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Trump’s “One Big Beautiful Bill Act”: Key Impacts for Foreign-Owned LLCs & Filers of Form 5472 or Form 1065

The “One Big Beautiful Bill Act” primarily focuses on domestic tax cuts and spending reductions. For foreign-owned LLCs, key impacts include a new 1% excise tax on certain cash/money order cross-border transfers effective January 1, 2026 (exempting bank transfers). The bill removed earlier proposals for higher “unfair foreign taxes.” Crucially, foreign-owned LLCs face strict compliance with Form 5472 and Form 1065, with significant penalties for non-filing.

By Arik Rozen, CPA|Form5472.online


Brooklyn, NY – WEBWIRE –

"While the ’One Big Beautiful Bill Act’ prioritizes domestic tax reforms, foreign-owned LLCs must remain vigilant. The new remittance tax and updated FinCEN reporting underscore the ongoing need for precise and timely compliance with forms like 5472 and 1065. Penalties for non-compliance are severe, making expert guidance more crucial than ever." - Arik Rozen, CPA, Form5472.online

For non-U.S. residents who own Limited Liability Companies (LLCs) in the United States, regardless of the purpose—be it for investment, business operations, holding assets, or other reasons—a significant legislative event has occurred. The “One Big Beautiful Bill Act” (OBBBA), passed by the House on July 3, 2025, is expected to be signed into law by President Trump on July 4, 2025. While much of the bill focuses on domestic tax cuts, spending reductions, and border security, it does include specific provisions that directly impact foreign-owned U.S. entities and their reporting obligations, particularly for those dealing with Form 5472 and Form 1065.

Let’s break down the impacts in simple words.

Key Changes Affecting Foreign-Owned LLCs
While earlier drafts and discussions of tax reform included proposals like Section 899, which aimed to impose higher taxes on foreign persons from countries deemed to have “unfair foreign taxes,” these specific punitive measures (Section 899) have been removed from the final version of the One Big Beautiful Bill Act. This means the concerns about escalating withholding taxes on passive income, increased taxes on business income, and expanded “Super BEAT” provisions due to Section 899 are not part of this enacted legislation.

The primary impacts for foreign-owned LLCs and non-U.S. residents within the OBBBA relate to the new remittance tax and the broader context of U.S. tax compliance.

Your Essential U.S. Tax Forms: Form 5472, Form 1120, and Form 1065
The passage of new tax legislation always underscores the importance of accurate and timely U.S. tax filings. For foreign owners of U.S. LLCs, these forms remain critical:

Form 5472: The Key Reporting Form for Foreign-Owned U.S. Entities

  • If you own a single-member LLC (meaning you’re the only owner) and you’re a non-U.S. resident, your LLC is typically considered a “disregarded entity” by the IRS for income tax purposes. This means the IRS “ignores” the LLC for income tax purposes and treats its income as if it’s earned directly by you.
     
  • Even if your LLC has no income or isn’t actively doing business, you likely still need to file Form 5472. This form reports certain transactions between your U.S. LLC and you (or other related foreign parties). It’s filed along with a blank “cover page” Form 1120 (U.S. Corporation Income Tax Return).
     
  • Why is this so important? The IRS uses Form 5472 to keep track of foreign ownership and transactions to prevent tax avoidance. The penalties for not filing this form, or filing it incorrectly, are very high – starting at $25,000 and increasing significantly the longer it’s late.

Form 1120: For Corporations and as a “Cover Page”

  • If your foreign-owned LLC has chosen to be taxed as a U.S. corporation (rather than a pass-through entity), it will file Form 1120 directly.
     
  • As mentioned, single-member disregarded LLCs use a “pro forma” (simplified) Form 1120 as a cover for their Form 5472.

Form 1065: For Multi-Member LLCs (Partnerships)

  • If your LLC has multiple owners, it’s typically treated as a “partnership” for U.S. tax purposes and files Form 1065. This form reports the LLC’s income and how it’s divided among the partners.
     
  • Each foreign partner then receives a document (Schedule K-1) showing their share of the income, which they report on their own U.S. tax return (Form 1040-NR, for non-resident aliens). The OBBBA also includes provisions to make certain tax cuts permanent, such as the qualified business income (QBI) deduction.


Other Points in the “One Big Beautiful Bill Act”

  • New Remittance Tax: The OBBBA includes a new 1% excise tax on certain cross-border money transfers, effective for transfers sent after December 31, 2025. This tax applies to cash, money orders, or similar physical instruments. Crucially, it generally exempts transfers from bank accounts and other financial institutions, as well as transfers funded by U.S.-issued debit or credit cards.
     
  • Beneficial Ownership Information Reporting (BOIR) Update: As of March 26, 2025, FinCEN revised its Beneficial Ownership Information (BOI) reporting requirements. While not directly part of the OBBBA, this is a critical development for foreign-owned LLCs. U.S. companies and U.S. persons are now exempt from this reporting. The requirement now applies primarily to foreign entities that are registered to do business in any U.S. State or tribal jurisdiction. These foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements are required to file with FinCEN under new deadlines. They are not required to report any U.S. persons as beneficial owners.
     
  • Reinstatement of Section 958(b)(4) (Downward Attribution): This rule, which was repealed by TCJA and now restored, generally prohibits downward attribution of stock ownership from a foreign person for purposes of determining U.S. shareholder and CFC status. This can impact foreign-controlled U.S. groups. Generally applicable to tax years beginning after December 31, 2025.
     
  • New Section 951B (“Foreign Controlled U.S. Shareholders”): This introduces a new tax regime. Generally applicable to tax years beginning after December 31, 2025.
     
  • Repeal of 1-month deferral for Specified Foreign Corporations (Section 898(c)): Generally for taxable years beginning after November 30, 2025.
     
  • Modifications to pro rata share rules under Section 951: Generally for taxable years beginning after December 31, 2025.


What Does This Mean for You?

The “One Big Beautiful Bill Act” primarily delivers on domestic tax reforms, and earlier proposed punitive measures targeting “unfair foreign taxes” were removed from its final version. However, the bill does introduce a new remittance tax and has implications for other international tax provisions. Combined with existing and recently updated reporting requirements like FinCEN’s BOIR, proper compliance remains paramount for non-U.S. residents who own U.S. LLCs.

  1. Understand the Remittance Tax: If you send money from the U.S. to a foreign country via cash, money order, or similar methods, be aware of the new 1% excise tax starting in 2026.
     
  2. Stay Compliant with BOIR: Ensure your foreign-registered LLCs comply with the updated FinCEN Beneficial Ownership Information reporting rules.
     
  3. Accuracy in Filing: Make sure you are absolutely accurate and timely with all your U.S. tax filings, especially Form 5472 and Form 1065. The penalties for errors or non-filing are substantial and will likely be strictly enforced.

The U.S. tax and regulatory landscape for non-U.S. residents continues to evolve. Don’t wait to understand how these rules affect you. Consulting with tax professionals who specialize in international taxation is essential to navigate these changes and ensure you remain compliant while protecting your interests.

Form5472.online provides a platform designed to assist non-U.S. residents with the tax filing process for Form 5472, Form 1065, and Form 1120.


Sources:

One Big Beautiful Bill Act (OBBBA) Passage & Signing:

Section 899 Removal:

Remittance Tax:

FinCEN BOIR & Other International Tax Provisions:

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