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Form 3520: Who Files, Foreign Gift Thresholds, Due Dates and Penalties
Updated: Oct 5
Short answer: Form 3520 reports certain foreign trust transactions and large gifts from foreign persons. For gifts, the trigger is more than $100,000 from a nonresident alien or foreign estate, or more than $20,116 (2025) or $20,573 (2026) from a foreign corporation or partnership.
Key takeaways
U.S. persons, and executors of estates of U.S. decedents, file Form 3520.
Gifts from a nonresident alien individual or foreign estate trigger it above $100,000 in the tax year.
Gifts from a foreign corporation or partnership trigger it above $20,116 (2025) or $20,573 (2026).
It is filed separately from your income tax return, on its own deadline.
The IRS penalty for unreported foreign gifts is 5% of the gift per month, capped at 25%.
Who files Form 3520
The IRS titles it "Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts." It covers certain transactions with foreign trusts, ownership of foreign trusts under sections 671 to 679, and receipt of certain large gifts or bequests from certain foreign persons.
Foreign gift thresholds for 2025 and 2026
Nonresident alien individual or foreign estate (including related persons): more than $100,000 during the tax year, for 2025 and 2026. Source: Instructions for Form 3520 (Rev. December 2025).
Foreign corporation or foreign partnership (including related persons), tax year 2025: more than $20,116. Source: Rev. Proc. 2024-40, section 2.48.
Same, tax year 2026: more than $20,573. Source: Rev. Proc. 2025-32, section 4.47.
The IRS "Gifts from foreign person" page lists both figures and says they are adjusted each year for inflation. The instructions do not print the amount, so check your reporting year.
Gifts from different nonresident aliens are added together if you know or have reason to know they are related, or if one acts as a nominee or intermediary for the other. Once you pass the threshold, each gift over $5,000 is identified separately.
A reportable gift is an amount from a non-U.S. person that you treat as a gift or bequest and exclude from gross income. It does not include amounts paid for qualified tuition or medical payments made on your behalf. Gifts from a foreign corporation or partnership are subject to recharacterization by the IRS. Gifts from a "covered expatriate" are a different matter (section 2801, possibly Form 708).
Foreign trust transactions
If you received a distribution from a foreign trust, you report it in Part III, and a separate Form 3520 is filed for each trust. Ownership of a foreign trust is also reportable. The trust files Form 3520-A, due the 15th day of the 3rd month after its year end. A U.S. owner's substitute Form 3520-A attached to Form 3520 is due with Form 3520.
Due date and where to file
The due date is the 15th day of the 4th month after your tax year ends: April 15 for a calendar-year individual (April 15, 2026 for tax year 2025).
Living outside the U.S. and Puerto Rico with a place of business or post of duty outside them: June 15, with a statement showing you qualify.
With an extension for your income tax return: no later than October 15, checking box 1k and giving the return's form number.
The extra 2-month extension to December 15 does not move Form 3520. It is still due October 15.
You file it separately from your income tax return, by mail to Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409. Only a complete form with all required attachments counts as timely. If it is not complete by the due date, the assessment period for related items does not expire before 3 years after the information is reported.
The penalty framework
As the IRS states it in the instructions:
Foreign gifts (section 6039F): the IRS may determine the income-tax consequences of the gift, and a penalty applies of 5% of the gift for each month the failure continues, capped at 25%.
Foreign trusts (section 6677): the initial penalty is the greater of $10,000 or 35% of the gross value of property transferred to a foreign trust (Part I), or 35% of distributions received (Part III). If Form 3520-A is not timely or is incomplete, it is 5% of the gross value of trust assets treated as owned by a U.S. person.
Continued failure: additional penalties apply if noncompliance continues more than 90 days after the IRS mails a failure notice, reduced so the total does not exceed the gross reportable amount when the IRS can determine it.
Reasonable cause: no penalty if you show reasonable cause and not willful neglect. Foreign-law secrecy and trust confidentiality are not reasonable cause.
If you missed a Form 3520
The Delinquent International Information Return Submission Procedures are for people not under civil examination or criminal investigation and not yet contacted by the IRS. You attach a reasonable-cause statement, and penalties may still be assessed.
The streamlined procedures are for individuals whose failure was non-willful. Streamlined Foreign Offshore requires delinquent returns with all required information returns (Form 3520 is an example the IRS gives) for the most recent 3 years. See our streamlined offshore procedures guide.
The instructions also note you may owe FinCEN Form 114 (FBAR) and Form 8938. See FBAR vs Form 8938.
How we help
I am Sabih Shafi, an IRS Enrolled Agent, federally licensed to represent taxpayers before the IRS in all 50 states. We serve Americans in all 50 states and abroad, in English and Spanish. We can review whether Form 3520 applies for 2025 or 2026, prepare it for individuals, and help you plan how to handle missed years.
We quote a flat fee in writing before work starts, and the first review is free and takes 20 minutes. Call or text (323) 900-0305, or book your free review.
General information, not tax advice for your situation.
Frequently Asked Questions
Do I file Form 3520 if a relative abroad gives me money?
It depends on who gave it and how much. From a nonresident alien individual or foreign estate, the trigger is more than $100,000 in the tax year, including related persons.
Is Form 3520 filed with my tax return?
No. It is filed separately, by mail, on its own deadline.
Does the $100,000 threshold apply to each gift?
No. It is measured on the total received during the tax year, including from related persons. Once passed, each gift over $5,000 is identified separately.
What is the penalty for missing Form 3520?
For unreported foreign gifts, 5% of the gift per month, up to 25%. Foreign trust penalties start at the greater of $10,000 or 35% of the gross amount. None applies if you show reasonable cause and not willful neglect.
Are gifts from a foreign corporation treated the same?
No. The threshold is lower, and the IRS says such gifts are subject to recharacterization.
What if I never filed in earlier years?
The IRS has delinquent-submission and streamlined procedures. Eligibility depends on facts such as whether the IRS has contacted you, so get a review first.
Last reviewed: October 2026 by Sabih Shafi, EA
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This article is general information, not individual tax advice. If you want to talk through your own IRS or state balance, book a free 20-minute review or call or text us directly.
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