Been Assessed Penalties by the IRS for Failing to Report a Foreign Pension Plan or Retirement Plan on Forms 3520 or 3520-A? Consider Requesting Relief Under Rev. Proc 2020-17
By Anthony Diosdi In an increasing global economy, workers are experiencing unprecedented mobility. As a result Americans and foreign nationals that become green card holders often participate in a pension or retirement plan in the foreign country. In most cases, the model resembles the one in the United States: Pretax money is contributed into retirement accounts where it accumulates tax-free until retirement. Unknown to many participants of these plans, the Internal Revenue Code often requires U.S. tax filers to disclose these plans on Internal Revenue Service (“IRS”) Form 3520 and/or Form 3520-A. The penalties for failing to disclose a foreign pension or foreign retirement plan on a Form 3520 and/or 3520-A can be substantial. Fairly recently, the IRS promulgated Rev. Proc. 2020-7. This revenue procedure provides an exemption from filing…