2023 Form 3520 Deadline in 2024 | Foreign Trust Tax Lawyer & Attorney

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Form 3520 is one of the most important US international information returns. Due to its severe penalty structure, it is important to file it timely. In this brief essay, I will discuss the tax year 2023 Form 3520 deadline.

2023 Form 3520 Deadline: What is Form 3520

IRS Form 3520 is a US international information return used by the IRS to collect information related to foreign trusts, foreign gifts and foreign inheritance. In essence, Form 3520 collects four types of data from US taxpayers:

  • Certain transactions with foreign trusts;
  • Ownership of foreign trusts under the rules of sections 671 through 679;
  • Receipt of certain large gifts from foreign persons; and
  • Bequests from foreign persons

It is very important that you file Form 3520 timely, because late filing Form 3520 penalties can be very high. For example, a failure to timely disclose a reportable foreign gift on Form 3520 may result in a penalty as high as 25% of the value of the gift. Initial Form 3520 penalty for a failure to report a property transferred by a US transferor to a foreign trust may be as high as 35% of the gross value of the property.

2023 Form 3520 Deadline: Where to File

Form 3520 reporting is complicated by the fact that this form is not filed with a US tax return. Rather, for the tax year 2023, a Form 3520 with all required attachments should be mailed to the following address:

Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 84409

My recommendation is to mail your 2023 Form 3520 by US Certified Mail.

2023 Form 3520 Deadline: When to File

Generally, 2023 Form 3520 deadline will correspond to your US income tax return deadline. In other words, a US person must file his Form 3520 by and including the 15th day of the 4th month following the end of such person’s tax year for US income tax purposes. Same rule applies to Forms 3520 filed by an estate and on behalf of a US decedent. If the due date falls on a Saturday, Sunday, or legal holiday, file by the next day that is not a Saturday, Sunday, or legal holiday.

For individual taxpayers who reside in the United States, this usually means April 15. For example, your 2023 Form 3520 will be due on April 15, 2024.

Moreover, if you are a US citizen or resident and (a) you live outside of the United States and Puerto Rico and your place of business or post of duty is outside the United States and Puerto Rico, OR (b) you are in the military or naval service on duty outside of the United States and Puerto Rico, then your tax deadline will shift to the 15th day of the 6th month (i.e. June 15). In other words, if you satisfy either (a) or (b) above and you are either a US citizen or US resident, then your 2023 Form 3520 will be due on June 17, 2024 (because June 15 is a Saturday this year). You must include a statement with your 2023 Form 3520 showing that you are a U.S. citizen or resident who meets one of these conditions listed above.

Finally, if a US person is granted an extension of time to file an income tax return, the due date for filing Form 3520 shifts to the 15th day of the 10th month following the end of the US person’s tax year. In other words, if you are an individual who filed an extension on your US income tax return, then your 2023 Form 3520 will be due on October 15, 2024.

Contact Sherayzen Law Office for Professional Help With Your 2023 Form 3520 Deadline

If you are required to file a Form 3520 for the tax year 2023 (whether because you are an owner or a beneficiary of a foreign trust, you received a foreign gift or you received a foreign inheritance), contact Sherayzen Law Office for professional help. We have successfully helped US taxpayers around the world with their Form 3520 compliance, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

2023 Form 5471 Deadline in 2024 | International Tax Lawyer & Attorney

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IRS Form 5471 is one of the most important US international information returns. In this brief essay, I will discuss the tax year 2023 Form 5471 deadline in the calendar year 2024.

2023 Form 5471 Deadline: What is Form 5471

Form 5471 is a US international information return. In general, the IRS uses Form 5471 to collect information about certain US persons who are officers, directors, or shareholders in certain foreign corporations. These US persons, in turn, use Form 5471 to satisfy the reporting requirements of the IRC (Internal Revenue Code) §§965, 6038 and 6046 as well as related regulations. In other words, US taxpayers utilize Form 5471 to comply with their reporting obligations concerning their ownership of and transactions with a foreign corporation.

Form 5471, however, is more than just an international information return. It also contains the relevant schedules related to income recognition by US owners of foreign corporations through the operation of anti-deferral tax regimes such as Subpart F rules, 965 tax and GILTI tax.

2023 Form 5471 Deadline: Who Must File It

Determining whether you are required to file a Form 5471 and which schedules you must attach to it may also be very complicated. As a result of the 2017 tax reform, Form 5471 now sports a total of five categories of required filers; two of these categories contain three sub-categories. In other words, the instructions to Form 5471 describe now a total of nine categories of filers!

Once you determine that you fall into one of these categories, you must carefully determine which schedules, statements and attachments you must complete in order to fully comply with your Form 5471 obligations.

I should also note that a separate Form 5471 is required for each applicable foreign corporation. This is the case even if one foreign corporation owns the other; there is no consolidated group filing under Form 5471.

