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2016

Department of the Treasury

Internal Revenue Service

Instructions for Form 3520-A

Annual Information Return of Foreign Trust With a U.S. Owner

Section references are to the Internal Revenue Code

Note. An extension of time to file an income tax return will

unless otherwise noted.

not provide an extension of time to file Form 3520-A. Form

7004 must be filed in order to request an extension of time

General Instructions

to file Form 3520-A.

Who Must Sign

Future Developments

If the return is filed by:

For the latest information about developments related to

An individual or fiduciary, it must be signed and dated

Form 3520-A and its instructions, such as legislation

by that individual or fiduciary;

enacted after they were published, go to

A partnership, it must be signed and dated by a general

form3520a.

partner or limited liability company member; or

Purpose of Form

A corporation, it must be signed and dated by the

president, vice president, treasurer, assistant treasurer,

Form 3520-A is the annual information return of a foreign

chief accounting officer, or any other corporate officer

trust with at least one U.S. owner. The form provides

(such as a tax officer) authorized to sign.

information about the foreign trust, its U.S. beneficiaries,

and any U.S. person who is treated as an owner of any

The paid preparer must complete the required preparer

portion of the foreign trust under the grantor trust rules

information and:

(sections 671 through 679).

Sign the return in the space provided for the preparer's

signature, and

Who Must File

Give a copy of the return to the filer.

A foreign trust with a U.S. owner must file Form 3520-A in

Penalties

order for the U.S. owner to satisfy its annual information

reporting requirements under section 6048(b). Each U.S.

The U.S. owner is subject to an initial penalty equal to the

person treated as an owner of any portion of a foreign

greater of $10,000 or 5% of the gross value of the portion

trust under the grantor trust rules (sections 671 through

of the trust's assets treated as owned by the U.S. person

679) is responsible for ensuring that the foreign trust files

at the close of that tax year, if the foreign trust (a) fails to

Form 3520-A and furnishes the required annual

file a timely Form 3520-A, or (b) does not furnish all of the

statements to its U.S. owners and U.S. beneficiaries.

information required by section 6048(b) or includes

incorrect information. See section 6677(a) through (c).

Exception. Custodians of Canadian registered

retirement savings plans (RRSPs) and Canadian

The U.S. owner is subject to an additional separate

registered retirement income funds (RRIFs) are not

penalty equal to the greater of $10,000 or 5% of the gross

required to file Form 3520-A with respect to a U.S. citizen

value of the portion of the trust's assets treated as owned

or resident alien who holds an interest in an RRSP or

by the U.S. person at the close of that tax year, if the U.S.

RRIF. In addition, custodians of any other Canadian

owner (a) fails to file a timely Form 3520 (Part II), or (b)

retirement plan within the meaning of section 3 of Rev.

fails to furnish all of the information required by section

Proc. 2014-55 are not required to file Form 3520-A for a

6048(b) or includes incorrect information. See section

U.S. citizen or resident alien owner or beneficiary. See

6677(a) through (c).

Rev. Proc. 2014-55, 2014-44 I.R.B. 753, available at

Additional penalties will be imposed if the

irb/2014-44_IRB/ar10.html.

noncompliance continues for more than 90 days after the

When and Where To File

IRS mails a notice of failure to comply with the required

reporting. For more information, see section 6677.

File a complete Form 3520-A (including the statements on

pages 3 and 4) with the Internal Revenue Service Center,

Criminal penalties may be imposed under sections

P.O. Box 409101, Ogden, UT 84409, by the 15th day of

7203, 7206, and 7207 for failure to file on time and for

the 3rd month after the end of the trust's tax year. Give

filing a false or fraudulent return.

copies of the Foreign Grantor Trust Owner Statement

(page 3 of Form 3520-A) and the Foreign Grantor Trust

Penalties may also be imposed under section 6662(j)

Beneficiary Statement (page 4 of Form 3520-A) to the

for undisclosed foreign financial asset understatements.

U.S. owners and U.S. beneficiaries by the 15th day of the

Reasonable cause. No penalties will be imposed if the

3rd month after the end of the trust's tax year.

taxpayer can demonstrate that the failure to comply was

An extension of time to file Form 3520-A (including the

due to reasonable cause and not willful neglect.

statements on pages 3 and 4) may be granted by filing

Form 7004. For details, see Form 7004, Application for

Note. The fact that a foreign country would impose

Automatic Extension of Time To File Certain Business

penalties for disclosing the required information is not

Income Tax, Information, and Other Returns.

reasonable cause. Similarly, reluctance on the part of a

Aug 30, 2016

Cat. No. 25096U

Instructions For Form 3520-A - Annual Information Return Of Foreign Trust With A U.s. Owner - 2016

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