Department of the Treasury
Internal Revenue Service
Annual Information Return of Foreign Trust
With a U.S. Owner
Section references are to the Internal Revenue Code unless otherwise noted.
continues after the IRS mails a notice of failure to comply with
required reporting. See section 6677(a).
Criminal penalties may be imposed under sections 7203,
Purpose of Form
7206, and 7207 for failure to file on time and for filing a false or
Form 3520-A is the annual information return of a foreign trust
with at least one U.S. owner. The form provides information
Reasonable cause. No penalties will be imposed if the
about the foreign trust, its U.S. beneficiaries, and any U.S.
taxpayer can demonstrate that the failure to comply was due to
person who is treated as an owner of any portion of the foreign
reasonable cause and not willful neglect.
Note: The fact that a foreign country would impose penalties
Who Must File
for disclosing the required information is not reasonable cause.
A foreign trust must file Form 3520-A to satisfy its annual
Similarly, reluctance on the part of a foreign fiduciary or
information reporting requirements under section 6048(b). Each
provisions in the trust instrument that prevent the disclosure of
U.S. person treated as an owner of any portion of a foreign trust
required information is not reasonable cause.
under sections 671 through 679 is responsible for ensuring that
the foreign trust files Form 3520-A and furnishes the required
annual statements to its U.S. owners and U.S. beneficiaries.
When and Where To File
A distribution is any gratuitous transfer of money or other
File a complete Form 3520-A (including pages 3 and 4) with the
property from a trust, whether or not the trust is treated as
Internal Revenue Service Center, Philadelphia, PA 19255, by
owned by another person under the grantor trust rules, and
the 15th day of the 3rd month after the end of the trust’s tax
without regard to whether the recipient is designated as a
year. Give copies of the Foreign Grantor Trust Owner
beneficiary by the terms of the trust. A distribution includes the
Statement (page 3) and the Foreign Grantor Trust
receipt of trust corpus and the receipt of a gift or bequest
Beneficiary Statement (page 4) to the U.S. owners and U.S.
described in section 663(a).
beneficiaries by the 15th day of the 3rd month after the end of
A distribution also includes constructive transfers from a
the trust’s tax year.
trust. For example, if charges you make on a credit card are
An extension of time to file Form 3520-A (including the
paid by a foreign trust or guaranteed or secured by the assets
statements) may be granted. For details, get Form 2758,
of a foreign trust, the amount charged will be treated as a
Application for Extension of Time To File Certain Excise,
distribution to you by the foreign trust. Similarly, if you write
Income, Information, and Other Returns.
checks on a foreign trust’s bank account, the amount will be
treated as a distribution.
Who Must Sign
Also, if you receive a payment from a foreign trust in
If the return is filed by:
exchange for property transferred to the trust or services
An individual or fiduciary, it must be signed and dated by that
rendered to the trust, and the fair market value (FMV) of the
individual or fiduciary.
payment received exceeds the FMV of the property transferred
A partnership, it must be signed and dated by a general
or services rendered, the excess will be treated as a distribution
partner or limited liability company member.
A corporation, it must be signed and dated by the president,
vice president, treasurer, assistant treasurer, chief accounting
officer, or any other corporate officer (such as a tax officer)
1. If you sell stock with an FMV of $100 to a foreign trust
authorized to sign.
and receive $150 in exchange, you have received a distribution
The paid preparer must complete the required preparer
2. If you receive $100 from the trust for services performed
Sign the return, by hand, in the space provided for the
by you for the trust, and the services have an FMV of $20, you
preparer’s signature (signature stamps are not acceptable).
have received a distribution of $80.
Give a copy of the return to the filer.
If you, or a person related to you, received a loan from a
related foreign trust, it will be treated as a distribution to you
unless the obligation you issued in exchange is a qualified
The U.S. owner is subject to a penalty equal to 5% of the gross
obligation. For this purpose, a loan to you by an unrelated third
value of the portion of the trust’s assets treated as owned by
party that is guaranteed by a foreign trust is generally treated as
the U.S. person at the close of that year if the foreign trust:
a loan from the trust. See Section V of Notice 97-34, 1997-1
(a) fails to file a timely Form 3520-A or (b) does not furnish the
C.B. 422. You can find Notice 97-34 on page 22 of Internal
information required by section 6048(b). See section 6677(b).
Revenue Bulletin 1997-25 at
Additional penalties may be imposed if noncompliance
Cat. No. 25096U