logo
IRS Turns Focus On Foreign Trust Reporting Including Form 3520-A

IRS Turns Focus On Foreign Trust Reporting Including Form 3520-A

Forbes10 hours ago
IRS Form 3520-A
In recent months, the IRS has revised a public announcement and issued an LB&I Practice Unit concerning information returns and penalties associated with foreign trusts. The public announcement attempts to educate taxpayers of the Form 3520-A reporting obligation, and the Practice Unit seeks to educate IRS examiners of the Form 3520-A penalties. Both are discussed more below.
Form 3520-A Public Announcement
The announcement, revised April 15, 2025, provides a summary of the Form 3520-A reporting requirement, including the 'who, when, and where' related to the information return.
Form 3520-A LB&I Practice Unit
The IRS released the LB&I Practice Unit on May 1, 2025. Although the Practice Unit relates to both Form 3520 and Form 3520-A penalties, the below summary taken from the Practice Unit focuses solely on the Form 3520-A penalties.
Compliance Options
U.S. persons with missed Form 3520-A filings have options. In many instances, these taxpayers may qualify for relief under the IRS' Streamlined Filing Compliance Procedures (SFCP). To qualify, however, the taxpayer must have unreported foreign income from certain reportable foreign assets and demonstrate non-willfulness, among other requirements.
Taxpayers who fail to meet the requirements of the SFCP should consider the IRS' Voluntary Disclosure Program (VDP). Although the VDP has higher penalties and a longer lookback period compared to the SFCP, the VDP can reduce criminal risks, particularly compared to another compliance option known as a 'quiet disclosure.'
Finally, the Delinquent International Information Return Submission Procedures (DIIRS) is another option for U.S. persons who missed a Form 3520-A filing deadline and who do not qualify for the SFCP. Under these procedures, the taxpayer submits the late Form 3520-A with a reasonable cause statement. Under more recent guidance, the IRS no longer assesses an automatic late-filing penalty in these circumstances—instead, the agency reviews the reasonable cause determination to decide whether the penalty should be imposed. If the IRS imposes the penalty, even with the reasonable cause statement, the taxpayer may request review of the penalty determination with the IRS Independent Office of Appeals.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Why the GOP doesn't want you biking to work but will spend millions on a ‘heroes' sculpture garden
Why the GOP doesn't want you biking to work but will spend millions on a ‘heroes' sculpture garden

Yahoo

time10 minutes ago

  • Yahoo

Why the GOP doesn't want you biking to work but will spend millions on a ‘heroes' sculpture garden

A version of this story appeared in the CNN Business Nightcap newsletter. To get it in your inbox, sign up for free here. The Republican tax and spending bill is 900 pages of barely readable text full of complicated proposals that would, among many other things, slash the social safety net in America and lavish wealthy households with tax cuts. It is reviled on the left for hurting poor people and reviled on the far-right for not going far enough to cut spending. It's a hard pill to swallow for lawmakers across the political spectrum, which is why it's loaded up with super niche provisions that reflect some of the ideological contradictions within the Trump coalition. Like, killing the $2 billion 'qualified bicycle commuting reimbursement,' a relatively cheap incentive that, at least in theory, would align with the 'Make American Healthy Again' sect of Trump loyalists. The benefit was suspended in Trump's first term, but before then it allowed employers to offer workers a $20 a month tax-free reimbursement for biking to work. (Healthy! Good for the environment!) The GOP package in Congress would eliminate it for good. There's also $40 million earmarked for a 'National Garden of American Heroes' — 250 life-size sculptures that Trump wants completed in the next 12 months ahead of the nation's 250th anniversary. The ambitious project is a longtime Trump vision that, according to Politico, will be almost impossible to pull off in time without the help of foundries in China. Incidentally, the money for the sculpture garden would be directed to the National Endowment for the Humanities, a government agency that Trump has been trying to eliminate since his first term. The NEH recently laid off 2/3 of its staff, canceled more than 1,000 grants and is marshaling its remaining resources to focus on next year's anniversary. These seemingly arbitrary small items are essentially sweeteners to win over lawmakers who might quibble with the broader thrust of the legislation. 'Now that we essentially do policy-making at a large scale, through these huge mega-bills in reconciliation… you have to stuff everything that you possibly can to try to get your entire coalition on board, particularly within the margins,' said Alex Jacquez, chief of policy and advocacy at Groundwork Collaborative, a progressive think tank. 'So that's where you see a lot of these, 'huh, where did that come from?' items.' The clearest example of that is the litany of carve-outs for the state of Alaska and its 740,000 residents, known by some critics as the Kodiak Kickback. (Fun fact: 'Alaska' shows up in the text of the Senate bill more than 20 times; other states, if they're mentioned at all, show up fewer than four times.) The reason for all the Alaska love is simple: As GOP leaders drummed up support, it became clear that Sen. Lisa Murkowski would be a holdout because of the bill's expanded Medicaid work restrictions and changes to federal food assistance programs. Over the weekend, staffers scrambled to rewrite key pieces of the bill to win her support, my CNN colleagues reported. As a result, Murkowski locked in several Alaska-specific breaks, including a tax deduction for meals served on fishing vessels, a special tax exemption for fishing villages in the western part of the state, and a five-fold expansion of a deduction for whaling boat captains. Like the commuter cycling reimbursement that the bill would eliminate, these aren't big-ticket items. But they illustrate the haphazard and at times punitive way government spending decisions get made. On the cycling benefit, Jacquez says it is likely just a target for Republicans who see it as a culture war issue — a 'green' activity that largely benefits people in cities who tend to vote for Democrats. You can see that dynamic play out in other provisions, too. Republicans have tried to shield some of their rural constituencies from the worst effects of the bill, Jacquez notes. There is a rural hospital bailout fund designed to blunt the impact of Medicaid cuts, for example. But that doesn't do anything to help urban hospitals in New York City, where some 4 million residents, nearly half the population, are enrolled in Medicaid. In the grand scheme of a $3.3 trillion spending package, $150 million for America's birthday might seem fine. 'But that's $150 million that's not going to be spent on food assistance,' Jacquez said. 'Or it's a billion dollars that's not going to be spent on Medicaid. When every cent allegedly matters, these things do add up.'

