{"id":194,"date":"2022-10-25T19:40:32","date_gmt":"2022-10-25T19:40:32","guid":{"rendered":"https:\/\/www.hrblock.com\/expat-tax-preparation\/resource-center\/?p=194"},"modified":"2023-01-10T14:03:17","modified_gmt":"2023-01-10T18:03:17","slug":"form-3520-a-a-guide-for-u-s-expats","status":"publish","type":"post","link":"https:\/\/www.hrblock.com\/expat-tax-preparation\/resource-center\/forms\/form-3520-a-a-guide-for-u-s-expats\/","title":{"rendered":"Form 3520-A: A Guide for U.S. Expats"},"content":{"rendered":"\n

If you take any part in a foreign trust, the IRS wants to know about it\u2014even if you\u2019re only the one managing the assets for a beneficiary who can\u2019t realistically do it themselves. That\u2019s where Form 3520-A comes in.<\/p>\n\n\n\n

File on my own<\/a><\/div>
File with an advisor<\/a><\/div><\/div>\n\n\n\n

What is Form 3520-A?<\/h2>\n\n\n\n

Tax form 3520-A is a form filed annually by the trustee of foreign trust to provide information to the IRS about the trust. This information includes its U.S. beneficiaries, any U.S. person who has any ownership the foreign trust, and also income of the trust. It is similar to a financial statement that a U.S. trust would file. IRS form 3520-A documents transactions between the trust and the U.S. owner, as well as between the trust and US beneficiary.<\/p>\n\n\n\n

Not all trust owners need to file 3520-A\u2014the IRS recently made a change excluding certain foreign trusts used exclusively for retirement funds\/pension, educational purposes, medical purposes, and a few other criteria.<\/strong><\/p>\n\n\n\n

Why does the IRS want to know all this? In short, to prevent tax evasion. Over the past few years, the IRS has really cracked down on U.S. persons who fail to disclose foreign financial accounts, and the fines and penalties for getting caught are pretty steep.<\/p>\n\n\n\n

Penalties for not filing the Annual Information Return of Foreign Trust with a U.S. Owner<\/h3>\n\n\n\n

The IRS has recently become more aggressive in finding and penalizing those Americans who don\u2019t properly report foreign financial information, which is bad news if you\u2019re supposed to file this form and you forget. Most forms have steep fines associated when you fail to file them (Form 5471, for example, comes with a $10,000 penalty for each annual accounting period you miss). If you forget to file more than one form, those fines can really add up. If you forget to file more than one form, those fines can really add up. While they do vary on a case-by-case basis, penalties for not filing 3520-A include<\/a>:<\/p>\n\n\n\n