Foreign Trusts: Form 3520 and Form 3520-A

Id. [...]notwithstanding the identity of the creators, an arrangement will be treated as an ordinary trust "if it can be shown that the purpose of the arrangement is to vest in trustees responsibility for the protection and conservation of property for beneficiaries who cannot share in the disc...

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Bibliographic Details
Published in:Probate and Property 2013-07, Vol.27 (4), p.56
Main Authors: Kayan, Marianne R, Weyenberg, Ashley A
Format: Article
Language:English
Subjects:
Advisors
Beneficiaries
Compliance
Decision making
Disclosure
Failure
Fines & penalties
Foreign trusts
Income taxes
Information returns
Internal Revenue Code
Investment advisors
Reporting requirements
Trustees
Trusts
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Summary:Id. [...]notwithstanding the identity of the creators, an arrangement will be treated as an ordinary trust "if it can be shown that the purpose of the arrangement is to vest in trustees responsibility for the protection and conservation of property for beneficiaries who cannot share in the discharge of responsibility . . . , are not associates in a joint enterprise," and the beneficiaries do no more than accept the benefits of the trust. The CCA confirms the more lenient filing deadline for Form 3520-A, while also providing an example of how the IRS imposed penalties on an estate for the decedent's, and later the executor's, failure to properly file the Forms 3520 and 3520-A. Because significant penalties accompany the failure to file foreign trust informational returns, if an executor becomes aware of the delinquency of any returns attributable to the decedent or the decedent's estate, he or she should consult competent professional advisors who are familiar with the IRS processes and penalties.
ISSN:0164-0372
2163-0135