Form 3520 vs Form 3520-A — What's the Difference and Do You Need Both?

A guide to foreign-trust and foreign-gift information returns

Forms 3520 and 3520-A serve different purposes. A U.S. person may need to report foreign-trust ownership, transfers, distributions or certain foreign gifts on Form 3520. A foreign trust with a U.S. owner generally also files Form 3520-A, and the owner is responsible for ensuring that the trust meets its reporting duties. Check the applicable exceptions before deciding which forms are required.

This guide compares the forms and highlights questions to resolve from your records and the current IRS instructions. For help evaluating your circumstances and a proposed engagement, see the Segal, Cohen & Landis, P.C. (SCL) team.

Table of Contents

• What Is Form 3520?
• What Is Form 3520-A?
• Side-by-Side Comparison Table
• When You Need Both Forms
• When You Need Only One
• The Substitute Form 3520-A
• Penalty Comparison
• Common Mistakes That Trigger Penalties
• Frequently Asked Questions
• Get Help From an International Tax Attorney

What Is Form 3520?

Form 3520 — Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts — reports certain trust transactions, ownership under the grantor trust rules and covered foreign gifts or bequests. U.S. owners can have an annual duty even without a transaction. Certain executors also have filing obligations.

The principal Form 3520 filing categories are listed below. Reporting exceptions can apply, including specified Canadian retirement plans and qualifying tax-favored foreign trusts under the applicable guidance. These exceptions do not automatically remove separate FBAR or Form 8938 duties.

• You are the responsible party for a reportable creation of or transfer to a foreign trust, or another covered Part I event or obligation; applicable exceptions must be checked.
• You are treated as a U.S. owner of any portion of a foreign trust under IRC sections 671–679 during the tax year (Part II), including years without trust transactions, unless an applicable reporting exception applies.
• You receive a reportable direct or indirect distribution from a foreign trust (Part III). Certain trust loans and uncompensated use of trust property can also trigger reporting.
• You receive more than $100,000 in gifts or bequests from a nonresident alien individual or foreign estate, including applicable related-person aggregation, or purported gifts from foreign corporations or partnerships above the separate aggregate threshold: $20,116 for 2025 and $20,573 for 2026 (Part IV). Qualifying direct tuition and medical payments are excluded; foreign-trust distributions follow separate rules.

Who files: The responsible U.S. person or executor under the applicable rule. U.S. persons include citizens and resident aliens, but also specified domestic entities, estates and trusts. Tax residency and trust classification require their own analysis; a foreign address or passport is not decisive.

When it is due: Generally the 15th day of the fourth month after the U.S. person’s tax year ends. For a 2025 calendar-year individual, that is April 15, 2026. A properly obtained income-tax filing extension generally extends Form 3520 to October 15 for a calendar-year filer, but no later discretionary income-tax extension carries it beyond that date. Qualifying overseas citizens or residents generally have until June 15 and must attach the required statement. Weekend and legal-holiday rules apply.

What Is Form 3520-A?

Form 3520-A — Annual Information Return of Foreign Trust With a U.S. Owner — is generally filed by the foreign trust, signed by its trustee. Each U.S. owner must ensure the required return and statements are furnished. If the trust does not file, the owner must follow the substitute-return procedure described below. Applicable reporting exceptions still matter.

Form 3520-A reports the trust’s financial statements, including:

• The trust’s balance sheet (assets, liabilities, net worth)
• The trust’s income statement (gross income, deductions, distributions)
• A Foreign Grantor Trust Owner Statement (provided to each U.S. owner)
• A Foreign Grantor Trust Beneficiary Statement (for each U.S. beneficiary who received a distribution)

Who files: The foreign trust, with the required trustee signature. If it fails to file, the U.S. owner completes and signs a substitute Form 3520-A and attaches it to the owner’s Form 3520 by the Form 3520 deadline.

Regular trust return deadline: The 15th day of the third month after the trust’s tax year ends. For a calendar-year trust’s 2025 return, March 15, 2026 falls on Sunday, so the deadline is March 16, 2026. A timely, properly completed Form 7004 using the trust’s EIN generally provides a six-month extension to September 15, 2026. The owner’s Form 4868 does not extend the trust’s regular Form 3520-A. A substitute return instead follows the owner’s Form 3520 deadline.

Side-by-Side Comparison: Form 3520 vs Form 3520-A

Feature	Form 3520	Form 3520-A
Full name	Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts	Annual Information Return of Foreign Trust With a U.S. Owner
Who files	The responsible U.S. person or executor, depending on the reporting category	The foreign trust; the U.S. owner must ensure filing or complete the required substitute
What it reports	Transfers to foreign trusts, ownership, distributions, large foreign gifts	The foreign trust’s financial statements — income, balance sheet, owner/beneficiary statements
Due date	Generally fourth-month day 15 after the U.S. person’s tax year; qualifying overseas extension or income-return extension may apply, generally no later than tenth-month day 15	Regular return: third-month day 15 after the trust’s tax year; separate Form 7004 generally adds 6 months. Substitute: owner’s Form 3520 deadline. Weekend/holiday rules apply
Filed with	IRS (filed separately from Form 1040; a required substitute Form 3520-A is attached to Form 3520)	IRS; required owner and beneficiary statements also go to the relevant U.S. recipients. A substitute is attached to the owner’s Form 3520
Penalty for late/non-filing	Trust transfers/distributions: generally greater of $10,000 or 35% of the relevant gross amount. Owner reporting: generally greater of $10,000 or 5% of the relevant year-end assets. Gifts: 5% monthly, up to 25%. Applicable limits and reasonable cause matter	Owner liable: generally greater of $10,000 or 5% of the year-end gross value of the U.S.-owned portion; continuation rules, statutory limits and reasonable cause apply

