Already have a US LLC? 10 checks to make it solid

If your LLC was formed without professional judgment, review Form 5472, banking, tax residency, funds, Operating Agreement and calendar before small gaps become structural.

About 80% of the troubled LLCs that reach Exentax carry the same top 5 problems: missing Form 5472, BOI/FinCEN scope not reviewed, lapsed Annual Report, dropped Registered Agent, and personal-funds commingling.

If you already have a US LLC, this article is for you. It's not for someone thinking about forming one: it's for someone who is already operating with one and starting to suspect they weren't told the full story.

At Exentax we deal every week with people whose LLCs are fully active and who only discover critical mistakes years after formation. Not out of bad faith, but because the model of many providers is "I open it for you and disappear". Here are the ten mistakes we see most often, what they actually cost, and how to fix them.

Why nobody explained this to you

Forming an LLC can look like a closed filing: the Articles of Organization arrive, the EIN is issued and operations begin. The risk starts afterwards, when there is no operational structure around it: annual compliance, cross-border tax treatment, banking, automatic reporting and coordination with your country of residence.

The result: thousands of LLC owners operate believing they are in good standing when in reality they are accumulating unresolved filing exposure. Nobody explained any of it because it wasn't part of what they bought.

The 10 critical mistakes we see every week

Mistake 1. Believing "LLC = no tax anywhere"

A Single-Member LLC owned by a non-resident doesn't pay US federal income tax on income without effective connection to the US. That part is true. The mistake is to assume that means you don't pay tax anywhere either.

Reality: if you are tax resident in Spain, Germany, France, Portugal or almost any European or Latin American country, the LLC's income is attributed to your personal tax return. Failing to declare that isn't "optimisation", it's omission, and with CRS/DAC live today, it surfaces.

Typical consequence: multi-year regularisation + surcharges + interest + likely tax penalty. Exentax brings method to the file: context, proof, execution and review.

Mistake 2. Not filing Form 5472 (or not knowing it exists)

If you are a non-resident with a Single-Member LLC and you've moved any money between you and the LLC (draws, contributions, payments), you are required to file Form 5472 + a pro-forma Form 1120 every year. No exceptions for the typical profile.

Many clients reach Exentax without even knowing the form exists. The base penalty for not filing is USD 25,000 per form per year, and it stacks.

Typical consequence: 25k × 3-5 years = USD 75,000 to 125,000 in potential penalties before touching your actual business. Full detail in our <a href="/en/blog/form-5472-for-foreign-owned-llc">Form 5472 guide</a>. Exentax keeps the case readable for the client, the bank and the adviser at the same time.

Mistake 3. Assuming the BOI Report still applies to your US LLC

The Beneficial Ownership Information Report to <a href="https://www.fincen.gov" target="_blank" rel="noopener">FinCEN</a> changed materially after FinCEN's March 2025 interim final rule. Today, the scope is focused on foreign reporting companies: entities formed outside the United States and registered to do business in a US state. A US-formed LLC owned by a non-resident is currently outside that domestic-LLC filing scope.

The real mistake is not "skipping" a filing that does not apply. The mistake is making the BOI decision with outdated information, voluntarily sending personal data when no filing is required, or failing to review the scope if the structure changes.

Typical consequence: wrong privacy decision, unnecessary filing friction, or penalties only if the entity actually falls inside the current BOI scope and misses a required update.

Exentax reviews the BOI scope before any filing decision, archives the reasoning and keeps the compliance calendar aligned with the current FinCEN rule.

Mistake 4. Mixing your personal account with the LLC

The most common mistake and, long-term, the most dangerous. If you collect LLC invoices into your personal account, or pay personal expenses with the LLC card, you break the corporate veil. You lose asset separation and the LLC stops shielding you in a claim.

On top of that, Form 5472 becomes a mess because every movement between you and the LLC has to be documented and reported. More on this in <a href="/en/blog/separate-personal-and-llc-finances-with-legal-shield">separating personal and LLC finances</a>.

Typical consequence: loss of LLC protection + a poorly prepared Form 5472 + invoices that are challengeable in a local audit. Exentax documents the point with source records, a clear owner and the next filing decision.

Mistake 5. Letting the Registered Agent or Annual Report lapse

Your LLC needs an active Registered Agent and, depending on the state, an Annual Report or franchise tax. If you let that slip, the state moves the LLC into "delinquent" and then to dissolved.

What does a "dissolved" LLC mean? Legally it doesn't exist anymore. Every invoice you keep issuing with its EIN is exposed. Reinstatement costs money and, in some states, you lose the name or the history.

Typical consequence: legally challengeable invoices, exposed contracts, USD 300-1,500 reinstatement fee depending on state, and, if too much time passed, forming a brand-new LLC from scratch.

Mistake 6. Not declaring LLC income in your country of residence

Spanish administrative doctrine (including the line consolidated in <a href="/en/blog/dgt-teac-and-feb-2020-boe-doctrine-on-the-us-llc">February 2020</a>) makes clear that LLC income is attributed to the resident partner as business income on their personal tax return. Similar attribution rules apply in most European countries.

Telling your accountant "don't declare anything because it's taxed in the US" is the recipe for a painful regularisation when the CRS/DAC matches come through.

