Has the IRS Assessed You a Penalty for a Late Filed Form 3520-A? You May Be Eligible For an Abatement of Penalties Assessed or a Refund of Penalties Paid
By: Lynn K. Ching Penalties For Failure to File Form 3520-A. A foreign trust (including a foreign retirement trust) with a U.S. owner must file Form 3520-A in order for the U.S. owner to satisfy its annual information reporting requirements under IRC 6048(b). Failure to timely file the Form 3520-A may result in significant penalties. However, U.S owners of certain foreign tax favored retirement trusts, and eligible foreign tax favored non-retirement trusts established almost exclusively to provide or to earn income for the provision of medical, disability, or educational benefits, may be eligible for an exemption and an abatement of penalties assessed or a refund of penalties paid. IRS Says Certain Tax Favored Retirement Trusts Are Exempt From 3520-A Reporting Under IRS Revenue Procedure 2020-17 (“Rev Proc 2020-17”), certain U.S.…