E-2 Visa LLC Tax Filing: Extra IRS Forms Foreign Owners Miss

Forming a U.S. LLC is a required step for most E-2 visa investors but LLC formation does not equal full tax compliance. Many foreign-owned E-2 businesses must file additional IRS forms beyond a basic tax return, and missing them can lead to steep penalties, IRS scrutiny, and E-2 visa renewal issues.

The extra U.S. tax forms E-2 visa LLC owners often miss, why they matter, and how to stay both IRS-compliant and visa-safe.

Why E-2 Visa LLC Tax Filing Is More Complex Than Expected

E-2 visa holders are considered foreign persons for U.S. tax purposes, even if they live and operate their business in the United States. Because of this, the IRS imposes special reporting rules on foreign-owned LLCs.

Common reasons E-2 LLCs trigger extra IRS forms include:

• 25% or more foreign ownership
• Single-member LLCs owned by non-U.S. persons
• Cross-border money transfers
• Foreign bank accounts
• Transactions between the owner and the company

Failing to file the correct forms can result in penalties starting at $10,000 per form, even if the business had little or no income.

Form 5472: The Most Commonly Missed IRS Filing for E-2 LLCs

Form 5472 is one of the most critical IRS forms for foreign-owned E-2 visa LLCs.

You must file Form 5472 if:

• Your LLC is at least 25% foreign-owned
• The LLC is a single-member LLC owned by a non-U.S. person
• There were any “reportable transactions” between the owner and the LLC

Reportable transactions include:

• Owner capital contributions
• Owner loans to the business
• Management fees
• Rent payments
• Reimbursements
• Transfers between personal and business accounts

Penalty for missing Form 5472: $25,000 per year under current IRS rules, even if the business made no money.

Other IRS Forms Commonly Required for E-2 Visa LLC Tax Filing

1. Form 1120 or 1120-S (Often Filed Incorrectly)

Foreign-owned single-member LLCs may be required to file Form 1120 as a pro-forma return, even though the LLC is disregarded for income tax purposes.

Filing the wrong corporate form is a common mistake made by non-specialized CPAs.

2. Form 1065 (Multi-Member LLCs)

If your E-2 business has multiple owners, including foreign partners, the LLC usually must file Form 1065 (Partnership Return) and issue Schedule K-1s.

Incorrect ownership reporting can cause problems during E-2 visa renewals.

3. FBAR (FinCEN Form 114)

You may be required to file an FBAR if you:

• Have foreign bank accounts, or
• Maintain business funds overseas

and the total value exceeds $10,000 at any point during the year.

FBAR penalties can be severe and are not handled by the IRS audit division, making them especially dangerous to ignore.

4. FATCA (Form 8938)

Some E-2 investors must also file Form 8938 if they hold significant foreign financial assets.

This form often overlaps with FBAR but has different thresholds and reporting rules.

Why Missing These Forms Can Impact Your E-2 Visa Renewal

E-2 visa renewals require:

• Clean financial records
• Proper tax filings
• Evidence of lawful business operations

Missing or incorrect IRS filings can:

• Raise red flags during renewal
• Delay visa processing
• Trigger Requests for Evidence (RFEs)
• Force expensive tax cleanups under time pressure

Immigration attorneys often refer E-2 investors to specialized CPAs after problems arise—but proactive compliance is far safer and more cost-effective.

Get an E-2 Visa LLC Tax Compliance Review

If you own an E-2 visa LLC and are unsure whether you’ve filed all required IRS forms, now is the time to review your compliance.

E-2 Visa CPA specializes in:

• Foreign-owned LLC tax filing
• Form 5472 compliance
• E-2 visa-safe bookkeeping and tax planning
• IRS penalty prevention and cleanup