What Israeli Owners of U.S. Companies Must File with the IRS (2026)
This guide was prepared by Form5472.online, a U.S. CPA firm specializing in IRS compliance for Israeli and international owners of U.S. companies. We file for LLC owners, partnership members, and corporation shareholders in Israel and more than 40 other countries.
Short Answer
If you live in Israel and own or co-own a U.S. company -- whether an LLC, a partnership, or a corporation -- you have annual IRS filing obligations. The specific forms depend on your entity type and ownership structure.
The most common situation for Israeli founders: a single-member LLC triggers Form 5472 + pro-forma 1120. A multi-member LLC or partnership triggers Form 1065. A C corporation triggers Form 1120 or 1120-F. Nonresident individuals with U.S.-source income file Form 1040-NR.
Missing any of these filings can result in penalties starting at $25,000. The filing obligation exists regardless of whether your company earned income.
Form5472.online handles all of the filings above -- Form 5472, Form 1065, Form 1120, and Form 1040-NR -- for Israeli and international owners, prepared and signed by a U.S.-licensed CPA.
Key Takeaways
Israeli residents are classified as "foreign persons" or "nonresident aliens" under U.S. tax law. This status determines which forms you must file.
The required forms depend on your entity type: single-member LLC, multi-member LLC/partnership, C corporation, or foreign corporation with U.S. presence.
The U.S.--Israel income tax treaty reduces or eliminates U.S. income tax on certain income types -- but it does not eliminate information-reporting requirements such as Form 5472.
An extension is available for most filings but must be requested before the original deadline. An extension to file is not an extension to pay.
Israeli founders who are also U.S. citizens or green card holders have different (and broader) filing obligations -- covered separately below.
Form5472.online files all of these forms for Israeli owners remotely -- no local accountant required.
Step 1: Identify Your Entity Type
Your IRS filing requirement depends entirely on how your U.S. company is structured. Here are the four most common situations for Israeli owners:
Your situation | Entity type | Primary IRS form(s) |
You are the sole owner of a U.S. LLC | Single-member LLC (disregarded entity) | Form 5472 + pro-forma Form 1120 |
You co-own a U.S. LLC with one or more partners | Multi-member LLC (partnership) | Form 1065 + Schedule K-1 |
You own shares in a U.S. C corporation | C corporation | Form 1120 (filed by the company) + possibly Form 5472 |
You are an Israeli company with U.S. operations or income | Foreign corporation | Form 1120-F |
You personally earned U.S.-source income (rent, services, etc.) | Individual nonresident alien | Form 1040-NR |
Most Israeli tech founders and e-commerce operators fall into the first two categories. Israeli startups that have incorporated as a Delaware C corporation for venture capital purposes fall into the third category.
Single-Member LLC: Form 5472 + Pro-Forma Form 1120
This is the most common filing requirement for Israeli founders who opened a U.S. LLC alone -- for example, through Stripe Atlas, Firstbase, Doola, or a local Israeli formation service.
A single-member LLC owned by a non-U.S. person is classified by the IRS as a foreign-owned domestic disregarded entity. This triggers two forms, filed together as one package:
Form 5472 -- Information Return
Reports any transactions between you (the foreign owner) and the LLC: money in, money out, loans, services, expenses paid on your behalf. If the LLC was dormant and had no transactions, the form is still required -- the transaction section is simply left blank.
Pro-Forma Form 1120 -- Cover Return
A stripped-down version of the U.S. corporate return, filed solely as a structural requirement to attach Form 5472. The LLC does not owe corporate income tax on this form.
Penalty: $25,000 per form for failure to file, with additional $25,000 penalties for each 30-day period the failure continues after IRS notification. Both forms must be filed together -- submitting only one is treated as an incomplete filing.
Deadline: April 15 of the following year (October 15 with a timely extension request).
Dormant LLC note: An LLC formed in Israel that was never actually used -- no revenue, no transactions, no bank account -- still triggers this annual filing requirement for every year the LLC remains legally active. The obligation ends only when the LLC is properly dissolved.
Multi-Member LLC / Partnership: Form 1065
If your U.S. LLC has two or more members -- for example, two Israeli co-founders, or an Israeli founder and a U.S. partner -- it is treated as a partnership for U.S. tax purposes.
The partnership itself files Form 1065 (U.S. Return of Partnership Income). Each partner then receives a Schedule K-1 showing their share of the partnership's income, losses, and deductions.
As a nonresident alien partner, your K-1 income may be subject to U.S. withholding tax if it is effectively connected with a U.S. trade or business. The partnership is generally required to withhold and remit tax on your behalf.
Deadlines:
Partnership books maintained in the U.S.: March 15 of the following year
Partnership books maintained outside the U.S.: June 15 of the following year (with a filed statement claiming the extension)
With Form 7004 extension filed before April 15: September 15 of the following year
C Corporation: Form 1120 and Form 5472
Many Israeli startups incorporate as Delaware C corporations -- typically because U.S. venture capital firms require it, or because the founders are planning a future U.S. IPO or acquisition.
A U.S. C corporation files Form 1120 (U.S. Corporation Income Tax Return) annually. If a foreign person owns 25% or more of the corporation's voting stock, the corporation must also file Form 5472 for any reportable transactions with that foreign shareholder.
