Introduction
Short answer: no. Form 3520 is filed separately from Form 1040 and is never stapled to the return, even when both relate to the same tax year. The IRS says plainly to file Form 3520 separately from your income tax return.
The confusion is understandable. The two forms can share an extension, and the same facts often touch both. For US persons living in Australia, a foreign inheritance, an offshore trust or a large gift from a relative can trigger both filings.
This guide covers who must file, which transactions trigger reporting, how Form 3520-A differs, and what to do if you missed a year.
Key Takeaways
- Form 3520 reports foreign trust activity and large foreign gifts or bequests.
- Reporting a gift or inheritance does not make it taxable income.
- Mail it separately; confirm current IRS instructions before submitting.
- Penalties differ by form part, so review any late filing part by part.
Does Form 3520 Get Filed with Form 1040?
Is Form 3520 attached to Form 1040?
No. Form 3520 is a standalone information return, not a schedule of Form 1040. You can prepare both at the same time, but each goes through its own submission route.
Current instructions say to mail it to the Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409. They accept e-signatures but do not provide an electronic filing option. Check the latest instructions before sending.
Why does it seem connected to Form 1040?
Three links cause the confusion:
- You use the same name, taxpayer ID and tax year.
- A valid Form 1040 extension also extends Form 3520, up to a limit.
- Some trust events flow through to your income reporting.
The extension cap matters. For calendar-year individuals, Form 3520 generally cannot be extended beyond 15 October. In the IRS's own example, a taxpayer abroad who takes a further discretionary extension of their income return to 15 December still gets no extra time on Form 3520.
Does Form 3520 create a tax bill?
For ordinary foreign gifts and bequests, no. The IRS treats these as excluded from gross income. Form 3520 simply discloses them.
Foreign trust distributions are different. Part III, Schedule C calculates an interest charge and tax on accumulation distributions, and the total carries to your income tax return. Income earned on inherited assets, and any covered expatriate rules, can also create separate obligations.
Who Needs to File Form 3520?
The US person test
Filing starts with the US person test. You qualify if you are a US citizen or resident, a domestic partnership or corporation, a non-foreign estate, or a trust meeting both US court and control tests. Moving to Australia does not change this. A US citizen in Sydney or Perth is still a US person.
Part I: Transfers to a foreign trust
Part I covers creating a foreign trust and direct or indirect transfers to one, including at death. It also covers certain related-party obligations. A transfer for full fair market value is treated differently, so analyse the facts before assuming a payment is reportable.
Part II: Ownership of a foreign trust
If you are treated as owner of any part of a foreign trust under the grantor-trust rules (IRC 671-679), you report it even if nothing was distributed that year. Gather these records:
- The trust deed and amendments
- Trustee powers and grantor details
- Ownership and beneficiary rights
- Any Form 3520-A or owner statements
Part III: Distributions and other benefits
Reportable benefits go beyond cash distributions:
- Credit-card charges paid, guaranteed or secured by the trust
- Cheques written from the trust's account
- Certain loans to US grantors or beneficiaries
- Free or discounted use of trust property
Distributions are reportable whether taxable or not. A complete Foreign Grantor Trust Beneficiary Statement from the trustee can support treating a distribution as coming directly from the owner. That treatment may keep a gift out of income.
Part IV: Large foreign gifts and bequests
For 2026, thresholds are:
| Donor | Threshold |
|---|---|
| Nonresident alien individual or foreign estate | More than US$100,000 |
| Foreign corporations or partnerships (purported gifts) | More than US$20,573 |
The corporate figure was US$20,116 for 2025. Amounts from related donors are aggregated, so several smaller gifts from one family can cross the line.
Salary, business income, genuine loans and transfers from US persons are separate categories, each needing its own analysis. A foreign trust receipt that fits both Parts III and IV is reported only in Part III.
Form 3520 vs. Form 1040, Form 3520-A, and Other Forms
Form 3520 compared with Form 1040
Form 1040 reports income, deductions, credits and tax. Form 3520 discloses foreign gifts, trust transfers, ownership and distributions. One event can touch both: a taxable trust distribution appears as income on Form 1040 while the trust event itself is disclosed on Form 3520.
Form 3520 compared with Form 3520-A
Form 3520-A is the annual information return for a foreign trust with a US owner. The trustee files it, but each US owner must ensure it is filed.
- Deadline: 15 March for calendar-year trusts, extendable six months with Form 7004. A Form 1040 extension does not extend it.
- If the trustee does not file: the US owner files a substitute Form 3520-A with Form 3520 by the Form 3520 deadline, including the owner and beneficiary statements. The owner signs it.