2023 Form 5471 Deadline: Complexity

Form 5471 is incredibly complex. It forces its filers to convert foreign financial statements to US GAAP. It further requires reporting of an astounding range of transactions between a foreign corporation and its US owners as well as the affiliates of US owners. Finally, as it was already mentioned above, US taxpayers use Form 5471 schedules to calculate the income that they must recognize under the various anti-deferral tax regimes.

Thus, completing a Form 5471 may require a significant effort and a lot of time. This is why you need plan well ahead to make sure that you file your Form 5471 timely.

2023 Form 5471 Deadline: Penalties

A failure to timely file an accurate Form 5471 may result in imposition of large IRS penalties. Moreover, since Form 5471 is used to satisfy a variety of tax obligations, different penalties may be imposed under different IRC sections.

For example, a failure to file Form 5471 Schedule M may result in the imposition of a $10,000 penalty pursuant to §6038(a). A failure to file Form 5471 Schedule O is a violation of §6046 and the IRS may assess a separate section 6046 is subject to a $10,000 penalty for each reportable transaction.

2023 Form 5471 Deadline: When to File and Where

All filers (unless they fall under an exception) must attach their Forms 5471 to their income tax returns (if applicable, a partnership return or tax exempt organization return). Both, the income tax return and Form 5471 must be filed by the due date, including extensions, for that return.

In other words, if you are an individual filing Form 1040, your 2023 Form 5471 deadline is April 15, 2024. If you file an extension, the deadline will shift to October 15, 2024.

Contact Sherayzen Law Office for Professional Help With Your 2023 Form 5471 Deadline

If you are required to file a Form 5471 for the tax year 2023, contact Sherayzen Law Office for professional help. We have successfully helped US taxpayers around the world with their Form 5471 compliance, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

2023 FBAR Deadline in 2024 | FinCEN Form 114 International Tax Lawyer & Attorney

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The 2023 FBAR deadline is a critical deadline for US taxpayers this calendar year 2024. What makes FBAR so important are the draconian FBAR penalties which may be imposed on noncompliant taxpayers. Let’s discuss the 2023 FBAR deadline in more detail.

2023 FBAR Deadline: Background Information

The official name of FBAR is FinCEN Form 114, the Report of Foreign Bank and Financial Accounts. US Persons must file FBAR if they have a financial interest in or signatory or any other authority over foreign financial accounts if the highest aggregate value of these accounts is in excess of $10,000. FBARs must be timely e-filed separately from federal tax returns.

Failure to file an FBAR may result in the imposition of heavy FBAR penalties. The FBAR penalties vary from criminal penalties and willful penalties to non-willful penalties. You can find more details about FBAR penalties in this article.

2023 FBAR Deadline: Pre-2016 FBAR Deadline

For the years preceding 2016, US persons needed to file FBARs by June 30 of each year. For example, the 2013 FBAR was due on June 30, 2014. No filing extensions were allowed. The last FBAR that followed the June 30 deadline was the 2015 FBAR; its due date was June 30, 2016. .

2023 FBAR Deadline: Changes to FBAR Deadline Starting with the 2016 FBAR

For many years, the strange FBAR filing rules greatly confused US taxpayers. First of all, it was difficult to learn about the existence of the form. Second, many taxpayers simply missed the unusual FBAR filing deadline.

The US Congress took action in 2015 to alleviate this problem. As it usually happens, it did so when it passed a law that, on its surface, had nothing to do with FBARs. The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (the “Act”) changed the FBAR deadline starting with the 2016 FBAR. Section 2006(b)(11) of the Act requires the FBARs to be filed by the due date of that year’s tax return (i.e. usually April 15), not June 30.

Furthermore, the IRS granted to US taxpayers an automatic extension of the FBAR filing deadline to October 15. For now, taxpayers do not need to make any specific requests in order for an extension to be granted.

Thus, starting with the 2016 FBAR, the Act adjusted the FBAR due date to coincide with the federal income tax filing deadlines. This is the case even if federal law requires a different filing date. For example, in situations where the tax return due date falls on a Saturday, Sunday, or legal holiday, the IRS must delay the due date until the next business day; the FBAR deadline will follow suit and also shift to the next business day.

2023 FBAR Deadline

Based on the current law, for the vast majority of filers, the 2023 FBAR deadline will be April 15, 2024. However, the deadline is automatically extended to October 15, 2024.

The 2023 FBAR must be e-filed through the US Financial Crimes Enforcement Network’s (FinCEN) BSA E-filing system.

Contact Sherayzen Law Office for Professional Help With Your FBAR Compliance

If you have unreported foreign accounts, contact Sherayzen Law Office as soon as possible. Sherayzen Law Office is a leader in US international tax compliance and offshore voluntary disclosures. We have successfully helped hundreds of US taxpayers around the globe with their FBAR compliance and FBAR voluntary disclosures; and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

2023 IRS Quarterly Interest Rates on Overpayment/Underpayment of Tax

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The 2023 IRS quarterly interest rates IRS interest rates are relevant for a great variety of purposes. Let’s highlight three of its most important uses. First, these rates will determine the interest a taxpayer will get on any IRS refunds.

