The real cost of the 1120 + 5472 (and why Fiverr is a trap)

A client we'll call CUERVO wrote to us in March with a screenshot: he'd paid 35 dollars on Fiverr for "my LLC's 5472 filing." The seller sent him a PDF, told him "it's filed now," and vanished. What CUERVO didn't know is that the PDF had never been sent anywhere, that half the package was missing, and that the clock on a 25,000-dollar penalty had been running in his name for weeks.

This post isn't about scaring you: it's about understanding what you're actually buying when a non-resident LLC files its annual return, what it really costs to do it right, and why the 35-dollar gig almost never is one. If you understand the real cost, you stop comparing apples to oranges — and you stop being the next CUERVO.

Disclaimer: this is operational content based on what we see with real clients, not legal or tax advice. At Devil Club we are not attorneys or tax advisors. For your specific case, check with a qualified professional in your jurisdiction.

What a non-resident LLC actually files

A single-member LLC with a foreign owner is treated, in the eyes of the IRS, as a disregarded entity: the business pays no federal tax of its own, but it does have to report. That same reason is what, for most non-residents, means there are no quarterly payments to prepay to the IRS: with no income tax, there's nothing to prepay. Every year it files a package with two pieces that go together:

• Pro-forma Form 1120: not a corporation's full return. It's a "shell" of the 1120 used only as a cover sheet to attach the form that actually matters.
• Form 5472: the report of transactions between the LLC and its foreign owner — contributions, withdrawals, loans, any movement of money between you and your company.

The two are stapled together and mailed as one. One without the other is worthless: a lone 5472 with no pro-forma 1120 cover is, as far as the IRS is concerned, a wrongly filed form. And that's where the trouble with cheap gigs begins.

Why the Fiverr gig is a trap

The 30-or-40-dollar hook works because it sounds exactly like what you need: "I'll file your 5472." But the price only adds up by cutting precisely what makes the filing valid. This is what we saw in CUERVO's case, and it repeats:

• They fill it in, they don't file it. Many gigs hand you the completed PDF and call it "filing." Filling in a form is not sending it to the IRS — and the client finds out months later, when the letter arrives.
• The pro-forma 1120 is missing. They charge for "the 5472" literally and skip the required cover. The package arrives incomplete and counts as not filed.
• Nobody signs or answers. A serious preparer has a PTIN — the number the IRS assigns to anyone who prepares returns for money — and leaves a trail. The anonymous gig signs nothing: if there's an error, there's no one to go back to.
• Zero review of your case. They don't ask about contributions, withdrawals, or foreign accounts. They copy data onto a form without understanding your year. The cheap part is the template; your real situation isn't even looked at.

The result is a PDF that looks like a filing and isn't one. You paid 35 dollars for the feeling of being up to date, which is the exact opposite of being it.

The cheap part isn't the filing: it's the template. Your specific case — your withdrawals, your accounts, your year — still goes unlooked-at, and that's exactly what the IRS does look at.

The real cost, broken down

When you compare prices, compare what each one includes. A cheap filing and one done properly aren't the same product at a different price — they're two different things:

The price of a serious filing for a simple SMLLC isn't high three figures, but it isn't 35 dollars either: it reflects that someone reads your case, builds the complete package, and sends it with proof. To place it within the total annual cost of keeping the LLC alive, we break it down in the real cost of an LLC.

The penalty nobody teaches you

Here's the number that turns a 35-dollar saving into the worst deal of the year. The penalty for not filing Form 5472, or filing it incomplete, starts at 25,000 dollars. It's not a charge proportional to what you earned — an LLC with not a single dollar of income can eat the whole penalty just for the form.

And the cruel detail: the IRS doesn't distinguish between "I didn't file it" and "I filed it badly with a Fiverr gig." An incomplete package counts as not filed. That's why a cheap filing that skips the pro-forma 1120 doesn't save you money: it leaves you exposed exactly as if you'd done nothing at all. The specific errors that trigger these letters we break down in the 4 Form 5472 mistakes.

What a filing done right includes

So you can see what you're buying when the price climbs above 35 dollars, this is what changes:

• Your year is looked at, not a template: contributions you put in, withdrawals you took out, loans between you and the company — all on a cash basis, what actually moved.
• The package goes complete: pro-forma 1120 cover + attached 5472, stapled the way the IRS expects them.
• The FBAR is assessed: if your accounts outside the U.S. added up to more than 10,000 dollars at any point in the year, you get flagged — we cover it in the FBAR for a non-resident LLC.
• A person reviews before sending: nothing goes to the IRS automatically; every submission is approved by someone with a name.

How it played out with CUERVO

With CUERVO we acted on the year the gig had left half-done: we reconstructed his movements for the period, built the pro-forma 1120 with the complete 5472, and filed it properly with proof of submission. The Fiverr PDF, quite simply, counted for nothing — it had never reached the IRS.

What CUERVO saved wasn't 35 dollars: it was the exposure to a 25,000-dollar penalty. That's the math almost nobody does when comparing prices. The cheap filing wasn't cheap; it was a latent bill waiting for a letter. The pattern is always the same — you pay little today for the feeling of being up to date, and dearly tomorrow for not being it.

Before you pay for a filing, check this

It doesn't matter who does it: before you hand over the money, make sure the filing includes what actually protects you.

• Does it include the pro-forma 1120 cover? Without it, the 5472 goes loose and counts as wrongly filed.
• Do they send it to the IRS or just hand you the PDF? Filling in is not filing — ask for proof of submission.
• Is there a preparer with a PTIN behind it? Someone with a name and a trail, not an anonymous profile that disappears.
• Do they review your real year? They have to ask you about contributions, withdrawals, and accounts outside the U.S.
• Do they assess the FBAR? If you have foreign accounts, it should be on the table, not out of scope.

The 1120 + 5472 isn't hard to understand, but it is easy to do wrong — and the IRS charges for mistakes at 25,000 dollars a piece. The right question isn't "which is cheapest?" but "what happens if this is filed wrong?" When the answer is a five-figure penalty, 35 dollars stops looking like a bargain.