Reminder to U.S. Owners of a Foreign Trust

 

The Internal Revenue Service (IRS) would like to remind all U.S. Owners, U.S. Agents, and Preparers of the filing requirements applicable to Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner (Under section 6048(b)).

  • A Form 3520-A reporting information on Foreign Trust activities is required to be filed by the 15th day of the third month following the end of the trust’s tax year. As a result, Form 3520-A for a foreign trust with a tax year ending December 31, 2014 is due on March 15, 2015. Each U.S. person treated as an owner of the Foreign Trust is responsible for ensuring that the foreign trust files the Form 3520-A and that the trust annually furnishes copies of the Foreign Grantor Trust Owner Statement and the Foreign Grantor Trust Beneficiary Statement to the U.S. owners and U.S. beneficiaries.
  • If an extension of time to file is needed, a Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns, must be filed with the IRS by the due date of Form 3520-A in order for it to be considered for approval.
  • Every foreign trust is required to have its own Employer Identification Number (EIN) to place in Part 1, Line 1b of Form 3520-A. To apply for an EIN, refer to How to Apply for an EIN.
  • Forms SS-4, 3520-A and 7004 are to be mailed to the following address: Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409
  • In addition, a filing requirement may exist for Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts.

Filing tips to avoid penalties:

  • Form 3520-A
    • File by the 15th day of the 3rd month after the end of the trust’s tax year, the due date may be extended by filing Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns.
    • Form 7004 must be filed with an Employer Identification Number (EIN) for the foreign trust. Forms 7004 for a foreign trust cannot be processed under an individual’s Social Security Number (SSN). Please obtain an EIN for the foreign trust.
    • If the foreign trust will not file a Form 3520-A, the U.S. owner of the foreign trust must file a substitute Form 3520-A by completing a Form 3520-A to the best of their ability and attaching it to a timely filed Form 3520, including extensions (see Form 3520 Instructions for more information on filing a substitute Form 3520-A). Do not separately file a duplicate Form 3520-A if you are filing a substitute 3520-A.
  • Form 3520
    • Be sure to check Form 3520, Box 1K, and enter the form number of the income tax return if an extension was filed.