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remains open for the relevant tax year. If the agent resigns

Related Person

or liquidates, or its responsibility as an agent of the trust is

A related person generally includes any person who is

terminated, see Section IV(B) of Notice 97-34.

related to you for purposes of section 267 and 707(b). This

includes, but is not limited to:

U.S. Beneficiary

•

A member of your family — your brothers and sisters,

A U.S. beneficiary generally includes any U.S. person that

half-brothers and half-sisters, spouse, ancestors (parents,

could possibly benefit (directly or indirectly) from the trust

grandparents, etc.), lineal descendants (children,

(including an amended trust) at any time, whether or not the

grandchildren, etc.), and the spouses of any of these

person is named in the trust instrument as a beneficiary and

persons.

•

whether or not the person can receive a distribution from the

A corporation in which you, directly or indirectly, own

trust in the current year. In addition, a U.S. beneficiary

more than 50% in value of the outstanding stock.

includes:

•

See section 643(i)(2)(B) and the regulations under

A foreign corporation that is a controlled foreign

sections 267 and 707(b).

corporation (as defined in section 957(a)),

•

Person related to a foreign trust. A person is related to a

A foreign partnership if a U.S. person is a partner of the

foreign trust if such person, without regard to the transfer at

partnership, and

•

issue, is a grantor of the trust, a beneficiary of the trust, or is

A foreign estate or trust if the estate or trust has a U.S.

related to any grantor or beneficiary of the trust. See the

beneficiary.

definition of related person above.

A foreign trust will be treated as having a U.S. beneficiary

unless the terms of the trust instrument specifically prohibit

Reportable Event

any distribution of income or corpus to a U.S. person at any

A reportable event includes:

time, even after the death of the U.S. transferor, and the

1. The creation of a foreign trust by a U.S. person.

trust cannot be amended or revised to allow such a

2. The transfer of any money or property, directly or

distribution.

indirectly, to a foreign trust by a U.S. person, including a

transfer by reason of death. This includes transfers that are

U.S. Person

deemed to have occurred under sections 679(a)(4) and (5).

A U.S. person is:

3. The death of a citizen or resident of the United States

•

A citizen or resident alien of the United States (see Pub.

if:

519, U.S. Tax Guide for Aliens, for guidance on determining

•

The decedent was treated as the owner of any portion

resident alien status),

of a foreign trust under the grantor trust rules or

•

A domestic partnership,

•

Any portion of a foreign trust was included in the gross

•

A domestic corporation,

estate of the decedent.

•

Any estate (other than a foreign estate, within the

meaning of section 7701(a)(31)(A)), and

•

Responsible Party

Any domestic trust (defined on page 2).

Responsible party means:

•

U.S. Transferor

The grantor in the case of the creation of an inter vivos

trust,

A U.S. transferor is any U.S. person who:

•

The transferor, in the case of a reportable event (defined

1. Creates or settles a foreign trust.

above) other than a transfer by reason of death, or

2. Directly or indirectly transfers money or property to a

•

The executor of the decedent’s estate in any other case

foreign trust. This includes a U.S. citizen or resident who

(whether or not the executor is a U.S. person).

has made a deemed transfer under section 679(a)(4) or a

U.S. resident who has made a deemed transfer under

U.S. Agent

section 679(a)(5).

A U.S. agent is a U.S. person (defined below) that has a

3. Makes a sale to a foreign trust if the sale was at other

binding contract with a foreign trust that allows the U.S.

than arm’s-length terms or was to a related foreign trust, or

person to act as the trust’s authorized U.S. agent in applying

makes (or guarantees) a loan to a related foreign trust.

sections 7602, 7603, and 7604 with respect to:

4. Is the executor of the estate of a U.S. person and:

•

Any request by the IRS to examine records or produce

a. The decedent made a testamentary transfer (a

testimony related to the proper U.S. tax treatment of

transfer by reason of death) to a foreign trust,

amounts distributed, or required to be taken into account

b. Immediately prior to death, the decedent was treated

under the grantor trust rules, with respect to a foreign trust;

as the owner of any portion of a foreign trust under the

grantor trust rules, or

•

Any summons by the IRS for such records or testimony.

c. Any portion of a foreign trust’s assets were included in

A U.S. grantor, a U.S. beneficiary, or a domestic

the estate of the decedent.

corporation controlled by the grantor or beneficiary may act

as a U.S. agent. However, you may not treat the foreign

Generally, the person defined as the transferor is the

trust as having a U.S. agent unless you enter the name,

responsible party (defined above) who must ensure that

address, and taxpayer identification number of the U.S.

required information be provided or pay appropriate

agent on lines 3a through 3g. See Identification numbers on

penalties.

page 5.

If the person identified as the U.S. agent does not

produce records or testimony when requested or summoned

Specific Instructions

by the IRS, the IRS may redetermine the tax consequences

of your transactions with the trust and impose appropriate

Period Covered

penalties under section 6677.

The agency relationship must be established by the time

File the 2009 return for calendar year 2009 and fiscal years

the U.S. person files Form 3520 for the relevant tax year

that begin in 2009 and end in 2010. For a fiscal year, fill in

and must continue as long as the statute of limitations

the tax year space at the top of the form.

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Instructions For Form 3520 - Annual Return To Report Transactions With Foreign Trusts And Receipt Of Certain Foreign Gifts - 2009 Page 4

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