What records should a foreign-owned US LLC maintain?

Keep entity and ownership records together

Start with formation documents, the EIN confirmation, ownership details, and any tax-classification elections. Keep a record of changes during the year. An LLC is a legal structure; the federal tax treatment depends on its classification and circumstances.

Store prior returns, annual reports, correspondence, and proof of submission in the same organized record set. A bank statement does not explain the entity’s ownership or tax classification.

Track owner and related-party activity

Maintain records of contributions, distributions, loans, repayments, and costs paid by an owner on the entity’s behalf. Describe the purpose of each transaction and retain supporting documents. A company can have relevant reporting activity even when sales are small or absent.

Form 5472 has specific reporting rules for entities within its scope. For applicable foreign-owned disregarded entities, it is filed with a pro forma Form 1120. The filing assessment should consider the actual transactions and applicable instructions.

Separate different obligations

Federal tax and information reporting, state entity reports, and state taxes are distinct matters. A formation provider’s annual reminder may cover only one of them. Ask for a list of obligations that applies to your own entity and activities.

• Formation and ownership records
• Bank, card, and payment processor statements
• Owner and related-party transaction schedules
• Contracts, invoices, and receipts
• Prior returns and filing acknowledgements

Make the review easier

Provide the records for the complete tax year and explain the currencies used. Identify personal costs, missing transactions, and changes in operations. Do not assume that no tax payable means no filing is required. A written scope review should identify the returns, periods, and related parties included in your engagement.