Mastering Form 3520: Reporting Foreign Trust Activities on U.S. Income Tax Returns

Recording of a 110-minute CPE webinar with Q&A

Conducted on Thursday, July 14, 2016

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide a deep exploration into IRS Form 3520, “Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts.” The panel will detail the events and transactions that require reporting, discuss filing obligations for beneficiaries of foreign non-grantor trusts, review the form in depth, and help navigate seemingly contradictory form instructions.


Form 3520, the Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts is one of the most complex tax reporting forms. The Service requires taxpayers who qualify as the “responsible party” for reporting a foreign “reportable event,” or who had a qualified obligation, owned any part of the assets held in a foreign trust, or received a distribution from a foreign trust, to file Form 3520, even if no transactions related to the trust occurred during the tax year.

The form instructions, and the regulations covering the relevant IRC Sections 671 through 679, are extremely complicated and in places seem to contradict other IRS forms or rules. Indeed, the IRS estimates that the average time required to complete Form 3520 exceeds six hours, not including recordkeeping.

Further, extremely steep penalties apply for failure to correctly and timely file Form 3520, including a base penalty of 35% of the value of the reportable event. While the statute provides for reasonable cause relief, the provisions to claim that relief are complex and burdensome for taxpayers and advisers alike.

Listen as our experienced panel of expert practitioners provides a deep dive into the filing requirements and specific sections of Form 3520, along with a discussion of penalties and relief provisions, to aid you in keeping clients with foreign trust holdings compliant with IRS rules.



  1. Reporting duties of “owners” and “responsible parties”
  2. “Reportable events”
  3. Navigating Form 3520
    1. Obligations
    2. Gratuitous transfers
    3. Qualified obligations
    4. Distributions and calculations
    5. Gifts and bequests
    6. Other form items
  4. Penalties for failure to file and relief provisions


The panel will discuss these and other critical questions:

  • What “reportable events” trigger a Form 3520 filing requirement?
  • What info must be reported? When is the 3520 due? Where is the form filed?
  • What is the overlap between Form 3520 and other foreign information reporting requirements, such as Forms 5471, 8865, 8621 and Schedule B?
  • What are the filing requirements for the U.S. beneficiary of a foreign non-grantor trust?
  • What are the penalties, and relief provisions, for failure to file a Form 3520?


Lipoff, Lawrence
Lawrence M. Lipoff, CPA, TEP, CEBS

With more than 30 years of experience, Mr. Lipoff specializes in the delivery of domestic and international private...  |  Read More

Mehany, Dianne
Dianne C. Mehany

Caplin & Drysdale

Ms. Mehany's practice focuses on international tax planning and controversies, including inbound and outbound tax...  |  Read More

Robinson, Morris N.
Morris N. Robinson, Esq., CPA, LL.M.

Managing Director
M. Robinson & Co.

Mr. Robinson is an experienced tax lawyer and CPA with over 30 years of tax-law experience. Mr. Robinson and his team...  |  Read More

Patricia Weisgerber, Esq., LL.M.
Patricia Weisgerber, Esq., LL.M.

M. Robinson & Co.

Ms. Weisgerber's practice areas include federal, state and international tax law. Her experience in international...  |  Read More

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