IRS Form 3520, Penalties, And Whether To Make A Protective Filing

By Caroline Rule
The CPA Journal
December 2017 Edition

Whether a taxpayer is required to file IRS Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, is frequently unclear, yet penalties for a failure to file can be severe. As a result, although there is no formal procedure for filing a protective Form 3520, practitioners should consider doing so when there is any uncertainty about whether a taxpayer must file the form.

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