Reporting Requirements for Foreign Trusts with US Owners Form 3520-A, by Frank Agostino, Esq. and Edward Mazlish, Esq.

On May 21, 2018, the Internal Revenue Service (“IRS”) announced several new campaigns. One of the non-compliance areas targeted for enhanced review is Form 3520 and Form 3520-A non-compliance, including the associated penalties. In the last two editions of this newsletter, we offered guidance to tax professionals regarding the reporting requirements for U.S. persons who received gifts from foreign persons and conducted business with foreign persons.3 We have tried not to repeat those recommendations here. With the announcement of this IRS campaign, we review best practices for controversies involving foreign trusts with U.S. owners (Form 3520-A). …

When Can the IRS, NY, or NJ Tax the Worldwide Income of Resident or Non-resident Aliens?, by Frank Agostino, Esq. and Alec Schwartz, Esq.

On May 21, 2018, the Internal Revenue Service (“IRS” or “Service”) announced new campaigns which include issues regarding residency. Those campaigns include a Nonresident Alien (NRA) Tax Treaty Exemption Campaign, a NRA Schedule A and Other Deductions Campaign, and a NRA Tax Credits Campaign. These recently announced campaigns show that the IRS is making NRA reporting compliance a priority. This article will review the rules regarding when the IRS, New York, or New Jersey can tax the income of both resident and NRAs, and the potential defenses available. …

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