When You Need Both Forms

Absent an applicable exception, both forms generally apply when a U.S. person is treated as owning any portion of a foreign trust under IRC sections 671–679:

1. Form 3520-A: The foreign trust files its annual return and furnishes the required owner and beneficiary statements by its deadline, generally the 15th day of the third month after its tax year ends, taking account of extensions and weekend or holiday rules.
2. Form 3520 (Part II): The U.S. owner reports ownership by the owner’s applicable Form 3520 deadline. If the trust filed Form 3520-A, attach the Foreign Grantor Trust Owner Statement as instructed. If the trust did not file, complete and attach the substitute Form 3520-A.

The same owner may also need Part I for reportable transfers and Part III for distributions. Current instructions direct a U.S. owner receiving a distribution from a foreign grantor trust to complete lines 24 and 27 in Part III. Follow the rules for the particular transaction, including exceptions. File a separate Form 3520 for each foreign trust; a required substitute Form 3520-A is attached to the corresponding return.

When You Need Only One Form

Form 3520 Only (No Form 3520-A)

• Foreign gifts: A qualifying foreign gift or bequest above the relevant threshold is generally reported in Form 3520 Part IV. That receipt alone does not require Form 3520-A. Other tax or information-reporting obligations may still apply, and a foreign-trust distribution is a different category.
• One-time transfer to a foreign trust: You transferred property but are not the owner under grantor trust rules. You file Form 3520 Part I if required. Form 3520-A applies to a foreign trust with a U.S. owner; the transfer alone does not establish that requirement.
• Distribution from a non-grantor trust: You received a distribution but are not the owner. You file Form 3520 Part III if required. Form 3520-A is required for a foreign trust with a U.S. owner, not merely because it distributes to a U.S. beneficiary.

Does Form 3520-A Replace the Owner’s Form 3520?

A U.S. owner generally must report ownership in Form 3520 Part II even when no transaction occurs. A foreign trust with a U.S. owner generally also must file Form 3520-A, subject to applicable reporting exceptions; no transactions alone does not eliminate the ownership return.

The Substitute Form 3520-A: When the Foreign Trust Does Not File

The substitute procedure has its own deadline and signature requirements. It lets the U.S. owner address the trust’s failure to file, but it does not make accurate, complete reporting optional.

A trust may fail to file for many reasons. The U.S. owner should obtain copies of the filed return and required statements and confirm the filing, rather than assume the trustee completed it.

If the foreign trust does not file, the U.S. owner must follow the substitute procedure:

1. Complete a substitute Form 3520-A to the best of your ability under the instructions, including all required statements and attachments. Document requests for missing records and any unresolved gaps.
2. Check the “Substitute Form 3520-A” box, sign as the U.S. owner with the required identifying information, and attach it to Form 3520 by that return’s due date, including any applicable extension.
3. Provide the required Foreign Grantor Trust Owner and Beneficiary Statements to the relevant U.S. owners and beneficiaries by the owner’s Form 3520 due date.

The instructions permit a substitute completed to the best of the owner’s ability, but also state that only a complete return, including required attachments, is considered timely. Missing or incorrect information can still lead to penalties or adverse tax treatment. A general claim of good faith does not replace the filing requirements or establish reasonable cause.

Gather the trust instrument, amendments, ownership analysis, financial statements and distribution records. Explain factual limitations accurately and evaluate any required additional forms. For example, Form 8082 may be required when an owner did not receive an Owner Statement; filing it does not itself remove section 6677 penalties.

Penalty Comparison: Form 3520 vs Form 3520-A

Form 3520 Penalties

• Part I transfers: The initial section 6677 penalty is generally the greater of $10,000 or 35% of the gross value of property involved in the reportable event. Applicable statutory limits and reasonable cause must be considered.
• Part III distributions: The initial section 6677 penalty is generally the greater of $10,000 or 35% of the gross distributions subject to the reporting failure, with applicable limits and reasonable cause. Owner-reporting failures have a different 5% asset base.
• Part IV foreign gifts: Section 6039F generally imposes 5% of the gift’s value for each month the failure continues, up to 25%, unless reasonable cause applies. The IRS ended automatic assessment at filing for late Part IV gift reports, as announced in 2024; the statutory reporting duty and potential penalties remain.