Pre-Prime Day Deal Slashes $151 Off Amazon's New Color Kindle
Pre-Prime Day Deal Slashes $151 Off Amazon's New Color Kindle

CNET

time14 minutes ago

  • CNET

Pre-Prime Day Deal Slashes $151 Off Amazon's New Color Kindle

It's time to finally ditch those paper books and upgrade to one of the best e-readers money can buy. The Kindle Colorsoft is the first color Kindle, and it's a great way to read books and comics alike. And as part of Amazon's early Prime Day extravaganza, the retailer is selling the Kindle Colorsoft Signature Edition with a wireless charger and a case for just $212 -- a huge $151 discount and considerably less than you'd normally pay for the Kindle alone. You don't need to enter any discount codes or clip any coupons to enjoy this deal, but you do need to be an Amazon Prime member to save. You can also trade in an old device, and you'll save an additional 20%. The Kindle Colorsoft Signature Edition comes with a large 7-inch color display and 32GB of storage, perfect for holding all of your reading material. Despite that new color screen, you'll get up to eight weeks of use between charges. Hey, did you know? CNET Deals texts are free, easy and save you money. When it does come time to charge, the included wireless charger makes it a cinch. All you have to do is place the Kindle Colorsoft on the dock, and it'll do its thing. This bundle also comes with a plant-based leather case included, with a couple of colors available for you to choose from. The case protects the Kindle Colorsoft when not in use and adds a little extra bulk to make it easier to hold when it is, too. Naturally, the Kindle Colorsoft is waterproof, so you can use it in the bath, and the auto-adjusting front light means you can always read no matter what the surrounding light is doing. Why this deal matters Reading is a great way to relax, and this is your chance to make the experience even more pleasurable at a discount. This is the latest iteration in a long line of Kindle devices, and it's better than ever. It's perfect for reading comics as well as books, yet it still has a massive battery life. Throw in the accessories, and this is a deal that's going to be hard to beat.

TGI Fridays hails ‘comeback' with new menu launch after UK chain rescued
TGI Fridays hails ‘comeback' with new menu launch after UK chain rescued

Yahoo

time14 minutes ago

  • Yahoo

TGI Fridays hails ‘comeback' with new menu launch after UK chain rescued

TGI Fridays has hailed a 'comeback' with a new menu and plans to revitalise restaurants after the chain secured a rescue deal last year but made a string of closures. The US-themed restaurant and cocktail bar said it had undergone a significant transformation since being bought out of administration in October. The comeback campaign, which bosses described as a 'full brand reset', will involve half of its dishes updated and 70% of the grill items reworked, incorporating new flavours and more customisation. It also plans to revive the brand's 'Americana' influence and theatre theme – with some locations reintroducing photo booths and candyfloss machines. TGI Fridays said it was launching a comeback offer to mark the relaunch and prompt more diners to come back. Diners who order from the menu across Independence Weekend – the US holiday celebrated between July 4-6 – will receive a voucher for a free return meal, valid on weekdays for the rest of the month. TGI Fridays first opened in New York in 1965 with a party-led theme and continues to operate a string of restaurants in the US. After its previous UK operator fell into administration, 51 restaurants were acquired by private equity firms Breal Capital and Calveton UK. While the deal secured a future for the chain on Britain's high streets, it led to the closure of 35 restaurants, resulting in about 1,000 staff being made redundant. TGI said it now operates 49 restaurants and has about 2,500 members of staff. Restructuring efforts since the takeover have resulted in a leaner and more streamlined business with a significant reduction in overhead costs, it said on Friday. It also highlighted an improvement in sales in recent months, since the start of 2025. Prior to the acquisition, TGI faced falling sales in the UK amid wider struggles for the casual dining sector, which has grappled with weaker consumer spending. Julie McEwan, chief executive of TGI Fridays UK, said: 'This is an exciting moment for TGI Fridays – a full brand reset that reinforces everything people have always loved about us. 'TGI Fridays has a rich heritage of bold flavour, high-energy hospitality and unforgettable celebrations – and we've gone back to those roots to bring that magic into a new era. 'Over the past eight months, we've restructured the business, invested in our incredible team, and rebuilt our offer around quality, value and experience.'

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store