What IRS Form 3520-A (2019) Is For

Form 3520-A (2019) is an annual information return that foreign trusts with at least one U.S. owner must file to provide comprehensive information about the trust, its U.S. beneficiaries, and any U.S. person treated as an owner under the grantor trust rules (IRS Instructions for Form 3520-A (2019)). Each U.S. person treated as an owner of any portion of a foreign trust is responsible for ensuring that the foreign trust files Form 3520-A and furnishes the required annual statements to its U.S. owners and beneficiaries.

When You'd Use Form 3520-A for 2019 (Late or Amended Filing)

You would typically file a late or amended Form 3520-A (2019) if you received IRS notices regarding unfiled foreign trust reporting requirements, discovered previously unreported trust relationships, or need to correct inaccurate information from a previously filed return. Late filing scenarios often arise when taxpayers receive balance due notices or penalty assessments related to Form 3520-A non-compliance. If the foreign trust failed to file Form 3520-A, the U.S. owner must complete and attach a substitute Form 3520-A to their Form 3520 by the due date of the U.S. owner's Form 3520 to avoid additional penalties (IRS Instructions for Form 3520-A (2019)). For 2019 returns, the statute of limitations for refund claims has likely expired, but penalty abatement may still be available with reasonable cause.

Key Rules Specific to 2019

For 2019 Form 3520-A filings, the penalty structure included an initial penalty equal to the greater of $10,000 or 5% of the gross value of the portion of the trust's assets treated as owned by the U.S. person at the close of the tax year (IRS Instructions for Form 3520-A (2019)). The due date was the 15th day of the 3rd month after the end of the trust's tax year, with automatic 6-month extensions available by filing Form 7004. Canadian registered retirement savings plans (RRSPs) and Canadian registered retirement income funds (RRIFs) were specifically excepted from Form 3520-A filing requirements (Rev. Proc. 2014-55). The foreign trust was required to use its own Employer Identification Number (EIN) for filing, and reference ID numbers could be used when no EIN was available.

Step-by-Step (High Level)

• Gather account transcripts from the IRS to verify what returns were previously filed and identify any existing penalties or assessments
• Complete the correct 2019 Form 3520-A with all required attachments, including trust documents if no U.S. agent was appointed, and Foreign Grantor Trust Owner/Beneficiary Statements
• Attach required schedules such as the Foreign Trust Income Statement (Part II), Foreign Trust Balance Sheet (Part III), and any supporting documentation for transfers or distributions
• File by mail to Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409 (e-filing was not available for Form 3520-A in 2019)
• Keep copies of all filed documents, including proof of mailing via certified mail, and maintain contemporaneous records supporting valuations and computations

Common Mistakes and How to Avoid Them

• Missing U.S. agent appointment - If the trust doesn't have a U.S. agent, attach complete trust documents and summaries of all agreements; failure to do this can result in IRS redetermination of amounts
• Incorrect identification numbers - Use the foreign trust's EIN (not SSN or ITIN) on line 1b(1); if no EIN exists, obtain one using Form SS-4 before filing
• Incomplete substitute filings - When filing a substitute Form 3520-A because the trust failed to file, ensure it's attached to Form 3520 and signed by the U.S. owner with proper identification
• Missing required statements - Form 3520-A must include Foreign Grantor Trust Owner Statements for each U.S. owner and Foreign Grantor Trust Beneficiary Statements for each U.S. beneficiary who received distributions
• Valuation errors - Use fair market value determinations under section 2512 regulations and maintain contemporaneous records of how valuations were determined, even though formal appraisals aren't required
• Wrong filing address or method - Form 3520-A must be mailed to the specific Ogden, Utah address; electronic filing was not available for the 2019 version

What Happens After You File

The IRS typically takes 6-12 months to process Form 3520-A and related penalty cases, though complex trust arrangements may take longer. You may receive additional notices requesting clarification or supporting documentation, particularly if the trust structure involves multiple entities or jurisdictions. If penalties were previously assessed, you can request abatement by demonstrating reasonable cause in writing with a declaration under penalties of perjury (IRS Publication on Failure to File Form 3520/3520-A Penalties). Payment arrangements are available through Form 9465 (Installment Agreement Request) if penalties are upheld. You maintain appeal rights through the IRS Appeals Office for penalty determinations, and the case may remain open on examination controls (MFT P9) if multiple penalty issues exist. Continue monitoring IDRS transcripts for updates and maintain organized records of all correspondence.

FAQs

What's the penalty for late filing a 2019 Form 3520-A?

The initial penalty is the greater of $10,000 or 5% of the gross value of the trust assets treated as owned by the U.S. person, plus potential continuation penalties of $10,000 every 30 days until filed (IRS Instructions for Form 3520-A (2019)).

Can I get an extension for a 2019 Form 3520-A that I never filed?

Extensions were only available by filing Form 7004 by the original due date. For unfiled returns, focus on demonstrating reasonable cause for late filing rather than seeking extensions.

How do I get account transcripts to see what was previously filed?

Request transcripts online at IRS.gov, by calling 800-908-9946, or by mailing Form 4506-T. Use the foreign trust's EIN if available, or research under the U.S. owner's SSN for related filings.

Is there still time to claim refunds for overpaid 2019 penalties?

The refund statute for 2019 has generally expired, but penalty abatements based on reasonable cause may still be available regardless of the refund statute limitations.

What constitutes "reasonable cause" for late filing?

Reasonable cause requires showing the failure was due to circumstances beyond your control and not willful neglect. Foreign jurisdiction penalties for disclosure are specifically not considered reasonable cause (IRS Instructions for Form 3520-A (2019)).

Do I need to file amended state returns after filing Form 3520-A?

Form 3520-A is a federal information return that doesn't directly affect state tax liability, but some states may require separate foreign trust disclosures - consult your state's requirements.

What if the foreign trust never obtained an EIN?

The trust must obtain an EIN using Form SS-4 before filing Form 3520-A. Alternatively, use a reference ID number system as described in the 2019 instructions, but an EIN is strongly preferred for compliance purposes.

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