The Purpose of Form 3520
What is the Purpose of Form 3520? The purpose of Form3520IRS.com is to provide clarity and guidance on matters involving the Form 3520 and Form 3520-A. Oftentimes, when a person learns about the IRS Form 3520, they have many questions. We want to be able to provide those answers the best we can, without overwhelming you.
Our main website, Golding & Golding has a vast international tax law library, and sometimes taxpayers can get (understandably) lost trying to find the answer to a specific question.
Today’s specific question is simply: What is the Purpose of the Form 3520?
Reporting Foreign Gifts & Trust on Form 3520
Form 3520 is not a tax form. Rather, it is what is referred to as an “international information return.”
The purpose of this form is to provide the IRS information regarding various transactions involving Foreign Gifts and Foreign Trusts.
*Foreign Gift reporting also includes Foreign Inheritances.
When a person receives a gift from a Foreign Person, it is not taxable solely as a result of receiving the gift. But, in the future when the U.S. person passes away, and depending on the Gift and Estate Tax Exclusion amount at the time, it may lead to estate tax.
Future Earned Income
While the foreign gift is not taxable, any future income generated from gift after receipt by the U.S. Person may be taxable, and the IRS wants to know about it.
Foreign Accounts Compliance
When a person receives a gift or inheritance and it includes foreign accounts, assets, or investments, there may be reporting compliance requirements. The failure to properly report gifted or inherited accounts may lead to offshore penalties.
Offshore Trust Fraud
The IRS is skeptical about foreign trusts, since these types of trusts are oftentimes used to hide or shelter income.
Foreign Gift, Trust, and Inheritance Tax Specialist Team
Our firm specializes exclusively in international tax, and specifically IRS offshore disclosure, including help clients with late reporting of Forms 3520 and 3520-A.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe. Our attorneys have worked with thousands of clients on offshore disclosure matters, including FATCA & FBAR.
Each case is led by a Board-Certified Tax Law Specialist with 20-years experience, and the entire matter (tax and legal) is handled by our team, in-house.
*Please beware of copycat tax and law firms misleading the public about their credentials and experience.
Less than 1% of Tax Attorneys Nationwide Are Certified Specialists
Our lead attorney is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.
Recent Case Highlights
- We represented a client in an 8-figure disclosure that spanned 7 countries.
- We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
- We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
- We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
- We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.
How to Hire Experienced Offshore Counsel?
Generally, experienced attorneys in this field will have the following credentials/experience:
- 20-years experience as a practicing attorney
- Extensive litigation, high-stakes audit and trial experience
- Board Certified Tax Law Specialist credential
- Master’s of Tax Law (LL.M.)
- Dually Licensed as an EA (Enrolled Agent) or CPA
Interested in Learning More about our Firm?
No matter where in the world you reside, our international tax team can get you IRS offshore compliant.
We specialize in FBAR and FATCA. Contact our firm today for assistance with getting compliant.