Is a Singapore CPF Account Included on Forms 3520 & 3520-A?

Is a Singapore CPF Account Included on Forms 3520 & 3520-A?

Is Singapore CPF Reported on Form 3520 as Foreign Trust?

When it comes to international tax law, some aspects of foreign tax and reporting are more complicated than others. As to the IRS reporting requirements for overseas assets, accounts, investments, and income – foreign pension and retirement plans raise some of the most complex tax issues that a US person should be aware of when preparing and submitting tax forms.  Whether or not there is an international tax treaty between the United States and the foreign country and/or whether or not the foreign pension plan is considered qualified under the US tax code will impact the tax implications — and possibly the reporting requirements involved.  Since there is no tax treaty between the United States and Singapore, tax and reporting ambiguities involving the Central Provident Fund (CPF) are common. Let’s take a look at the analysis of whether a Singaporean CPF should be reported on forms 3520 and 3520-A as a foreign trust:

Forms 3520/3520-A & Singapore CPF

When it comes to reporting foreign pension plans, such as provident funds, an important concern is whether or not it should be reported as a Foreign Trust. While technically a foreign retirement plan was not designed to be a foreign trust the same way that an offshore trust in a country considered a tax haven is designed to be a foreign trust – for all intents and purposes a foreign pension plan is a foreign trust. There is the trust owner, the trustee of the trust, and the beneficiary/employee. Thus, from a baseline perspective, it would seem that a CPF should be reported on Forms 3520 and 3520-A as a foreign trust – but there is an exception that may apply under Revenue Procedure 2020-17.

Revenue Procedure 2020-17 & Singapore CPF

Even if technically, a CPF would qualify as a foreign pension plan that should otherwise be reported on forms 3520 and 3520-A — it may qualify for exemption in accordance with Revenue Procedure 2020-17 — which serves to eliminate the duplicative requirement for reporting of certain tax-deferred retirement plans and other tax-deferred non-retirement plans on forms 3520 and 3520-A when they are already being reported on other forms such as FBAR and Form 8938. In other words, the idea behind the revenue procedure is that these types of accounts are already required to be disclosed on the FBAR and Form 8938 and it would be overbearing to require a US Taxpayer to also disclose this same information (in addition much more in-depth trust information that the Taxpayer may not even be able to obtain) on the 3520 Forms. The one hitch in the giddy-up is that the revenue procedure does not identify specifically which foreign pension plans may be excepted under this revenue procedure — and therefore it is important that the taxpayer consults with an experienced Board-Certified Tax Law Specialist before making any proactive representation to the IRS regarding foreign assets, accounts, investments, or income.

Singapore CPF Reporting on FBAR and FATCA 8938

It is important to remember that whether or not Forms 3520 are required for the CPF — it is still reportable to the IRS and FinCEN. Two of the more common international reporting forms for reporting foreign pension plans are Form 8938 (FATCA) and FBAR (FinCEN Form 114).  The reason these types of foreign pension plans are reported for FBAR and FATCA is that they generally qualify as accounts being held at a foreign financial institution. 

International Tax Amnesty Programs for Singapore CPF Funds

The International Tax Amnesty Programs are programs developed by the Internal Revenue Service to assist Taxpayers who are already out of compliance for non-reporting, including CPF Provident Funds.

Some of the more common programs include:

• Voluntary Disclosure Program (VDP or “New” OVDP)

• Streamlined Domestic Offshore Procedures

• Streamlined Foreign Offshore Procedures

• Delinquency Procedures

• Reasonable Cause

Can I Just Start Filing Form 3520/3520-AThis Year Instead?

No, unless the current year is the first year you had a 3520/3520-A reporting requirement. If you had a prior year reporting requirement, but only begin to start filing in the current year (Filing Forward) it is illegal. In the world of offshore disclosure, this is referred to as a Quiet Disclosure. The IRS has warned taxpayers that if they get caught in a Quiet Disclosure situation, it may lead to willful penalties and even a criminal investigation by the IRS Special Agents.

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