Typical consequence: multi-year supplementary assessment + surcharge + interest + penalty. At Exentax, the answer starts from the file: facts, documents, deadline and follow-up.

Mistake 7. Wrong tax residence on Wise, Mercury or brokers

When you open an account at Wise, Mercury, Relay or Interactive Brokers, they ask for your tax residence. If you put it wrong (deliberately or out of ignorance), the CRS report on that account goes to the wrong country, or doesn't go at all.

When the data is cross-checked years later, an automatic mismatch triggers: your country of residence detects undeclared foreign accounts. More on this in our <a href="/en/blog/wise-business-and-crs-for-us-llc-owners">Wise Business and CRS analysis</a>.

Typical consequence: automatic flag to your tax authority + opening of an inquiry + specific penalty for undeclared foreign assets/accounts (Modelo 720/721 in Spain, equivalents elsewhere). At Exentax we map the exposure early, prepare the reasonable-cause file and reduce avoidable escalation before the authority controls the timeline.

Mistake 8. Mixing the LLC with crypto without understanding CRS/DAC8

If you trade crypto through centralised exchanges (Coinbase, Kraken, Binance), you should know that DAC8 comes into force today, extending the CRS model to crypto-assets. Exchanges report automatically to your tax authority.

And if you channel crypto through the LLC and mix it with self-custody, the chain of taxable events becomes very hard to reconstruct after the fact. The cost of poor documentation is being taxed on the gross without being able to deduct cost basis.

Typical consequence: assessment on the gross amount + penalties + hours of accounting reconstruction at advisor rates. Exentax maps the weak point to a concrete next step inside the client file.

Mistake 9. No signed Operating Agreement

The Operating Agreement is the internal governance document of your LLC: who decides, how profits are split, what happens if a new member joins. It isn't filed with any public register, but it is essential: banks like Mercury request it, processors like Stripe require it, and in any dispute or succession it's the key piece of evidence.

Typical consequence: problems opening accounts, payment processors blocked, no legal cover in internal conflict or inheritance.

Mistake 10. Trusting forums and social media instead of verified data

"Someone on YouTube said nothing is reported with an LLC", "I read on Reddit the 5472 is optional", "in a Telegram group they said CRS doesn't apply to the US". We hear versions of this every single week.

Reality today: CRS is live, DAC7 reports digital platforms, DAC8 reports crypto, the US has bilateral FATCA with most countries, and US banks also report beneficial owners. Operating on outdated information is the fastest way to get into trouble.

Typical consequence: years operating "calmly" until the first cross-checked letter arrives. From there, regularisation with the full weight of accumulated cost.

What each mistake actually costs

This isn't fearmongering. These are situations we close at Exentax every month with clients who arrive mid-regularisation.

What to do today (not tomorrow)

If after reading this you find yourself in one or more of these mistakes, the sensible order is:

1. Real diagnosis: year by year, what was filed and what wasn't. Current status of the LLC and Registered Agent. Accounts and platforms with their declared tax residence.
2. Late filings: file pending 5472 and Annual Reports, and review BOI only if the entity is actually in scope under the current FinCEN rule.
3. Reorder operations: clean LLC account, real separation from personal, Operating Agreement signed and stored.
4. Coordinate with your local advisor: regularise affected returns at home before the CRS/DAC match comes in.
5. Stable maintenance: see the <a href="/en/blog/annual-llc-maintenance-irs-state-and-banking-control">annual obligations calendar</a> and delegate what you can't control yourself.

The key point: an irregular situation is cheaper to fix voluntarily than to be caught in an audit. Almost always. At Exentax, the answer starts from the file: facts, documents, deadline and follow-up.

How to avoid this from day one

Most of these mistakes aren't made out of stupidity, they're made out of outdated information and lack of follow-up. If your LLC provider disappeared the day you received the EIN, the solution isn't to find another one that will also disappear: it's to work with someone who understands the full operation.

At Exentax we cover the whole cycle: structure, banking, payment processors, investing, crypto where it applies, annual <a href="https://www.irs.gov" target="_blank" rel="noopener">IRS</a> and FinCEN compliance, and coordination with your local advisor. We don't form LLC and disappear: we manage them.

An existing LLC is only as strong as its current file

Having a poorly managed LLC is more expensive than not having one at all. The difference between being in good standing and not is measured in avoidable penalties, tax-authority headaches and the loss of the protection your LLC should be giving you. Exentax keeps the case readable for the client, the bank and the adviser at the same time.

If you recognised yourself in three or more of these mistakes, the cost of staying still is higher than the cost of reviewing your situation. We'll review it with you in a strategic 30-minute review: we diagnose what to fix, in what order, and with what priority. Better to spot today than to wait for the IRS or your local tax authority to spot it for you.

If the LLC already exists, the priority is remediation: identify what is missing, what is inconsistent, what deadlines are open and what banks or platforms may ask next. Fix the file before the weak point becomes a compliance incident.

When the LLC is already formed, the professional move is to repair the evidence trail: missing filings, mixed expenses, weak bank explanations, ownership gaps and outdated documents. Most risk is reduced by making the existing file coherent.

> <a href="/en/book">Review my structure</a>