Form 3520-A
Forms

Form 3520-A: Annual Information Return of Foreign Trust With a U.S. Owner

Form 3520-A is an annual information return of a foreign trust that must be filed by the foreign trust, and subsequently the U.S. owner, to satisfy its annual information reporting requirements under section 6048(b). U.S. owners must be aware of the exemptions and penalties for failure to file in order to ensure they are in compliance with U.S. law.

What is Form 3520-A?

Form 3520-A is an annual information return of a foreign trust with at least one U.S. owner. The form must be filed for the U.S. owner to meet their annual information reporting requirements under section 6048(b). Exceptions to filing are available through Rev. Proc. 2014-55 and Rev. Proc. 2020-17. Form 3520-A must be filed with the IRS by the 15th day of the 3rd month after the trust’s tax year, and the U.S. owners and U.S. beneficiaries must receive copies by the same date. Penalties may be imposed for failure to file or providing incorrect information.

IRS Form 3520-A – Who Needs to Fill It Out?

IRS FORM 3520-A must be completed and filed by foreign trusts with U.S. owners, in order to satisfy annual information reporting requirements. Generally, the foreign trust must file Form 3520-A by the 15th day of the 3rd month after the end of the trust’s tax year, and copies of the accompanying pages 3 through 5 must be given to U.S. Owners and U.S. Beneficiaries. However, if the foreign trust fails to file, the U.S. owner must complete and attach a substitute Form 3520-A to the U.S. owner’s Form 3520, by the Form 3520 due date in order to avoid a penalty being imposed. In certain cases there are exceptions or exemptions to filing. The form must be signed by the filer (individual, partnership, or corporation) and their paid preparer. There can be consequences for reporting inconsistencies, and criminal penalties may be imposed if the form is not filed or false information is provided. Reasonable cause may be cited in order to avoid penalties.

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Step-by-Step: Form 3520-A Instructions For Filling Out the Document

Filling out a Form 3520-A requires providing information to the Internal Revenue Service (IRS) regarding a foreign trust, its U.S. owners, and any U.S. beneficiaries. It is the responsibility of the U.S. owner to ensure the form is filed, and failure to do so may result in consequences like penalties and criminal charges. U.S. owners and beneficiaries must also receive copies of the required Foreign Grantor Trust Owner Statement and the Foreign Grantor Trust Beneficiary Statement. For an extension of time to file, the foreign trust must file the Form 7004 with the IRS. The signed form must adhere to the regulations described, such as filling it out with the required information and providing reasonable cause for any noncompliance. In order to prevent penalties, a U.S. owner must complete and attach a substitute Form 3520-A to their Form 3520 by the due date of the Form 3520.

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Below, we present a table that will help you understand how to fill out Form 3520-A.

Information Required for Form 3520-A Details
Foreign Trust Information Details about the foreign trust
U.S. Owner Information Details about the U.S. owner of the foreign trust
U.S. Beneficiary Information Details about any U.S. beneficiaries of the foreign trust
Filing Responsibility Responsibility of the U.S. owner to ensure form filing
Consequences of Non-Filing Potential penalties and criminal charges for non-filing
Required Statements Foreign Grantor Trust Owner Statement and Foreign Grantor Trust Beneficiary Statement
Extension of Time to File Procedure for the foreign trust to file for an extension using Form 7004
Compliance Regulations Requirements for filling out the form correctly and providing reasonable cause for noncompliance
Preventing Penalties Importance of completing and attaching a substitute Form 3520-A by the due date
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Do You Need to File Form 3520-A Each Year?

If you have a foreign trust with a U.S. owner, you must file Form 3520-A each year to provide information about the trust, its U.S. beneficiaries, and any U.S. person treated as an owner of the trust. Rev. Proc. 2014-55 and Rev. Proc. 2020-17 exempt certain Canadian retirement plans and certain tax-favored foreign trusts from foreign trust information reporting. The due date for Form 3520-A is the 15th day of the 3rd month after the end of the trust’s tax year; however, if filing a substitute Form 3520-A with your Form 3520, then the due date is the due date of the Form 3520. U.S. owners and fiduciaries responsible for filing must sign the form, or a substitute Form 3520-A must be completed and attached to the U.S. owner’s Form 3520 by the due date to avoid a penalty. There may also be criminal penalties for failure to file or filing a false or fraudulent return. Finally, a reasonable cause exception or a no penalties penalty may be available if the failure to comply with the requirements is due to reasonable cause and not willful neglect.

Download the official IRS Form 3520-A PDF

On the official IRS website, you will find a link to download Form 3520-A. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click the link below to download the official IRS Form 3520-A

Sources:

https://www.irs.gov/forms-pubs/about-form-3520-a

https://www.irs.gov/instructions/i3520a

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