Foreign owners of single member U.S. limited liability companies (“L.L.C.’s”) are often told that an L.L.C. with one member is a disregarded entity for U.S. tax purposes. They assume that it means exactly that: disregarded. The assumption is understandable. It was true in almost every relevant respect for many years. It is still true for U.S. income tax purposes. A single-member L.L.C. generally files no income tax return of its own. Its income, deductions, and assets belong to its owner. But the assumption is wrong in one important respect. Since 2017, a foreign-owned single-member L.L.C. has been treated as a domestic corporation for purposes of the reporting and record-maintenance obligations under Code §6038A, involving transactions between the L.L.C. and its foreign related parties. The reporting mechanism is Form 5472 (Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business.) The I.R.S. instructions confirm that a reporting corporation includes a ≥25% foreign-owned U.S. corporation, including a foreign-owned U.S. disregarded entity. On April 24, 2026, the I.R.S. released Chief Counsel Advice 202617012 (“C.C.A.”). The C.C.A. addresses when the reasonable cause exception to the Code §6038A penalty applies and, in particular, what it means for the I.R.S. to apply that exception “liberally” for certain small corporations. In her article, Galia Antebi explains (i) Code §6038, (ii) the reasonable cause standard in Treas. Reg. §1.6038A-4(b), and (c) how that standard was applied in the C.C.A. While the C.C.A. may not be used or cited as precedent, it serves to illustrate how the I.R.S. evaluates reasonable cause at the time of the C.C.A.’s issuance.