Second, the 2023 IRS quarterly interest rates will also be used to establish the interest to be added to any additional US tax liability on amended or audited tax returns. This also applies to the tax returns that were amended under the Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures.

Finally, the 2023 IRS quarterly interest rates will be used to calculate PFIC interest on any relevant §1291 PFIC tax. This PFIC interest will be reported on the relevant Form 8621 and ultimately Form 1040.

We at Sherayzen Law Office constantly deal with the IRS interest rates on overpayments and underpayments of tax. This is why we closely follow any changes in these IRS interest rates, including the 2023 IRS quarterly interest rates.

Below, I lay our the 2023 IRS quarterly interest rates for each quarter.

How the 2023 IRS quarterly Interest Rates Are Calculated

Internal Revenue Code (“IRC”) §6621 establishes the IRS interest rates on overpayments and underpayments of tax. Under §6621(a)(1), the overpayment rate is the sum of the federal short-term rate plus 3 percentage points for individuals and 2 percentage points in cases of a corporation. There is an exception to this rule: with respect to a corporate overpayment of tax exceeding $10,000 for a taxable period of time, the rate is the sum of the federal short-term rate plus one-half of a percentage point.

Under §6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points. Again, there is an exception for a large corporate underpayment: in such cases, §6621(c) requires the underpayment rate to be the sum of the relevant federal short-term rate plus 5 percentage points. The readers should see §6621(c) and §301.6621-3 of the Regulations on Procedure and Administration for the definition of a large corporate underpayment and for the rules for determining the applicable date.

2023 First Quarter IRS Interest Rates

On November 29, 2022, the IRS announced another increase in the IRS interest rates on overpayment and underpayment of tax.

This means that, effective on January 1, 2023 the First Quarter 2023 IRS interest rates are as follows:

seven (7) percent for overpayments (six (6) percent in the case of a corporation);

seven (7) percent for underpayments;

nine (9) percent for large corporate underpayments; and

four and a half (4.5) of a percent for the portion of a corporate underpayment exceeding $10,000.

2023 Second Quarter IRS Interest Rates

On February 13, 2023, the Internal Revenue Service announced that interest rates would remain the same for the calendar quarter beginning April 1, 2023.  In other words, the first quarter and the second quarter IRS interest rates were exactly the same.

2023 Third Quarter IRS Interest Rates

On May 22, 2023, the Internal Revenue Service announced that interest rates would remain the same for the calendar quarter beginning July 1, 2023.  In other words, the IRS interest rates remained the same for the first three quarters of 2023.

2023 Fourth Quarter IRS Interest Rates

On August 25, 2023, the Internal Revenue Service announced that it would increase the interest rates for the calendar quarter beginning October 1, 2023.

  • This means that, the Fourth Quarter 2023 IRS interest rates are as follows:
  • eight (8) percent for overpayments (seven (7) percent in the case of a corporation);
  • eight (8) percent for underpayments;
  • ten (10) percent for large corporate underpayments; and
  • five and a half (5.5) of a percent for the portion of a corporate underpayment exceeding $10,000.

Child FBAR Obligations | FBAR Tax Lawyer & Attorney

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Child FBAR filing obligations is a topic that comes up fairly often in my practice. In this short essay, I will discuss whether a child is required to file an FBAR and how it should be done.

Child FBAR Obligations: What is FBAR

FBAR is a common abbreviation for the Report of Foreign Bank and Financial Accounts, officially called FinCEN Form 114, Report of Foreign Bank and Financial Accounts (used to be TD F 90-22.1). This form is used by US persons to report to the IRS a financial interest in or signatory authority over foreign financial accounts.  This is one of the most important forms that US taxpayers need to file in order to comply with their US international tax law requirements. A failure to file an FBAR when required may result in an imposition of severe IRS penalties.

Child FBAR Obligations: No Age Limitations

All US Persons are potentially subject to the FBAR requirement with no regard for their age. In other words, minor children with foreign accounts that satisfy the FBAR filing threshold must file FBARs. Even a newborn infant may have to file an FBAR. See BSA Electronic Filing Requirements For Report of Foreign Bank and Financial Accounts (FinCEN Form 114), p. 6.

Child FBAR Obligations: How to file a Child’s FBAR

While a child is responsible for the filing of his own FBAR, the child’s parent, guardian or other legally responsible person must file the FBAR for the child if the child is unable to do it himself.  Id. In such cases, the responsible person, parent or guardian must sign the FBAR on behalf of the child as “Parent/Guardian filing for child”.

Contact Sherayzen Law Office for Professional Help with Your Child FBAR Obligations

Parents often overlook their children’s FBAR obligations.  Time and again, I discover that otherwise fully-compliant taxpayers completely neglected their children’s FBARs.

If your child has not filed the required FBARs or he needs help complying with his current FBAR obligations, contact Sherayzen Law Office for professional help.  We are a highly-experienced team of international tax professionals led by an international tax attorney, Mr. Eugene Sherayzen.  We have helped hundreds of people around the world with their FBAR obligations, including offshore voluntary disclosures, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!