What IRS Form 3520-A (2023) 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 the grantor trust rules (IRS Instructions for Form 3520-A (2023)). This form allows U.S. owners to satisfy their reporting requirements under section 6048(b) and ensures proper tax treatment of foreign trust income and distributions.

When You'd Use Form 3520-A for 2023 (Late or Amended Filing)

You might need to file a late or amended Form 3520-A for 2023 if you received IRS notices about unfiled returns, discovered errors in previously filed forms, or if the foreign trustee failed to file timely. Late filings often occur when taxpayers receive CP notices or Letter 3804 demanding the return, or when preparing current-year returns reveals missing prior-year filings. If you're within the refund statute period and owed a refund for 2023, filing the delinquent return could still allow you to claim it, though penalties and interest will typically apply to any balance due.

Key Rules Specific to 2023

The 2023 Form 3520-A follows the same fundamental requirements as current versions, with the due date being the 15th day of the 3rd month after the trust's tax year end (IRS Instructions for Form 3520-A (2023)). For calendar-year trusts, this means March 15, 2024 was the original due date. The form must include complete financial statements, Foreign Grantor Trust Owner Statements, and Foreign Grantor Trust Beneficiary Statements. If the trustee failed to file, the U.S. owner must complete a substitute Form 3520-A and attach it to their Form 3520 by their personal return due date.

Step-by-Step (High Level)

• Gather documentation: Obtain account transcripts from IRS.gov to verify what's on file, collect trust documents, financial statements, and beneficiary information for 2023
• Complete Form 3520-A: Use the December 2023 revision, ensuring all parts are filled out including the income statement (Part II), balance sheet (Part III), and required owner/beneficiary statements
• Attach required schedules: Include Foreign Grantor Trust Owner Statements and Foreign Grantor Trust Beneficiary Statements; if no U.S. agent was appointed, attach trust documents and organizational charts
• File with IRS: Mail to Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409; the form cannot be e-filed
• Keep copies: Retain all documentation and proof of mailing for your records

Common Mistakes and How to Avoid Them

• Using wrong TIN: Always use the foreign trust's EIN on line 1b, never the U.S. owner's SSN or ITIN (IRS Instructions for Form 3520-A (2023))
• Incomplete owner statements: Each U.S. owner must receive pages 3-4 (Foreign Grantor Trust Owner Statement) by the filing deadline
• Missing U.S. agent designation: If no U.S. agent is appointed, you must attach extensive trust documentation including organizational charts and trust instruments
• Incorrect gross value calculations: Ensure gross values are calculated using fair market value principles under section 2512 without regard to restrictions on the property
• Failing to file substitute returns: If the trustee doesn't file, U.S. owners must complete substitute Form 3520-A attached to their Form 3520 or face additional penalties
• Mixing calendar and fiscal years: Clearly indicate the trust's tax year at the top of each page and ensure consistency across all statements

What Happens After You File

Processing typically takes several months, and you should expect to receive acknowledgment or follow-up correspondence from the IRS. If penalties were assessed, you'll receive notices explaining the amounts owed and payment options. You can request installment agreements using Form 9465 if you cannot pay penalties in full (IRS.gov Payment Plans). Interest and late payment penalties continue to accrue until full payment is made. If you disagree with penalty assessments, you have appeal rights and can present reasonable cause arguments in writing with the required "under penalties of perjury" declaration (IRC Section 6677(d)).

FAQs

What penalties apply for late filing Form 3520-A for 2023?

The initial penalty is the greater of $10,000 or 5% of the trust's gross value, plus continuing penalties of $10,000 every 30 days after 90 days from the IRS notice (IRC Section 6677).

Can I still get a refund if I file Form 3520-A late for 2023?

Form 3520-A is an information return that doesn't typically generate refunds, but filing may help establish basis for distributions reported on your personal return.

How do I get my account transcripts to see what IRS has on file?

Use IRS.gov's Get Transcript tool or call 1-800-908-9946 to request transcripts showing what returns and penalties are posted to your account.

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

Generally no, since Form 3520-A is a federal information return, though you should review if the trust information affects any state filings.

What if I can't afford the penalties assessed?

You can request an installment agreement using Form 9465 or Online Payment Agreement (IRS.gov), though interest continues until paid in full.

Can reasonable cause eliminate penalties for late Form 3520-A filing?

Yes, if you can demonstrate the failure was due to reasonable cause and not willful neglect, though foreign jurisdiction penalties or trustee reluctance aren't acceptable reasons (IRC Section 6677(d)).

How long do I have to file an amended Form 3520-A for 2023?

There's no specific deadline for amended information returns, but you should file corrections as soon as errors are discovered to minimize ongoing compliance issues.

‍