Foreign Inheritance & Form 3520. Penalty Relief & Exemptions: 3520 & 3520-A Filing Help. That is because technically an inheritance is a gift. Your client will also need to file a F.8938 in addition to F.3520. Form 3520 Late Filing & Delinquent Procedures: The form 3520 is used to report gifts from foreign individuals, entities, as well as trust distributions to the IRS.The reason why this form has many taxpayers up in arms is because of the sheer magnitude of the penalties the IRS issues regarding the noncompliance. To request an extension to file Form 3520, the person files for a regular extension with their tax return (Form 4868). Although duplicate reporting of the SSFA is not required, it will still be necessary to identify on which form … This form must be submitted to the U.S. Customs and Border Protection to import passenger vehicles, highway motorcycles and the corresponding engines into the United States. “If a U.S. person is granted an extension of time to file an income tax return , the due date for filing Form 3520 is the 15th day of the 10th month (October 15) … Some people incorrectly assume that if no tax is due on their inheritance, then they don't have to file Form 3520. Form 3520 Late Filing & Delinquent Procedures. If reasonable cause exists, the IRS may not impose a Form 3520 penalty. https://www.irsstreamlinedprocedures.com/irs-form-3520-reporting Form 3520: Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts. You may need a PDF reader to view some of the files on this page. Penalty Relief & Exemptions: 3520 & 3520-A Filing Relief: The Form 3520 Late Filing Penalty is extremely disproportionate to the “violation.”Sometimes (and oftentimes) it is simply a gift from a foreign parent to a U.S. person.The U.S. person is unaware that the gift must be reported to the IRS, so the form 3520 is never filed. Form 3520 is a reporting requirement --- not a tax. The IRS doesn't want your money, but would like to know exactly where your money is! Foreign Inheritance & Form 3520: The IRS Form 3520 is used to report certain foreign transactions involving gifts and trust s. So, why are Foreign Inheritances included in the filing requirements? Whether the US person filed an incomplete or incorrect Form 3520, or the US person completely failed to file a Form 3520 at all, the IRS’ focus in a Form 3520 audit is whether the failure to file a timely, correct and complete Form 3520 is excused by reasonable cause. The penalty for failing to file a Form 3520-A is the greater of $10,000 or 5% of the value of the corpus of the trust attributable to the U.S. owner. This is an … See EPA’s About PDF page to learn more. https://www.taxesforexpats.com/expat-tax-advice/Form3520.html EPA Standard Form 3520-1 (PDF) (2 pp, 228 K, February 2021 ) The answer is supplied by Form 3520-A, which the trustee of a foreign trust with a U.S. owner is required to file in order to report to the IRS, and to the U.S. owner, via a Foreign Grantor Trust Owner Statement—see the instructions to Form 3520-A—all of the information the U.S. owner needs to complete Form 3520.