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A penalty applies if Form 3520 is not timely filed or if the information is incomplete or incorrect (see below for an exception if there is reasonable cause). Generally, the initial penalty is equal to the greater of $10,000 or the following (as applicable).
Publication 1345, Handbook for Authorized IRS e-file Providers of Individual Income Tax Returns, provides rules and requirements for participation in IRS e-file of individual income tax returns and related forms and schedules.
U.S. persons (and executors of estates of U.S. decedents) file Form 3520 to report: Certain transactions with foreign trusts. Ownership of foreign trusts under the rules of sections Internal Revenue Code 671 through 679. Receipt of certain large gifts or bequests from certain foreign persons.
If you receive an inheritance from a foreign estate or non-resident alien, or gifts from non-resident aliens exceeding $100,000 (USD), then it must be reported to the IRS. This includes the total of all foreign inheritance or gifts received.
Each individual is responsible to file a Form 709. You must file a gift tax return to split gifts with your spouse (regardless of their amount) as described in Part III Spouses Consent on Gifts to Third Parties, later. If a gift is of community property, it is considered made one-half by each spouse.
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