Ed Parsons CPA explaining IRS foreign trust reporting penalties and streamlined filing solutions for unfiled Form 3520-A compliance issues

Unreported PFICs? How Streamlined Filing May Help Reduce Brutal IRS Taxes and Penalties?

Leave a Comment / 2. Expat Taxes - Americans Abroad, FBAR, Streamlined Filing Compliance Procedure / By Edward Parsons, CPA

A Passive Foreign Investment Company (PFIC) includes most foreign mutual funds, ETFs, and investment funds held outside the U.S. If you sold or received distributions from one without filing Form 8621, the IRS applies the excess distribution method: all gains are taxed at the highest ordinary income rate of up to 37%, plus a compounding

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Form 3520-A Not Filed? The IRS Can Penalize 5% of Your Foreign Trust Value Every Year. Streamlined Filing May Help Avoid It.

If you are the U.S. owner of a foreign trust and Form 3520-A was never filed, the IRS penalty is 5% of the trust’s gross asset value at year-end. That responsibility falls on you personally, even if the foreign trustee was supposed to file. For a $400,000 trust, that is $20,000 per missed year. The