Form 5472 penalties: what triggers them and how much they are

This page lists the penalties as the IRS instructions, the tax code (section 6038A(d)) and the regulation (26 CFR 1.6038A-4) state them. It applies to any reporting corporation, including a foreign-owned single-member LLC that files Form 5472 with a pro forma Form 1120. If you already missed a filing, read what to do if Form 5472 is late or missed for the steps.

The penalty table

The amount is a fixed figure in the statute. The regulation also says the information required by section 6038A must be furnished even though it may not affect the amount of any tax due under the Code LII · checked Oct 27, 2026.

What counts as a failure to file

• Late. "When due" means by the due date of the return Form 5472 is attached to, including extensions. For a foreign-owned single-member LLC, that is the pro forma Form 1120. See due dates and Form 7004.
• Not in the manner prescribed. For a foreign-owned U.S. DE, the instructions prescribe a specific manner: a pro forma Form 1120 with Form 5472 attached, sent by fax or to a dedicated mailing address, and you cannot file Form 5472 electronically IRS · checked Oct 27, 2026. The details are in how to send it.
• Substantially incomplete. The instructions say: "Filing a substantially incomplete Form 5472 constitutes a failure to file Form 5472 IRS · checked Oct 27, 2026." The regulation says the same.
• Records. The instructions say the penalty also applies for failure to maintain records as required by Regulations section 1.6038A-3 IRS · checked Oct 27, 2026. The regulation says a records failure is judged on the corporation's overall compliance, not item by item; missing a single item or a small number of items may not be a failure unless they are essential to determining its transactions with foreign related parties (26 CFR 1.6038A-4(c)).

How the continuing penalty adds up

The second layer starts only after the IRS mails a notice of the failure. Under the statute and the regulation:

1. The clock starts when the notice is mailed. The statute counts from the day the IRS mails notice of the failure to the reporting corporation.
2. After the waiting period ends, each period counts in full. The regulation says: "Any uncompleted fraction of a 30-day period shall count as a 30-day period LII · checked Oct 27, 2026." So a failure that lasts only a few days into a new period is charged for that whole period.
3. It stops when you fix the failure. The regulation says the penalty will cease to accrue LII · checked Oct 27, 2026 when the reporting corporation files Form 5472, furnishes the information to substantially complete it, or, for a records failure, shows compliance with the record rules to the IRS's satisfaction.

How many penalties in one year

• Once per related party per year for the base penalty. The regulation says the base penalty is imposed only once for a taxable year with respect to each related party LII · checked Oct 27, 2026, whether the failure is not filing, not keeping records, or not meeting the rules for records kept outside the United States. Without a continuing failure after notice, that is the maximum for each related party for the year.
• A second, different failure can add more. If the IRS later finds a second failure for the same year (the regulation's example is a records failure found on audit after a filing penalty) and that failure continues after a new notice, an additional penalty can be imposed (26 CFR 1.6038A-4(d)(2)).
• Each missed year is separate. The statute sets the penalty at $25,000 for each taxable year LII · checked Oct 27, 2026 with respect to which the failure occurs.

Reasonable cause and penalty relief

The statute says that, for these penalties, the deadline to furnish the information or keep the records, and the start of the post-notice period, shall be treated as not earlier than the last day on which (as shown to the satisfaction of the Secretary) reasonable cause existed LII · checked Oct 27, 2026. The regulation sets out how to make that showing: the reporting corporation must state all the facts in a written statement containing a declaration that it is made under penalties of perjury LII · checked Oct 27, 2026, and the IRS decides case by case. The elements the regulation lists, and what to do with a penalty notice, are on the late or missed page.

The IRS page on administrative penalty relief lists the penalties that First Time Abate and the newer Automatic Exemption from Penalty cover. That list names failure-to-file penalties under sections 6651(a)(1), 6698(a)(1) and 6699(a)(1), failure-to-pay penalties and the failure-to-deposit penalty. It does not name the section 6038A penalty. Do not plan around those programs for a Form 5472 penalty without advice from a tax professional (a CPA, an enrolled agent, or a tax attorney).

If you are facing a penalty

1. Note when the IRS notice was mailed. The post-notice period in the table counts from the day the IRS mails the notice, so that date decides when the additional penalty can start.
2. Fix the failure. Under the regulation, filing the missing Form 5472 (or furnishing the information to substantially complete it) is what makes the additional penalty stop accruing. For a foreign-owned single-member LLC, that means a pro forma Form 1120 with Form 5472 attached, sent the way the filing guide describes.
3. Consider reasonable cause and the IRS contact options described on the late or missed page, and get help from a tax professional for anything the IRS texts do not cover.

Related pages

• Form 5472 filed late or missed: what to do
• Form 5472 for a foreign-owned single-member LLC: step by step
• Which transactions a foreign-owned LLC must report