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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Wednesday, May 8, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00
CPE
ALL

This course will provide a practical guide to U.S. tax reporting obligations of U.S. beneficiaries of foreign trusts and non-grantor trusts, including filing Form 3520. The panel will explain the circumstances, events, and transactions that trigger the requirement to file Form 3520. The panel will provide an in-depth review of Form 3520 and discuss distribution planning for foreign trusts with U.S. beneficiaries.

Faculty

Lawrence M. Lipoff
Director
CohnReznick LLP

With more than 30 years of experience, Mr. Lipoff specializes in the delivery of domestic and international private client services to enable high-net-worth individuals and families to maximize their new or generational wealth. He provides strategic advice to his clients and their closely held businesses in the areas of income tax planning and compliance, estate planning and administration services, as well as family structure consulting. Through many years in practice, he synthesized the work of various related professionals, and their firms integrate several planning strategies into solutions that maximize value. Mr. Lipoff is a frequent lecturer and author of articles published through professional forums on topics including domestic and international - estate planning and fiduciary income taxation including constructive attribution rules for foreign trusts, Forms 3520 & 3520-A, Graegin Loans, business succession, generation-skipping transfers, Chapter 14 and carried interest estate planning for private investment fund principals, preferred freeze partnerships, and private placement life insurance.

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Christiana M. Lazo
Partner
Proskauer Rose, LLP

Ms. Lazo’s practice consists of representing ultra-high net worth individuals, their family offices, and closely held businesses in developing and implementing sophisticated domestic and international tax and estate plans. She has significant experience counseling global clients on inbound and outbound planning, particularly advising families with members in multiple jurisdictions on wealth transfers and on tax-efficient investment and business ownership structures.

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Jack R. Brister
Managing Member
International Wealth Tax Advisors, LLC

Mr. Brister specializes in U.S. tax planning and compliance for non-U.S. families with international wealth and asset protection structures which include foreign trusts, estates and foundations that have a U.S. connection, as well as foreign companies wanting to do business in the U.S. He also specializes in foreign investment in U.S. real property, and other U.S. assets, pre-immigration tax planning, U.S. expatriation matters, U.S. persons in receipt of foreign gifts and inheritances, foreign accounts and assets compliance, offshore voluntary disclosures, FATCA registration, executives working and living abroad and annual reporting. He has been widely published, in addition to speaking at numerous international engagements.

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Description

Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts, presents significant complexity for beneficiaries of foreign trusts. Even if no transactions related to the trust occurred during the tax year, the IRS requires taxpayers who owned any part of the assets held in a foreign trust, received a distribution from a foreign trust, or who qualify as the responsible party for reporting a foreign "reportable event," to file Form 3520.

Tax advisers preparing Form 3520 must also contend with the special rules governing U.S. tax treatment of foreign trusts. Distributable net income (DNI) calculations are different for foreign trusts than domestic trusts, and U.S. tax rules distinguish the taxation of distributions made from DNI vs. UNI with the latter's distributions subject to harsh tax consequences for beneficiaries in the form of "throwback rules." Unless the current DNI is distributed within 65 days of the tax year's end, the "throwback rules" require the DNI to be reclassified as UNI rather than being treated as an addition to the trust corpus.

It is recommended that trust advisers serving U.S. beneficiaries or owners of foreign trusts begin calculating DNI earlier in the tax year to ensure that the trust has sufficient liquidity to meet distribution requirements and avoid the imposition of the throwback tax. Listen and learn as our panel of expert practitioners provides a deep dive into the filing requirements and specific sections of Form 3520, along with a discussion of foreign trust compliance.

Listen as our panel provides an in-depth look into the filing requirements and specific sections of Form 3520, along with a discussion of foreign trust compliance.

Outline

  1. Determining owners and responsible parties
  2. Reportable events
    1. Distributions
    2. Qualified Obligations
    3. Obligations
    4. Gifts and bequests
    5. Other form items
  3. DNI calculations and distribution strategies
  4. Completing the form
  5. Throwback tax
    1. 65-day rule
    2. Form 4970
  6. IRC Section 6677 penalties for failure to file and relief provisions
    1. Calculation of penalties
    2. Section 6048 special rules
    3. Reasonable cause exceptions

Benefits

The panel will discuss these and other key issues:

  • What reportable events trigger a Form 3520 filing requirement?
  • What is the overlap between Form 3520 and other foreign information reporting requirements such as Forms 5471, 8865, 8621, and Schedule B?
  • What are the filing requirements for the U.S. beneficiary of a foreign non-grantor trust?
  • What are the penalties and relief provisions for failure to file a Form 3520 or Form 3520-A?
  • What are the processes for establishing a reasonable cause exception for penalty abatement?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Determine which taxpayers are subject to Form 3520 reporting requirements
  • Discern which transfers and ownership structures to report
  • Identify when to report qualified obligations
  • Ascertain penalties for failure to report Form 3520 gifts

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules for U.S. taxpayers owning or receiving payments from non-US retirement accounts; supervisory authority over other preparers/accountants. Specific knowledge and understanding of basic reporting requirements for U.S. taxpayers with foreign retirement account interests; familiarity with FBAR, FATCA and For 3520 filings

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).