3520 issues on the wane?

CdnAmerican · Post by **CdnAmerican** » Fri Sep 06, 2013 12:30 pm

Around this time last year, I recall being in the midst of significant issues with my 3520's, and finding lots of other posters in similar situations. I was struck that there seem to be essentially no such problems posted recently. I'm wondering what this could mean; is the IRS becoming less particular about these, or are USC's just getting better at submitting them on time? Does anyone have any info or thoughts about this?

MGeorge · Post by **MGeorge** » Sat Sep 07, 2013 8:14 am

Hi CdnAmerican,
I was wondering the same. I doubt that USCs in Canada are getting much "better" at filing 3520s. I came across an article that said something like "it is estimated that over 400,000 USCs in Canada should be filing 3520s, however, only 336 have been received". I then laughed and realized 2 out of the 336 were from me!

CdnAmerican · Post by **CdnAmerican** » Sat Sep 07, 2013 3:25 pm

336!? I have filed 22 in the past two years :) - though in fairness, only 5 for last year. We could probably account for most of those 336 just on this forum .. do you have a reference for that? That's really interesting if that many mistakes/omissions are being made. The fact that so few people are getting IRS letters nailing them for not filing these does not especially make you want to worry about being so diligent with these.

That said, once the taxpayers knows the responsibility, (s)he really should probably do it. Better safe than sorry later on ..

MGeorge · Post by **MGeorge** » Wed Sep 11, 2013 3:10 pm

I found the article:
http://www.moodystax.com/irs-says-hundr ... an-trusts/

The number mentioned in the article was 324, not 336. Not a big difference, I either remembered incorrectly, or it was another article I read - it was some time ago.

Still, it warms my heart to know how few people are filing these - and I bet you're right, most of the regulars are this site probably make up the bulk of the 324!

CdnAmerican · Post by **CdnAmerican** » Fri Sep 13, 2013 12:16 am

Wow, that is incredible. Even more amazing is the 49, count em, 49 3520-A's, as well as the average value of > $1M. Well I did my part, I brought that average waaay down ..

TimS · Post by **TimS** » Fri Sep 27, 2013 12:58 pm

I have a new client that has never filed a 3520/3520A for their RESP. Have you been going back to previous years and filing old ones or just filing the current ones going forward?
Do you know if an Registered Pension Plan is considered a foreign trust also?

CdnAmerican · Post by **CdnAmerican** » Sun Sep 29, 2013 7:45 pm

I backfiled mine in August 2011, along with a letter, going back 6 years. That adventure is detailed elsewhere in this forum; the short version is no fine after 14 months of letters back and forth, as well as 7 $10K fines which were eventually abated. I have no idea if that is common, but certainly others' experiences on this forum did not seem too far off from that.

If you choose to backfile, attach a letter to EACH Form you send, not just one letter. I learned this the hard way; they file forms individually by year/account, so one letter to describe a situation (even an identical one) for multiple accounts or years will not be sufficient.

This was a very unpleasant experience, but I now sleep without worry. You've basically described the difference between full disclosure and quiet disclosure, I think. Good luck!

MGeorge · Post by **MGeorge** » Mon Sep 30, 2013 2:11 pm

I backfiled for a TFSA - but the backfiled return was only late by about 6 months. I enclosed a letter, and filed 2 years worth of 3520 and 3520A. I did not receive a reply. My TFSA account was tiny (less than $2,000)

Best Regards.