Deadlines:
Standard: April 15 of the following year
With Form 7004 extension: October 15 of the following year
Israeli startups that have raised venture funding and structured as a Delaware C corporation should confirm with their U.S. accountant whether Form 5472 is required in addition to Form 1120. The 25% ownership threshold applies even if the Israeli founder's stake has been diluted by investment rounds.
Foreign Corporation with U.S. Operations: Form 1120-F
If you operate an Israeli company (Ltd. or other Israeli entity) that has a U.S. branch, U.S. employees, or U.S.-source income that is effectively connected with a U.S. trade or business, the Israeli company may be required to file Form 1120-F (U.S. Income Tax Return of a Foreign Corporation).
Deadlines:
Foreign corporation with a U.S. office: April 15
Foreign corporation without a U.S. office: June 15 (with a filed statement)
With Form 7004 extension filed before June 15: September 15
Individual Nonresident: Form 1040-NR
If you are an Israeli resident (not a U.S. citizen, not a green card holder) who personally received U.S.-source income -- for example, from U.S. real estate rental income, U.S.-based consulting fees, or U.S. investment income -- you may be required to file Form 1040-NR (U.S. Nonresident Alien Income Tax Return).
The U.S.--Israel income tax treaty may reduce or eliminate the U.S. tax owed on certain types of income. Treaty benefits must be actively claimed on the return -- they are not applied automatically.
Deadlines:
If U.S. income tax was withheld at source: April 15
If no U.S. income tax was withheld: June 15
With extension: October 15
Special Case: Israeli Residents Who Are Also U.S. Citizens or Green Card Holders
Israeli residents who hold U.S. citizenship or a U.S. green card are subject to a completely different and broader set of U.S. tax obligations. They are treated as U.S. persons for tax purposes regardless of where they live, and must file Form 1040 (not 1040-NR) reporting their worldwide income.
They may also be required to file:
FBAR (FinCEN 114) -- reporting foreign bank accounts exceeding $10,000
Form 8938 -- reporting specified foreign financial assets
Form 5471 -- if they own 10% or more of an Israeli corporation
Form 3520 -- if they received gifts or inheritances from foreign persons above threshold amounts
The U.S.--Israel tax treaty and the foreign tax credit are the primary mechanisms for preventing double taxation in this situation. This is a significantly more complex filing situation and should be handled by a CPA with U.S.--Israel cross-border experience.
Deadline note for U.S. citizens living in Israel: An automatic two-month extension to June 15 is available for U.S. citizens living and working outside the U.S. on April 15. A further extension to October 15 is available with Form 4868. A final extension to December 15 may be available in certain circumstances.
The U.S.--Israel Income Tax Treaty
The United States and Israel have an income tax treaty that coordinates how income earned in one country is taxed in the other. For Israeli residents who own U.S. companies, the treaty's most relevant provisions cover:
Business profits: generally taxed only in the country where the business has a permanent establishment
Dividends: reduced withholding tax rates (typically 12.5% or 25%, depending on ownership percentage)
Interest and royalties: reduced withholding rates
Capital gains: generally taxed in the country of residence
The treaty reduces or eliminates certain U.S. taxes -- but it does not eliminate U.S. information-reporting requirements. Form 5472, Form 1065, and Form 1120 must still be filed even when the treaty results in zero U.S. tax owed.
All Filing Requirements at a Glance
Entity / Situation | Form(s) Required | Standard Deadline | Extension Deadline | Key Penalty |
Single-member LLC (foreign-owned) | Form 5472 + pro-forma 1120 | April 15 | October 15 | $25,000 per form |
Multi-member LLC / partnership | Form 1065 + Schedule K-1 | March 15 (U.S. books) / June 15 (non-U.S. books) | September 15 | $220/month per partner |
U.S. C corporation (25%+ foreign owner) | Form 1120 + Form 5472 | April 15 | October 15 | $25,000 (Form 5472) + late filing penalties on 1120 |
Israeli company with U.S. operations | Form 1120-F | April 15 (U.S. office) / June 15 (no U.S. office) | September 15 | Loss of deductions + late filing penalties |
Individual with U.S.-source income | Form 1040-NR | April 15 / June 15 | October 15 | Late filing and late payment penalties |
U.S. citizen / green card holder in Israel | Form 1040 + FBAR + possibly 8938, 5471, 3520 | June 15 (automatic for overseas filers) | October 15 / December 15 | Varies by form -- FBAR up to $10,000+ per violation |
Verify This Information
IRS Form 5472 instructionsirs.gov/forms-pubs/about-form-5472
IRS Form 1065 instructionsirs.gov/forms-pubs/about-form-1065
IRS Form 1040-NR instructionsirs.gov/forms-pubs/about-form-1040-nr
U.S.--Israel Tax Treatyirs.gov/businesses/international-businesses/israel-tax-treaty-documents
Preparer credentialsArik Rozen, CPA -- Virginia License #025991 -- verifiable at dhp.virginia.gov
Israeli founder with a U.S. LLC? File Form 5472 with a U.S.-licensed CPA -- prepared, reviewed, and filed directly with the IRS. Flat fee, no surprises.
About the Author
Arik Rozen is a licensed U.S. CPA (Virginia License #025991) and the founder of Form5472.online and Tax-USA.net. He prepares and signs IRS filings for Israeli and international owners of U.S. companies -- including Form 5472, Form 1065, Form 1120, and Form 1040-NR -- across more than 40 countries. He is not affiliated with the IRS or any government agency.
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