What IRS Form 3520-A (2015) Is For

Form 3520-A is the annual information return that foreign trusts with at least one U.S. owner must file to report trust activities and operations. U.S. persons who are treated as owners of any portion of a foreign trust under the grantor trust rules are responsible for ensuring the foreign trust files this form and provides required statements to U.S. owners and beneficiaries (IRS Instructions for Form 3520-A (2015)).

When You'd Use Form 3520-A for 2015 (Late or Amended Filing)

You'll typically need to file a late or amended Form 3520-A for 2015 if you received IRS notices about missing filings, discovered the trust failed to file timely, or need to correct previously filed information.

Common scenarios include:

• Receiving Letter 3804 penalty notices
  
  
• Discovering unfiled years during tax compliance reviews
  
  
• Preparing current returns and realizing prior year obligations weren’t met
  
  

If the foreign trustee failed to file, you as the U.S. owner must prepare and attach a substitute Form 3520-A to your Form 3520 to avoid continued penalties (IRS Publication: Failure to File Form 3520/3520-A Penalties).

Key Rules Specific to 2015

• Due date: 15th day of the 3rd month after the trust’s tax year end (March 15, 2016 for calendar year trusts)
  
  
• Special reporting: Included requirements for excepted specified foreign financial assets tied to Form 8938 compliance
  
  
• Penalty amounts: Greater of $10,000 or 5% of the gross value of the trust portion owned by the U.S. person, with continuation penalties of $10,000 per 30-day period after the 90-day notice period (IRS Instructions for Form 3520-A (2015))
  
  

Step-by-Step (High Level)

• Gather transcripts: Obtain account transcripts from the IRS to verify filings and penalties
• Complete correct-year form: Use the 2015 version of Form 3520-A including the Foreign Trust Income Statement, Balance Sheet, and owner/beneficiary statements
• Attach required schedules: Include U.S. agent authorization (if applicable), trust documents if no U.S. agent was appointed, and detailed transfer statements for Part I Line 5
• Mailing considerations: Send to Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409 (no e-filing in 2015)
• Keep copies: Retain full copies of forms, attachments, and correspondence

Common Mistakes and How to Avoid Them

• Missing trustee signature: Ensure trustee or authorized person signs, not just the U.S. owner preparing a substitute
  
  
• Incomplete owner statements: Prepare a Foreign Grantor Trust Owner Statement for each U.S. owner—even in substitute filings
  
  
• Wrong identification numbers: Use the trust’s EIN or a proper reference ID (no special characters)
  
  
• Inadequate documentation: If no U.S. agent was appointed, attach full trust documents and amendments
  
  
• Incorrect gross value calculations: Use fair market value on the valuation date, with contemporaneous records
  
  
• Missing reasonable cause documentation: Attach a written statement with penalties of perjury language when claiming reasonable cause
  
  

What Happens After You File

The IRS usually takes 6–8 weeks to process Form 3520-A and update your account. You may receive acknowledgment or further penalty notices if the filing is incomplete.

• Penalty relief: Request reasonable cause abatement with detailed explanations and proper declaration
  
  
• Payment options: Full payment, installment agreements (Form 9465), or offers in compromise
  
  
• Appeals: Available for penalty determinations through the IRS Appeals Office
  
  
• Statute of limitations: Three years from filing a complete and accurate return (IRS IRM 20.1.9)
  
  

FAQs

Can I still file Form 3520-A for 2015 even though it’s years late?

Yes, file as soon as possible. Penalties may apply, but filing stops ongoing penalty accrual.

How do I know what penalties have been assessed?

Request account transcripts from the IRS or consult a tax professional with IDRS access.

What if the foreign trustee refuses to cooperate?

U.S. owners must file substitute Forms 3520-A to the best of their ability and attach them to Form 3520.

Can penalties be reduced or eliminated?

Yes, through reasonable cause, first-time abatement, or relief under Revenue Procedure 2020-17.

Should I amend my state tax returns too?

Depends on your state. Requirements vary—consult a tax professional.

What’s the statute of limitations for refund claims on overpaid penalties?

Generally three years from when the penalty was paid, though circumstances may alter this.

Do I need professional help for complex foreign trust filings?

Strongly recommended, given the complexity and significant penalties involved.

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