What Your LLC Formation Agent Didn't Tell You
TL;DR
Formation takes a week. The obligations it creates run every year afterwards — a federal information return carrying a $25,000 penalty, a state annual report, a registered agent that must be continuously maintained, and a bank that will probably reject the address you were given. None of that is usually in the package you bought.
The gap between what you bought and what you now owe
A formation package typically delivers: the state filing, an EIN, a registered agent for a year, an operating agreement template, and an address.
What it usually does not deliver, or mention:
| Obligation | Frequency | If missed |
|---|---|---|
| Form 5472 + pro forma 1120 | Annual, where reportable transactions exist | $25,000 per year, per related party, plus $25,000 per 30 days after notice |
| State annual report | Annual | Administrative dissolution 60 days after the due date |
| Registered agent | Continuous | Forfeiture — on the more expensive path |
| Form 1040-NR | Annual, if engaged in a US trade or business | Failure-to-file exposure; §874(a) denies deductions |
| Sales tax registration | Once nexus exists | State-level liability for uncollected tax |
| Beneficial ownership | — | No longer applies to US-formed entities |
That last row matters in the other direction: some vendors are still charging for BOI filing. FinCEN’s final rule, effective 14 August 2026, exempts domestic reporting companies. If a US-formed LLC is being invoiced for it, ask which rule applies. See why BOI reporting no longer applies.
The five surprises, in the order they usually arrive
1. The bank rejects you
Your formation agent gave you one address and used it everywhere. It satisfies state law — that is exactly what a registered office is for. It fails bank onboarding, because Mercury, Relay and Wise all exclude registered agent, virtual and mail-forwarding addresses for the address that matters.
This is the most common fixable rejection, and the default configuration causes it. See your US LLC has four different addresses and non-resident LLC banking compared.
2. “No revenue” turns out not to mean “no filing”
The formation year is the year you are least likely to escape Form 5472, not the most. Part V covers amounts paid in connection with the formation of the entity, including contributions to it. If you paid the state fee and the registered agent from your own card — and you did — money moved between you and the LLC. See “no activity” almost never means “no Form 5472”.
3. The state deadline is not the date you formed
Wyoming’s annual report is due on the first day of your anniversary month, not on the anniversary date. There is no late fee — but administrative dissolution lands 60 days after the due date. Reinstatement is $100 and available for two years. See what happens after a late Wyoming annual report.
And a failure mode entirely outside your control: if your commercial registered agent fails to renew its own registration, every entity it represents is left without an agent on 1 January — which is the more expensive forfeiture path.
4. Nobody told you whether you owe US tax
Formation agents do not answer this, and cannot. Whether you owe US federal income tax turns on whether you are engaged in a US trade or business — an unsettled question for FBA sellers and a fact-specific one for everyone else. The “0% tax” framing that sold you the LLC is a marketing claim, not a filing position. See does Amazon FBA make a non-resident taxable in the US.
5. Your own country has a view, and it may differ
The US disregards your single-member LLC. Your country of residence may classify it as a company. Where the two disagree, the mismatch can produce income taxed twice with no credit available. See how your home country sees your US LLC.
What “just let it lapse” actually does
The instinct, once the compliance tail becomes visible, is to walk away. Two reasons that is worse than it looks.
The federal year does not close. Under IRC §6501(c)(8), the limitations period generally does not begin to run until the information return is filed. An unfiled Form 5472 year stays open indefinitely. Dissolving the LLC does not run out a clock that never started.
Dissolution is a filing, not an absence of filings. A properly closed entity is closed on the record, with a final-year federal filing. An abandoned one is administratively dissolved by the state and remains federally open.
If the LLC genuinely serves no purpose, closing it properly is cheaper than the alternative and takes one cycle.
What is actually reasonable to pay
For context, because “is this normal?” is one of the most common questions in this population:
- Federal information return (Form 5472 + pro forma 1120, dormant entity): a flat fee, typically low-to-mid hundreds. Providers who publish prices sit roughly between $200 and $550 for a signed filing. Quotes above $1,000 for a dormant entity are worth questioning.
- State annual report: the state fee is $60 in Wyoming; anything charged on top is a service fee.
- Registered agent: an annual subscription, commonly $50–$200.
The published-price test is a useful filter on its own. A provider unwilling to quote a fixed price for a fixed-scope filing is telling you something.
Year-one checklist, in order
- Find your state anniversary month — that is your annual report deadline, on the first of the month.
- Confirm your registered agent is current on the state’s business search. Do this annually.
- Establish who paid formation costs and from which account. This determines your first Form 5472 answer.
- Fix the address configuration before applying to any bank, not after a rejection.
- Get the IRS-returned EIN document — CP 575 or a 147C letter. Not the SS-4 you submitted.
- Decide your US trade-or-business position deliberately and record the reasoning.
- Ask your local adviser how your country classifies the LLC.
- Put an address the IRS can reach you at on every federal filing — one you monitor in days, not months.
Frequently Asked Questions
Q: My formation agent said no tax filings were needed. Where does that leave me? A: Exposed, and with a weak reasonable cause argument. Reliance on a non-adviser carries little weight; reliance on a tax professional given the full facts carries considerably more. Document who told you what and when.
Q: I have several unfiled years. Where do I start? A: File the delinquent years — filing stops the continuation penalty accruing — and then assess reasonable cause. Note that First Time Abate does not apply to these penalties. See Form 5472 penalty abatement.
Q: Should I have formed the LLC at all? A: For many non-residents selling to non-US customers, the LLC adds filings and cost without reducing tax. That is worth establishing honestly — before renewing for another year.
Q: Can I change registered agent or state? A: Changing agent is a routine $5 state filing in Wyoming. Changing state is a bigger operation and rarely solves a problem the first state created.
Next Steps
Most owners arriving here have the same three unknowns: which years were required, whether anything was filed, and whether the LLC is still in good standing with the state. All three are answerable from documents you already hold, and answering them is what determines whether this is a small tidy-up or something with a deadline attached.
This article is general information, not tax or legal advice. Obligations depend on your specific facts and formation state.
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