Trusts and Estates Foreign Asset Reporting: FATCA, FBAR, Forms 3520, 5471, and 8865

This webinar will identify and explain the many required foreign reporting obligations, best practices for avoiding penalties, and how to resolve past noncompliance for trusts and estates. This webinar is for tax preparers, fiduciaries, and other professionals working with trusts and estates.

• Responsible parties
• FATCA and FBAR reporting requirements
• Forms 3520 and 3520-A
• Other reporting obligations
• Review of recent cases
• Handling past noncompliance
• Best practices for avoiding penalties

The panel will discuss these and other critical issues:

• Identifying willful and non-willful FBAR violations
• Uncovering reportable foreign assets held by trusts and estates
• Preparing Forms 3520 and 3520-A for foreign gifts and distributions received
• Handling past noncompliance

The government assesses and collects FBAR liability and penalties from beneficiaries and executors after a decedent's date of death and after assets are distributed. In United States v. Park, No. 16 C 10787 (N.D. Ill. May. 24, 2019), for example, the penalty assessed was over $3.5 million. Executors and tax professionals must include determining a taxpayer's compliance with foreign reporting obligations as a necessary step when reviewing, settling, or reporting a decedent's estate.

The penalty for non-willful FBAR violations is $10,000; this can be waived for reasonable cause. Willful non-filing, however, can result in penalties of $100,000 or 50% of the account balance, whichever is larger, as assessed in U.S. v. Park. Advisers must be able to identify and distinguish between a potentially willful or non-willful violation to accurately advise clients.

Form 1040, Schedule B, asks: "During 2019, did you receive a distribution from, or were you the grantor of, or transferor to, a foreign trust? If 'Yes,' you may have to file Form 3520. See instructions."

In addition to the FBAR, Form 3520 must be filed when a person receives a gift, inheritance, or distribution from a trust established by a foreign entity or individual. In addition to the 3520, owners of foreign trusts must file Forms 8938 and the FBAR. The trust itself must annually file for 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner. Parts II and III of the form require reporting a complete set of books for the entity, an income statement, and a balance sheet.

Listen as our panel of experts discusses identifying trusts and estates with foreign reporting obligations, reviews the current government initiative to assess penalties, explains the completion of required forms and outlines best practices for bringing taxpayers into compliance.

• Accountants, attorneys, financial advisors, and individuals who work with/are nonresidents.
• International Tax, Nonresident Alien, Nondomiciliary, United States trade or business, FDAP, branch profits tax, FIRPTA, income tax treaty, corporate-corporate, accumulation distribution, foreign trust

Patrick J McCormick is a partner with Culhane Meadows, a United States law firm with prominent experience and specialty in the international realm. Patrick practices exclusively in the area of international taxation; he has extensive experience in handling complex tax planning, structuring, and compliance issues for foreign businesses with United States operations, United States businesses with foreign operations, and individual taxpayers with international ties. He regularly works conjunctively with advisors both in the United States and abroad to assist with international tax issues faced by their clients.

Patrick is a prolific contributor to a multitude of tax journals and legal publications, including Tax Notes, Law360, the Journal of Taxation, and Tax Notes International. He is an active speaker and panelist for national seminars and webinars, covering both macro-level international tax considerations and more specialized topics within the area. He holds a Juris Doctorate from Vanderbilt University Law School and an LL.M. from New York University School of Law. 

Each year from 2016-2020, Patrick has been recognized by Super Lawyers as a Rising Star (an annual recognition given to a maximum of 2.5% of qualifying United States attorneys). Finance Monthly, a United Kingdom-based publication, has previously named Patrick their Estate Planning Lawyer of the Year for work completed with non-resident clients.