Prior-year catch-up — filing Form 5472 for years you missed

A reasonable number of our customers arrive at BorderFile not for the current year’s filing but for several previous ones. The pattern is familiar: founder forms a US LLC in 2022 or 2023, uses it to collect US client payments through a US bank account, has no US activity otherwise, and discovers at some point in 2026 that there is a federal information return called Form 5472 they should have been filing. For the three or four prior years. At $25,000 of base penalty exposure per missed year.

This is not a comfortable discovery. It is also not a terminal one. Here is what the catch-up actually looks like and what we see work.

First: do not go quiet

The single worst move after discovering a prior-year 5472 miss is to decide “maybe the IRS will never find out” and keep filing nothing. Three reasons:

1. The statute of limitations does not run while the 5472 is unfiled. The IRS can hold the full Form 1120 statute of limitations open for the entity indefinitely while a 5472 is outstanding. “Three years” is only a comfort if the 5472 was filed.
2. The $25,000 penalty is per form, per year. Each year that passes without filing is another $25,000 of exposure, not just the first one.
3. Voluntary disclosure is a documented path to a better outcome. The IRS’s own guidance (and decades of practice) treats voluntary catch-up filings differently from filings prompted by an IRS notice. First-time abatement is often available; reasonable-cause abatement is often available; neither of those lives on the table once the IRS has written to you.

The right move is a scoped, documented catch-up filing with a reasonable-cause memo attached. We’ll walk through it below.

What “catch up” actually means

In practice, catching up on 5472 means filing a complete, accurate 5472 + pro-forma 1120 (or real 1120, depending on classification) for each year you missed. The forms are the same forms you would have filed on time. The year labels on each filing are the years they correspond to. The IRS receives them in a stack.

For a founder who missed 2023, 2024, and 2025, this is three complete filings, each tied to that specific year’s facts. Each one needs:

• The correct legal name and EIN (unchanged across years)
• The correct year label (2023, 2024, 2025)
• The transaction totals that actually occurred in that year — not a lump-sum “best estimate across three years”
• The owner’s identity details as they were in that year (e.g. if your foreign TIN changed between years, that is reflected in each year’s filing)

Each year’s filing is self-contained. The IRS does not want a single catch-up document covering multiple years — they want separate filings for each year.

The documents you need to gather

For a typical three-year catch-up, we ask for:

1. The CP 575 or 147C letter. Still the source of truth for your LLC’s legal name and EIN.
2. Bank statements for every active account for every missed year. For a three-year catch-up, that is 36 months of statements per account. We regularly deal with Mercury’s archive, Wise’s PDF exports, and PDF-only historical statements from banks that no longer offer that account.
3. A list of related-party transactions, by year. For each year, the owner (and spouse, and any controlled entity) interactions with the LLC. Capital contributions, distributions, loans in either direction, owner-paid expenses, services.
4. Your personal credit-card statements for each missed year. This is where owner-paid expenses often live and where founders routinely miss transactions in a catch-up.
5. Evidence of the reasonable cause you plan to assert. We’ll come back to this.

The intake for a catch-up is longer than for a current-year filing. We quote them separately; a three-year catch-up is roughly three times the standard engagement in work volume.

Reasonable-cause abatement — what the IRS actually accepts

The IRS has a documented framework for assessing reasonable cause. In practice, three categories of facts tend to carry weight for a first-time catch-up filer:

1. Lack of awareness of the obligation, in a situation where awareness was not reasonably expected

The founder was not a US tax resident, had no US-tax adviser, formed the LLC through an online formation service that did not surface the 5472 obligation, and continued to assume no US filing was required because the LLC earned no US-source income. This is probably the most common catch-up fact pattern and the one the IRS historically accepts most often for a first-time filer.

2. Reliance on a competent professional’s advice that turned out to be wrong

The founder consulted a tax adviser (in their home country or in the US) who affirmatively told them no filing was required. If the adviser can be identified and the advice can be reconstructed from emails or notes, this is strong reasonable cause.