Form 3520 vs. FBAR, Form 8938 and Form 708
| Form | What it covers |
|---|---|
| FBAR (FinCEN 114) | Foreign financial accounts, filed electronically with FinCEN |
| Form 8938 | Specified foreign financial assets, attached to the tax return |
| Form 708 | Tax on gifts and bequests from covered expatriates |
Form 3520 replaces none of these. The same asset can trigger several filings, each with its own tests and deadlines. Timely Form 3520 reporting can excuse duplicate asset detail on Form 8938, but not the Form 8938 itself.
When and How to File Form 3520 Separately
Deadlines and extensions
| Situation | Deadline |
|---|---|
| General (calendar year) | 15 April |
| Qualifying individual abroad | Automatic extension to 15 June |
| With Form 4868 | Up to 15 October |
A US citizen or resident whose tax home and post of duty are outside the United States and Puerto Rico can claim the automatic extension, with a statement attached. Living in Australia does not by itself meet the tax-home and post-of-duty test.
The Form 4868 extension runs to 15 October, not six months beyond June. Weekend and holiday due dates roll forward. An extension postpones filing; it never removes the obligation.
Complete only the relevant parts
A taxpayer reporting only a foreign gift generally completes the identifying section and Part IV. Trust matters need other parts and schedules. File a separate Form 3520 for each foreign trust. Use the current form and instructions, and report in US dollars using the exchange rate when the item was received, paid or accrued.
Gather records and preserve proof
Collect:
- Bank statements and transfer confirmations
- Gift letters and estate documents
- Valuations and trust deeds
- Trustee statements and loan agreements
- Prior international information returns
You may not need to attach all of these, but keep them while they remain relevant to federal tax administration. Keep a signed copy of the filing and trackable, dated proof of delivery, separate from your Form 1040 package. Confirm the mailing address and signature rules before sending.
Penalties, Late Filing, and Reasonable Cause
How penalties are calculated
Penalties depend on the part, not the tax owed:
| Failure | Initial penalty |
|---|---|
| Part I | Greater of US$10,000 or 35% of gross value transferred |
| Part II (ownership) | Greater of US$10,000 or 5% |
| Part III | Greater of US$10,000 or 35% of unreported distributions |
| Form 3520-A (US owner) | Greater of US$10,000 or 5% of trust portion owned |
| Part IV (gifts) | 5% of the gift per month, capped at 25% |
Under IRC section 6677, a further US$10,000 applies per 30-day period once non-compliance continues more than 90 days after an IRS notice.
Filing is still required when no tax is due
Form 3520 is an information return. A tax-free inheritance can still create a filing duty and late-filing exposure. Separate income, estate, gift or expatriate rules may apply on top.
What to do after missing a filing
- Identify the missing tax year and form part.
- Gather source documents.
- Review related filings such as FBAR and Form 8938.
- Prepare the delinquent return under current IRS procedures.
- Attach a reasonable-cause statement and mark the first page "Reasonable Cause Statement attached."
The IRS's delinquent filing procedures are open to taxpayers who are not under examination and have not already been contacted by the IRS. For Forms 3520 and 3520-A, these statements are considered before penalty assessment, but relief is not guaranteed.
A strong statement is factual and specific. Ignorance alone rarely works, and neither does a foreign trustee's refusal or a foreign-law disclosure restriction.
When to get professional help
Seek help for:
- Foreign trust ownership or missing trustee records
- Multiple related donors
- Large non-cash inheritances
- Several unfiled years
- Possible covered expatriate status
- Overlapping FBAR and Form 8938 duties
VJM Global supports US taxpayers with cross-border tax compliance review and document coordination. Filing requirements and penalty relief always depend on your facts.
Frequently Asked Questions
Do I file Form 3520 with my tax return?
No. It is filed separately from Form 1040, even when due around the same time or covered by the same extension.
When do I fill out Form 3520?
For the tax year in which the foreign trust event, gift, inheritance or other reportable transaction occurred. Follow the current IRS instructions.
Who needs to report on Form 3520?
US persons with foreign trust transfers, ownership or distributions, or foreign gifts and bequests above the current-year thresholds.
What is the penalty for not filing Form 3520?
It varies by part. Trust penalties start at the greater of US$10,000 or 35% or 5%, while gifts face 5% monthly up to 25%. Reasonable cause relief needs a fact-specific review.
What is the difference between Forms 3520 and 3520-A?
Form 3520 is the US person's report of events. Form 3520-A is the foreign trust's annual return. A substitute 3520-A accompanies the owner's Form 3520 if the trust fails to file.
What is considered a foreign trust?
Any trust that fails either the US court test or the US control test. Review the governing documents and administration, not just where the bank account sits.
