When is Form 3520 due?

Form 3520 is due on the same date as your income tax return (typically April 15), including extensions. If you file an extension for your income tax return, the Form 3520 deadline is also extended.

What is the penalty for not filing Form 3520?

Penalties can be up to 35% of the gross value of trust distributions or the gross value of property transferred to a foreign trust. For failure to report foreign gifts, the penalty is 5% of the gift per month, up to 25%.

Foreign Income Reporting

Form 3520: Foreign Trust and Gift Reporting Guide

4:44By ForeignLLCTax

Key Takeaways

Form 3520 is an information return — not a tax bill — but carries penalties up to 35% for non-filing
Required for certain transactions with foreign trusts and receipt of large foreign gifts ($100,000+)
U.S. persons includes citizens, green card holders, and those meeting the substantial presence test
The form covers foreign trust transactions, foreign trust ownership, and large foreign gifts/bequests
Many people are unaware this form exists, creating significant compliance risk

What Is Form 3520?

Form 3520 is an information return that U.S. persons must file to report certain transactions involving foreign trusts and the receipt of large foreign gifts. It is not a tax bill — filing it does not directly result in a tax payment. However, the information disclosed may have tax consequences, and failure to file carries penalties of up to 35% of the amounts involved.

Who Counts as a U.S. Person?

For Form 3520 purposes, a U.S. person includes three categories: U.S. citizens, green card holders, and foreign nationals who meet the substantial presence test (meaning they have been in the U.S. long enough to be treated as residents for tax purposes). U.S. entities such as corporations, partnerships, and trusts formed under U.S. law also qualify as U.S. persons.

What the IRS Wants to Know

Form 3520 targets three main categories of transactions. First, transactions with foreign trusts — including creating or transferring property to a foreign trust, or receiving distributions from one. Second, ownership of foreign trusts — if you are treated as the owner of any part of a foreign trust. Third, receipt of large gifts or bequests from foreign persons — generally gifts exceeding $100,000 from a non-resident alien individual or foreign estate.

The IRS uses this information to ensure that U.S. persons are not using foreign trusts to hide income or assets, and that large gifts from foreign sources are properly reported.

foreign incomeFBARform 8938FATCAforeign reporting