For illustration, 35% of a reportable $500,000 trust distribution is $175,000. The actual penalty analysis must identify the failed reporting duty, the applicable base, any limits and reasonable cause; the calculation is not a prediction for every late return.

Form 3520-A Penalties

• Initial ownership-reporting penalty: The U.S. owner is generally liable for the greater of $10,000 or 5% of the gross value of the portion treated as owned at the end of the tax year. Late, incomplete or incorrect reporting can trigger it; applicable limits and reasonable cause remain relevant.
• Continuation: If the failure persists more than 90 days after the IRS mails its notice, section 6677 generally adds $10,000 for each 30-day period or fraction after that 90-day period. Once the IRS can determine the gross reportable amount, the statute requires reductions or refunds so aggregate penalties for that failure do not exceed that amount.

Section 6677 applies to the relevant trust-reporting failure. It does not authorize simply multiplying a penalty by the number of form names. Distinct transfer, ownership and distribution failures require separate analysis of the applicable duties, valuation bases, limits and relief.

Filing Mistakes to Avoid

Review the relevant notices, filing history, records, and deadlines before choosing a response. Evaluate professional assistance according to the facts, applicable law, and agreed scope of representation. Related resources: penalty abatement.

1. Reporting ownership without ensuring the trust return is filed: Form 3520 Part II does not replace the trust’s Form 3520-A. If the trust fails to file, the owner must complete the required substitute by the owner’s Form 3520 deadline. Otherwise, an ownership-reporting penalty may apply, subject to the applicable rules and relief.
2. Assuming the trustee filed: Obtain the return, required statements and filing records. The owner’s duty to ensure reporting remains even when the trustee handles preparation.
3. Using the wrong deadline or extension: The trust’s regular Form 3520-A generally follows a third-month deadline and its own Form 7004 extension. Form 3520 generally follows a fourth-month deadline, with applicable extensions. The substitute Form 3520-A follows the owner’s Form 3520 deadline. Check the relevant tax years and weekend or holiday adjustments.
4. Confusing gifts and trust distributions: Covered foreign gifts and bequests generally belong in Form 3520 Part IV. Foreign-trust distributions generally belong in Part III. Form 3520-A reports a foreign trust with a U.S. owner; it is not a replacement for either part.
5. Submitting an incomplete substitute without addressing gaps: Follow the instructions to the best of your ability and pursue missing information promptly. Neither trustee reluctance nor restrictions in the trust instrument establish reasonable cause by themselves. Incomplete reporting can still have consequences.

Frequently Asked Questions

Does Form 3520-A apply to foreign gifts?

An ordinary gift from a foreign individual, estate, corporation or partnership does not by itself require Form 3520-A. If the relevant reporting conditions are met, Form 3520 Part IV generally applies. A foreign-trust distribution is different, and other tax or information returns may be required.

Can I file Form 3520-A myself if the trustee will not cooperate?

Yes. If the foreign trust fails to file, the U.S. owner completes and signs a substitute, marks it as such, attaches it to Form 3520 by that form’s deadline, and supplies the required statements. Follow the detailed instructions and consider professional advice if the records or ownership analysis are uncertain. An incomplete filing is not automatically penalty-free.

If I file both forms late, do I get two separate penalties?

Possibly, but not automatically. Separate failures to report transfers, distributions or ownership can have different penalty bases. An ownership-reporting failure generally uses the greater of $10,000 or 5% of the relevant year-end assets; covered transfer or distribution failures generally use a 35% base with the $10,000 initial minimum. Apply the statute to each failure, including limits and reasonable cause. A correction route depends on the facts; voluntary disclosure is not an automatic solution for every late form.

Is there a reasonable cause exception?

Yes. Section 6677 excludes failures shown to result from reasonable cause and not willful neglect; section 6039F has a reasonable-cause exception for foreign-gift reporting. Reliance on advice requires a factual assessment and is not an automatic defense. Foreign secrecy-law penalties, a fiduciary’s reluctance or trust-document restrictions on disclosure are not reasonable cause under the applicable rules. Current IRS delinquent-return guidance says reasonable-cause statements for Forms 3520 and 3520-A are considered before assessment; mark the first page “Reasonable Cause Statement attached” when asserting it.

What about the Streamlined Filing Compliance Procedures?

The IRS Streamlined Filing Compliance Procedures may address qualifying non-willful offshore income and reporting failures. Eligibility requires more than a late form, including the applicable residency and filing conditions and a truthful certification; taxpayers under IRS civil examination or criminal investigation are ineligible. Compare those rules with the delinquent information return procedures. Neither route guarantees relief for every case.

Get Help From an International Tax Attorney

A practical filing plan distinguishes the owner’s return, the trust’s return, any substitute filing, required statements and each deadline. Keep records of who will prepare, sign and submit each item, and confirm that the required filings were completed.

Review the relevant notices, filing history, records, and deadlines before choosing a response. Evaluate professional assistance according to the facts, applicable law, and agreed scope of representation. Related resources: Segal, Cohen & Landis, P.C.; foreign trust reporting; penalty abatement.

Contact the firm to discuss your circumstances, the work needed and the terms of a possible engagement.