3520-A Penalty

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MGeorge
Posts: 299
Joined: Fri Jun 22, 2012 9:23 am
Location: Canada

Re: 3520-A Penalty

Post by MGeorge » Fri Feb 15, 2019 12:08 pm

Hello Caninus,

One position you can take is that the instructions on the due date for filing a substitute 3520A attached to a 3520 are confusing. The trustee is responsible for filing 3520A by March 15 in order to relieve you of the obligation of completing a substitute 3520A and attaching it to the 3520.
Look at the questions on 3520 "Did the foreign trust file a 3520A?". Well, on March 14th, you can't answer this question. On March 16th you can - because you didn't get your trust owner statement and on the 16th of March, it's past due. So, only after March 15th do you know that YOU have to attach a substitute 3520A to the best of your ability.

I have always believed (but haven't tested it) that the 3520A, filled out as a substitute is merely an attachment to your 3520, due when your 1040 is due.

I would even resist using the term file a 3520A as a foreign trust owner. The trustee failed to file it, not you. When the trustee fails to file 3520A, you have to add 3520A-like information to your 3520. You could even do this in plain text not on form 3520A as a substitute. That is just my opinion and I am not an expert - far from it.

Best of luck!
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MGeorge is neither an accounting nor taxation professional.

CdnAmerican
Posts: 219
Joined: Tue Aug 30, 2011 12:15 am

Re: 3520-A Penalty

Post by CdnAmerican » Fri Feb 15, 2019 3:30 pm

Caninus - Thanks for the update! Yes, that is good news indeed. I suspect their delivery time for your cheque may not be terribly fast but will probably happen :) . It does seem like talking to a human is a good strategy when common sense is required, so I'm glad this worked out well for you!
Not a professional opinion.

aed11
Posts: 9
Joined: Sat Apr 19, 2014 11:37 pm

Re: 3520-A Penalty

Post by aed11 » Fri Mar 29, 2019 10:12 pm

I received a similar letter today for a $10k fine for "Failure to File Form 3520 (Part II)" It says "You failed to timely file Part II of Form 3520, or did not include complete and accurate information in Part II of Form 3520." I'm assuming this is a computer generated letter too because it is so vague. I have filed this form (and 3520-A which I assume they are referring to for "Part II") for my TFSA with my normal taxes by June 15 (for the automatic extension). I noticed that the 2017 form does not meniion anything about an extension of deadline for living out of the country, however the new 2018 form says the extension applies.

Can I ask what number you called to get to someone to talk to at the IRS? I am quite regretting having ever starting to file this form as the IRS is purposely vague on it, but now that I have started I obviously can never stop.

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