3. Illness, bereavement, or extraordinary personal circumstances during the year the filing was due

This is rarer and has a higher documentation burden. Medical records, bereavement documentation.

What usually does not work

• “I was busy.”
• “I did not know the exact rules.”
• Standing on your rights without acknowledging the obligation.
• Blaming the IRS for not being clearer.

The abatement letter needs to tell a specific, documented story about why the filings did not happen when they should have, and about what has changed so they will happen in future. It is a professional document; we have an in-house template and workflow for it.

First-time abatement (FTA)

Separate from reasonable-cause abatement, the IRS has a “first-time abatement” policy under which a first-year miss by an otherwise-compliant taxpayer can be removed on request, without needing a full reasonable-cause analysis.

FTA applies to the first year of a multi-year miss. For a three-year catch-up, FTA might abate year 1’s penalty on request, and reasonable-cause abatement might abate years 2 and 3 if the story is strong enough.

In our experience, well-documented first-time catch-up filings for the “I did not know about 5472” fact pattern see substantial penalty abatement — in some cases full abatement across all years. We do not promise an outcome; the IRS has discretion. But a documented filing with FTA + reasonable-cause arguments is dramatically better-positioned than a bare filing or a filing that arrives only after an IRS notice.

The sequence of events

Here is what a BorderFile catch-up engagement typically looks like end to end:

1. Scoping call (30–60 minutes). We confirm how many years are at stake, your entity classification, and your plan for the current year.
2. Engagement letter. A fixed-fee quote covering all missed years plus the current year, plus the reasonable-cause memo.
3. Document gathering (1–3 weeks on your side). You pull the historical statements and tax IDs; we chase the ones you cannot find.
4. Preparation (2–3 weeks on our side). Each year’s 5472 is prepared independently. Our reviewer runs the checklist against each one.
5. EA/CPA review. Different person. Different checklist. Signs each year’s filing.
6. Reasonable-cause memo. Drafted in parallel with the filings. Reviewed by the EA/CPA signing the filings.
7. E-signature. You sign each year’s filing and the reasonable-cause memo.
8. Fax transmission. All years transmitted together with the memo as a single filing event. Confirmation page stored per filing.
9. Monitor for IRS response. The IRS may acknowledge receipt without comment, may send a notice of acceptance with abatement granted, or may send a notice assessing penalties with abatement partially granted. We respond to each on your behalf under the engagement.

The total timeline from first call to transmitted catch-up is typically 6–10 weeks. Rush options exist for cases where an IRS notice is already in play.

When to file this year while the catch-up is still being prepared

A specific situation: it is March 2027, you just discovered a 5472 miss for the 2022–2025 years, and the 2026 year is also due by 15 April 2027.

Our recommendation: file the current-year 2026 return on time, as a standard current-year engagement. Open the catch-up engagement for 2022–2025 in parallel. Do not fold the current year into the catch-up — this is a different filing with different timing considerations, and the current-year filing is clean.

The reasonable-cause memo for the catch-up explicitly notes that the current year has been filed on time and that corrective procedures are now in place. This is a credibility signal to the IRS: the problem has been identified and corrected.

What happens if an IRS notice has already arrived

Different engagement. The expert desk, not the standard catch-up. We respond to the specific notice (what the IRS actually asked for, in the exact words of their letter), file the outstanding 5472s in parallel, and submit abatement arguments through the notice-response channel rather than the voluntary-disclosure channel.

This situation is more expensive to resolve than a voluntary catch-up, but it is still resolvable. The specific worst move after receiving an IRS 5472 notice is to ignore it. The second-worst is to respond without a credentialed professional in the loop.

In one sentence

A multi-year 5472 miss is a solvable problem, as long as you solve it voluntarily and with proper documentation — the IRS treats voluntary catch-ups materially better than filings forced by a notice, and first-time abatement plus reasonable-cause abatement give you two serious tools against the penalty.

If you are reading this and realising you have a catch-up to run, book a demo and we’ll scope it in 30 minutes. The clock is not on your side, but it is slower than you probably think.