Does a foreign owned LLC need to fill form 1140 NR for US based affiliate programs (VIATOR) ?

[exweb]

Hello

I m a foreigner, non US resident, and single member owner of a US LLC (DEL). I sell digital marketing services online worldwide. I dont have a physical presence in the US and my services are exclusively online.

I ve made commissions with Viator US affiliate marketing program last year, by posting links to resell tours, on my blogs.  I think they are supposed to provide a 1099 report but did not get it as they want me to fill a w9 form which I think does not apply to foreigners.

I m aware I must fill the form 1120 + 5472 for April tax returns, but I m not sure If I need to also fill a form 1140 NR, and if my affiliate marketing commissions are considered as US source of income or not ?

I also have very few US based customers for my online marketing and travel marketing services (delivered outside of the US). its small amounts too. is this considered US source of income too that I must declare  ?

I would not like to receive a penalty for not filling a form I must fill. some accountants told me I must fill 1140 NR and some others told me not to! So confusing.

Thank you for your help!

Nick

[DaveF1006]

 Yes, you do need to file a US 1040 NR return because you received US-sourced income from your business. Turbo Tax does not handle 1040 NR return but our affiliate at Sprint Tax does. You may wish to contact them for more specific details by clicking on that blue link.

You should include all income from US sources no matter how big or small. Since you have a single-member LLC, it is not necessary to file a 1120 or 5472 because a single-member LLC is not a corporation. You may be able to to file the income on your own individual tax return without corporate forms. Contact Sprint Tax for more details.

[exweb]

Thanks for your reply! The IRS considers foreign owned LLCs as corporations since 2017 : "For tax years beginning on or after January 1, 2017, and ending on or after December 13, 2017, a foreign-owned U.S. DE is treated as an entity separate from its owner and classified as a corporation for the limited purposes of the requirements under section 6038A that apply to 25% foreign-owned domestic corporations."

Not sure how to understand this.... ? I also own 100% as a single member.

About the 1040 NR, I must report only my affiliate commissions from the US affiliate program right (what if they alread witheld the US taxes ?) ?

About customers from the US, I read american customers are not considered a US source of income (especially if I see a service online from abroad). right?

If I have a doubt about something can I use form 5472 to explain my doubt and be transparent with the IRS ?

Many thanks for your help

[exweb]

By the way, I 'm a non resident and not living in the US. does it change anything ? I see sprintax says "Sprintax is the ideal tax solution for every nonresident alien living in the US."

[DaveF1006]

To clarify, what country do you live in?

[exweb]

I live in Brazil I dont have any physical presence in the US and no employee. its a single member foreign owned LLC that earns exclusively only from Brazil

many people and accountants are saying 1040 NR is not for me even with VIATOR affiliate programs paying commissions from the US

I m very confused

[DaveF1006]

After reviewing the information with some of my colleagues, you do not need to file a 1040 NR return because the money you receive from US clients is not US-Sourced income. It is Brazilian source income because you live and work strictly in Brazil. 

Since your LLC is based in Delaware, you do need to fill out the first page of the 1120. In addition, you do need to fill out the 5472. Here are the IRS instructions for filling out this form and submitting to the IRS.