IRS Instruction 3520-A – IRS Forms, Instructions, Pubs 2026 – U.S. persons who own or are treated as owners of foreign trusts face strict IRS reporting requirements. IRS Instruction 3520-A provides the official guidance for Form 3520-A, the Annual Information Return of Foreign Trust With a U.S. Owner.
Failing to comply can trigger severe penalties, often starting at $10,000 or more. This SEO-optimized guide explains everything from who must file and deadlines to step-by-step completion tips, penalties, and exceptions—based on the latest official IRS sources (Rev. December 2025 instructions for tax year 2025 and later).
Whether you’re a U.S. grantor, beneficiary, or advisor, understanding Form 3520-A helps ensure compliance and avoids costly IRS enforcement.
Table of Contents
- What Is Form 3520-A?
- Who Must File?
- Form 3520-A Due Date and Extensions
- How and Where to File
- Key Requirement: Appointing a U.S. Agent
- Step-by-Step Guide to Completing Form 3520-A
- Penalties for Non-Compliance
- Exceptions and Special Rules
- Common Mistakes to Avoid
- FAQ
- Get Professional Help
What Is Form 3520-A?
Form 3520-A is an annual information return filed by a foreign trust that has at least one U.S. owner. It reports details about:
- The trust itself
- Its U.S. beneficiaries
- Any U.S. person treated as an owner under the grantor trust rules (IRC sections 671–679)
The form includes an income statement, balance sheet, and separate statements furnished to U.S. owners and beneficiaries. Its purpose is to provide the IRS with transparency into foreign trusts where U.S. persons have ownership or beneficial interests.
Note: Form 3520-A is distinct from Form 3520 (which U.S. persons file for certain transactions with foreign trusts or large foreign gifts). However, they often interconnect.
Who Must File Form 3520-A?
The foreign trust technically files Form 3520-A. However, each U.S. person treated as an owner (under grantor trust rules) is responsible for ensuring the trust files a complete and timely return and furnishes the required annual statements to U.S. owners and beneficiaries.
If the foreign trust does not file, the U.S. owner must prepare and attach a substitute Form 3520-A to their own Form 3520 by the due date of the Form 3520.
U.S. owners typically include grantors or other persons with powers or interests that cause them to be treated as owners under sections 671–679.
Form 3520-A Due Date and Extensions
- Standard due date: The 15th day of the 3rd month after the end of the foreign trust’s tax year (e.g., March 15, 2026, for a calendar-year trust ending December 31, 2025).
- Substitute Form 3520-A (filed by the U.S. owner): Due on the same date as the U.S. owner’s Form 3520 (typically April 15 for individuals, or October 15 with extension).
Extension: File Form 7004 (using the trust’s EIN) by the original due date to get a 6-month extension. An extension of the owner’s income tax return does not automatically extend Form 3520-A.
Important: Form 3520-A cannot be e-filed. It must be mailed as a paper return.
How and Where to File ?
Mail the completed Form 3520-A to:
Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409
The trustee signs the original Form 3520-A. For a substitute form, the U.S. owner signs it. Paid preparers must include their PTIN and provide a copy to the filer.
All amounts must be reported in U.S. dollars, and information must be in English.
Key Requirement: Appointing a U.S. Agent
One of the most critical (and often overlooked) parts is appointing a U.S. agent in Part I. The U.S. agent must be authorized to act on the trust’s behalf for IRS examinations and summonses.
- If you appoint a U.S. agent (recommended), complete lines 3a–3g and attach the Authorization of U.S. Agent form (updated every 3 years or upon change).
- If no U.S. agent is appointed, you must attach detailed trust documents, summaries, and a chart showing ownership and relationships.
Failure to provide sufficient information here can render the form incomplete and trigger penalties.
Step-by-Step Guide to Completing Form 3520-A
Part I – General Information
- Enter the trust’s EIN (apply via IRS.gov/EIN if needed).
- Provide addresses and details.
- Appoint U.S. agent or attach documents.
- Indicate the number of owner and beneficiary statements prepared.
Part II – Foreign Trust Income Statement
Report income and expenses according to U.S. tax principles:
- Lines 1–7: Interest, dividends, capital gains, other income.
- Lines 8–16: Deductible expenses (interest, taxes, depreciation, trustee fees, etc.).
- Lines 17a–17c: Distributions (attach detailed statements with names, TINs, dates, and FMVs).
Part III – Foreign Trust Balance Sheet
Report assets and liabilities at fair market value (FMV). Include accumulated income.
Required Statements (furnish to recipients by the due date):
- Foreign Grantor Trust Owner Statement (pages 3–4 of instructions) → to U.S. owners.
- Foreign Grantor Trust Beneficiary Statement (page 5) → to U.S. beneficiaries (except owner-beneficiaries who receive the owner statement).
Include all required attachments for the form to be considered complete.
(Example of related IRS foreign trust reporting forms for context)
Penalties for Non-Compliance
Penalties under section 6677 are steep:
- Initial penalty: The greater of $10,000 or 5% of the gross value of the portion of the trust owned by the U.S. person.
- Additional penalties: For continued failure after IRS notification (up to the gross value of the trust portion).
- Other consequences: Increased accuracy-related penalties (up to 40%), criminal penalties for willful violations, and potential issues with statute of limitations.
Reasonable cause can waive penalties (but reliance on foreign law or reluctance of fiduciaries generally does not qualify). Filing a timely substitute Form 3520-A can help the U.S. owner avoid or reduce penalties.
Exceptions and Special Rules
- Certain Canadian retirement plans (RRSPs, RRIFs) under Rev. Proc. 2014-55.
- Eligible individuals’ transactions with certain tax-favored foreign retirement, medical, disability, or educational trusts under Rev. Proc. 2020-17.
- Reliance on proposed regulations (2024) for additional exemptions in some cases (apply consistently).
These do not affect FBAR (FinCEN Form 114) or Form 8938 requirements.
Common Mistakes to Avoid
- Missing the U.S. agent appointment or required attachments.
- Failing to furnish Owner/Beneficiary Statements to the proper parties.
- Reporting in foreign currency instead of USD.
- Assuming an income tax extension covers Form 3520-A.
- Not filing a substitute form when the trust doesn’t file.
FAQ
- Q: Can Form 3520-A be filed electronically?
A: No. It is a paper-only filing mailed to Ogden, UT. - Q: What if the foreign trustee refuses to file?
A: The U.S. owner must file a substitute Form 3520-A with their Form 3520 to avoid penalties. - Q: Is Form 3520-A required every year?
A: Yes, as long as the trust has a U.S. owner during the tax year. - Q: Do I need to file if the trust is small?
A: Generally yes, unless a specific exception (e.g., certain Canadian plans) applies. Size does not exempt reporting. - Q: Where can I download the latest instructions?
A: Directly from the IRS: https://www.irs.gov/pub/irs-pdf/i3520a.pdf.
Get Professional Help
Foreign trust reporting is highly complex and carries significant penalty risk. Consult a qualified U.S. tax professional experienced in international tax and foreign trusts—ideally a CPA or attorney familiar with IRC sections 671–679 and 6048.
This article is for informational purposes only and is not tax or legal advice. Tax rules can change; always verify with the latest IRS guidance and your advisor.
Download the official IRS Instructions for Form 3520-A here: https://www.irs.gov/pub/irs-pdf/i3520a.pdf
Stay compliant and protect your assets—proper reporting of foreign trusts is essential for U.S. taxpayers. If you have specific questions about your situation, seek personalized professional guidance.