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what is IRS Form 3520 a when is it required how is one filed did in a tax software program tell you that you need to file IRS Form 3520 a have you heard vague rumors that you might need one hi Im Anthony parent of IRS medic in this video we will explain the most likely reason you need to file a Form 3528 what goes into the form and what to do if you are late and want to avoid steep penalties so first what is form 3520 a the IRS has myriad international reporting forms form 35 20 a is an annual information return of a foreign trust with a US owner now right there you might be wondering I dont have a domestic trust let alone foreign trust so how can I possibly have a form 3528 requirement the answer is that many foreign pensions and retirement plans are considered by the tax law to be foreign trusts 90 percent of the form 35 20 a forms that we file are all for foreign pensions so how can my foreign pension be a trust the law on Form 35 20 a could be a lot clearer in fact the instructions perform 35 20 a fail to even mention the words foreign pension or foreign retirement Schedule B mentions form 35 20 but completely fails to mention form 35 20 a so if you are unveiled youre in good company but this is what we do know the IRS often takes the position that a foreign pension is something known as a grantor trust or an employees trust the IRS is treatment is not entirely consistent which is why you may encounter different advice were not here to tell you what you can get away with but rather what could happen if you dont file a Form 35 20 a when required to do so so what will happen if you dont file a Form 35 20 a well you may get away with it but if you are detected by the IRS you also could be looking at a ten thousand dollar penalty for each form 3528 you did not file or if you filed or improperly filed the IRS can examine your entire 1040 indefinitely lets ride the IRS can audit you back to when you first started its retirement plan if a form 3528 was required but not filed even if that was 20 years ago now suppose an American moved to Australia in 1999 with contributions to a superannuation starting the same year if form 3528 was required or not filed or improperly filed that is 20 10000 penalties the IRS could assess for a total of two hundred thousand dollars in penalties alone in the last four years we have seen the Eyres begin to assess aggressive penalties so aggressive many taxpayers and tax professionals find themselves shocked and stunned yet there is another 3528 penalty the IRS can assess yet it is as of today its rare to see the IRS can actually impose a penalty of five percent of the retirement plans value so if you have say a Swiss pension valued at a million dollars you could be hit with additional penalties including a 50000 penalty for not following form 3528 this could be assessed multiple times but this type of penalty is not as common as it cant be assessed automatically unlike the 10000 form 3528 penalty which often can be...