What IRS Form 3520-A (2020) Is For

Form 3520-A is the annual information return that foreign trusts with at least one U.S. owner must file to provide detailed information about the trust, its U.S. beneficiaries, and any U.S. person treated as an owner under grantor trust rules. Each U.S. person considered an owner of any portion of a foreign trust is responsible for ensuring the foreign trust files this form and provides required annual statements to U.S. owners and beneficiaries (IRS Instructions for Form 3520-A (2020)).

When You'd Use Form 3520-A for 2020 (Late or Amended Filing)

You would typically need to file Form 3520-A for 2020 now if you received IRS notices about missing filings, discovered unfiled obligations during tax preparation, or need to correct previously filed information. Late filing scenarios often arise when taxpayers receive IRS Letter 3804 demanding the return, when balance due notices reveal unreported foreign trust income, or when preparing current returns reveals past compliance gaps. If the foreign trust failed to file, U.S. owners must complete a substitute Form 3520-A and attach it to their Form 3520 by their individual return due date (typically April 15 for 2020) to avoid additional penalties (IRS Instructions for Form 3520-A (2020)).

Key Rules Specific to 2020

The 2020 Form 3520-A was governed by rules that included exemptions under Rev. Proc. 2020-17 for certain eligible individuals' tax-favored foreign retirement and educational trusts. The form was due by the 15th day of the 3rd month after the trust's tax year end (March 15 for calendar year trusts). For 2020, initial penalties for failing to file were the greater of $10,000 or 5% of the gross value of trust assets treated as owned by the U.S. person, with continuation penalties of $10,000 every 30 days after IRS notice (IRS Instructions for Form 3520-A (2020)).

Step-by-Step (High Level)

• Gather transcripts: Obtain tax account transcripts from IRS.gov or call 1-800-908-9946 to verify what's already on file
• Complete the correct-year form: Use the actual 2020 Form 3520-A, available at IRS.gov/pub/irs-prior/f3520a--2020.pdf
• Attach required schedules: Include Foreign Grantor Trust Owner Statements (pages 3-4) and Beneficiary Statements (page 5) for each applicable person
• Mailing procedures: Send to Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409, or if filing substitute form, attach to Form 3520
• Keep copies: Retain all filed documents and proof of mailing for your records (IRS Instructions for Form 3520-A (2020))

Common Mistakes and How to Avoid Them

• Using wrong EIN: Form 3520-A requires the foreign trust's EIN, not the U.S. owner's SSN or ITIN - apply for trust EIN at IRS.gov/EIN if needed
• Incomplete U.S. agent designation: Failing to properly designate a U.S. agent (lines 3a-3g) can trigger IRS redetermination of trust amounts - ensure binding agent agreement is attached
• Missing trust documents: When no U.S. agent exists, attach complete trust instrument copies, organizational charts, and summary of terms - incomplete documentation leads to processing delays
• Incorrect penalty calculations: Verify gross reportable amounts match actual trust values - understating values can trigger additional assessments later
• Wrong signature authority: Only authorized trustees or U.S. owners (for substitute forms) can sign - invalid signatures delay processing
• Inconsistent reporting: Ensure U.S. beneficiary and owner tax returns match Form 3520-A information or file Form 8082 to report inconsistencies (IRS Instructions for Form 3520-A (2020))

What Happens After You File

The IRS typically takes 6-8 weeks to process Form 3520-A, though complex cases may take longer. You'll receive acknowledgment of receipt, and any penalty assessments will appear on your tax account within 3-6 months. If you owe penalties, you can request a payment plan using Form 9465 or pay online at IRS.gov/payments. For penalty disputes, you have appeal rights through the Office of Appeals, and reasonable cause arguments must be submitted in writing with penalties-of-perjury declarations. If the IRS proposes additional penalties or adjustments, you'll receive a 30-day letter explaining your rights before final assessment (IRS Publication on Form 3520/3520-A Penalties).

FAQs

Can I still file Form 3520-A for 2020 even though it's years late?

Yes, there's no statute of limitations preventing late filing, though penalties continue accumulating until you file complete and accurate returns.

What penalties will I owe for filing 2020 Form 3520-A late?

Initial penalty is the greater of $10,000 or 5% of trust assets you owned, plus $10,000 continuation penalties every 30 days after IRS notice until filing.

Do I need tax transcripts before filing a late 2020 Form 3520-A?

While not required, transcripts help verify what the IRS has on file and prevent duplicate filings - obtain free transcripts at IRS.gov or call 1-800-908-9946.

Is there still time to claim refunds from 2020 if I file Form 3520-A late?

The refund statute typically expires 3 years after the return due date, so 2020 refund opportunities have likely passed unless special circumstances apply.

Should I amend my state returns after filing a late federal Form 3520-A?

State requirements vary - consult your state tax agency, as some states have conformity requirements while others don't recognize foreign trust reporting.

What constitutes "reasonable cause" for late filing of Form 3520-A?

Reasonable cause requires showing failure was due to circumstances beyond your control, not willful neglect - foreign penalties for disclosure or trust document restrictions are not reasonable cause (IRS Instructions for Form 3520-A (2020)).

Can I file Form 3520-A electronically for 2020?

Form 3520-A must be filed on paper - electronic filing is not available for this form, so mail to the Ogden processing center address listed in the instructions.

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