Form 5472 for Canadian founders of US LLCs

Canadian residents who own a US single-member LLC owe Form 5472 to the IRS each year — the same April 15 deadline, $25,000 penalty, and fax-to-Ogden filing process as any other non-US owner. The Canada-US tax treaty is one of the most comprehensive bilateral treaties in existence, but it doesn't waive the Form 5472 information-return obligation.

What the Canada-US tax treaty does (and doesn't) cover

The Canada-US Tax Convention (1980, amended repeatedly) allocates taxing rights on income between Canada and the US, sets withholding rates on dividends / interest / royalties, and prevents double taxation on income. For a Canadian-resident owner of a US disregarded LLC:

• The treaty generally protects you from US income tax on business income earned through the LLC, provided the LLC doesn't have a "permanent establishment" in the US — no office, warehouse, or employees physically in the US.
• The treaty does not waive Form 5472. Form 5472 is an information return under IRC §6038A, not an income tax. Treaty provisions on elimination of double taxation don't apply.
• The treaty doesn't change the $25,000 penalty for failure to file Form 5472.

What you file with the US

• Form 5472 + pro forma Form 1120, faxed to IRS Ogden PIN Unit at +1-855-887-7737, by April 15 each year.
• FTIN on Form 5472: use your Canadian Social Insurance Number (SIN) or Business Number (BN) as the Foreign Tax Identification Number. The SIN is the standard choice for individual owners.
• No SSN required: Canadians with a SIN but no US SSN or ITIN can complete Form 5472. The LLC still needs a US EIN — apply via Form SS-4 faxed to the IRS international applicant line. See getting an EIN without an SSN.

Canadian tax reporting for the US LLC

On the Canadian side, the US LLC is generally treated as a foreign entity — CRA doesn't recognize the US concept of a "disregarded entity," so the LLC is typically treated as a foreign corporation for Canadian tax purposes. This creates some complexity:

• T1135 (Foreign Income Verification): Canadian residents with foreign property (including shares or membership interests in a foreign entity) with total cost exceeding CAD $100,000 must file Form T1135. Your US LLC membership interest likely triggers this. T1135 is due with your T1 return.
• T106 (Transactions with Related Non-Residents): if you have reportable non-arm's length transactions with the LLC exceeding CAD $1M in aggregate for the year, Form T106 may apply. Most solo founders don't reach this threshold.
• Income reporting: distributions from the LLC are included in your Canadian income. How they're taxed depends on CRA's characterization of the LLC — dividend, business income, or other. A Canadian CA experienced with US entities should handle this.

FBAR for Canadian-owned US LLCs

FBAR (FinCEN Form 114) applies to US persons with foreign financial accounts over $10,000. Your US LLC is a US person. If the LLC has a Canadian bank account (unusual), it likely needs to file an FBAR. If the LLC banks only in the US (Mercury, Wise USD, Relay), no FBAR.

Conservative summary for Canadian founders

• File Form 5472 + pro forma 1120 each April 15. Fax to the IRS.
• Canada-US treaty doesn't waive Form 5472. File it.
• Use your SIN as the FTIN on the form.
• Canadian side: file T1135 if foreign property exceeds CAD $100,000. Consult a CA on LLC income treatment in Canada.
• Snapfile files the US Form 5472 for $89. We handle the IRS side — bring a Canadian CA for the CRA side.