25,000 per unfiled year. Our team prepared three years of delinquent filings and drafted a comprehensive reasonable cause statement documenting his good faith reliance on a tax professional.
Penalty abatement approved. Total $75,000 in penalties reduced to $0.
🇬🇧 Country: United Kingdom
Entity:Single-Member LLC, Delaware
Issue: Filed Without Form 1120
Penalty: $25,000
A UK-based SaaS founder filed Form 5472 each year — but as a standalone document, without the required pro forma Form 1120 attachment. After two years, the IRS issued a $25,000 penalty treating the filing as non-compliant.
We prepared corrected submissions with proper attachments and submitted a penalty abatement request citing the technical nature of the error and the client's history of attempting to comply.
Corrected filings accepted. $25,000 penalty reduced to $0. Future filings brought into full compliance.
🇨🇳 Country: China
Entity:Single-Member LLC, Florida
Issue: Dormant LLC, No Filings
Penalty: $50,000
A Chinese national formed a Florida LLC for an import business that never launched. The LLC sat dormant for two years — but an $8,000 formation deposit counted as a reportable transaction, triggering the filing requirement.
The IRS assessed $25,000 for each dormant year. We filed two years of delinquent returns and prepared an abatement request explaining the dormancy and absence of any tax avoidance intent.
Both years abated in full. $50,000 in penalties removed. LLC properly closed following resolution.
🇧🇷 Country: Brazil
Entity:Single-Member LLC, New Mexico
Issue: Omitted by Tax Preparer
Penalty: $25,000
A Brazilian consultant used a U.S. LLC to receive payments from American clients. Her general tax preparer omitted Form 5472 entirely. She received a $25,000 CP notice and contacted us within 30 days — before the 90-day escalation window.
We filed the missing return immediately and submitted an abatement letter citing reasonable cause and her clean prior compliance history.
Penalty abated in full. Response submitted within 90-day window, preventing further accrual.
🇨🇦 Country: Canada
Entity:Multi-Member LLC, Delaware
Issue: Incorrect Ownership Reported
Penalty: $25,000
A Canadian investor held 60% of a U.S. multi-member LLC. The tax preparer underreported the foreign ownership percentage below the 25% threshold, triggering an IRS review and a $25,000 penalty notice alongside an information request.
Our team reconstructed ownership records, filed amended returns with correct disclosures, responded to the IRS information request, and submitted a penalty abatement request citing preparer error.
Penalty abated. IRS review closed without further action. Ownership records corrected going forward.
🇳🇬 Country: Nigeria
Entity:C-Corporation, Delaware, Delaware
Issue: Form 5472 Never Filed
Penalty: $25,000
A Nigerian tech founder raised a seed round that pushed total foreign ownership above the 25% threshold. His accountant overlooked the Form 5472 obligation triggered by the ownership percentage, resulting in a $25,000 IRS penalty.
We prepared the delinquent filing, documented the ownership structure correctly, and submitted an abatement request citing the complexity of the ownership threshold rules and proactive corrective action.
Penalty abated. Compliance structure established including annual ownership monitoring.