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ARTICLE · 26 NOVEMBER 2024

International Tax Changes On The Horizon

Farrell Fritz, P.C.
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First, Internal Revenue Service ("IRS") Commissioner Danny Werfel recently announced that the IRS is ending its automatic assessment of penalties for late-filed Forms 3520 reporting the receipt of foreign gifts and bequests.

United StatesTax
David Goldstein
David Goldstein

There are two recent taxpayer-friendly updates of note in the international tax filing arena.

First, Internal Revenue Service ("IRS") Commissioner Danny Werfel recently announced that the IRS is ending its automatic assessment of penalties for late-filed Forms 3520 reporting the receipt of foreign gifts and bequests. Under Internal Revenue Code Section 6039F, U.S. persons who receive large foreign gifts or bequests (for example, gifts or bequests exceeding $100,000 received from a nonresident individual or foreign estate) must report such gifts or bequests on Form 3520. Because such gifts or bequests are not subject to U.S. federal income tax, many taxpayers are unaware of this filing obligation. However, for the past decade or so the IRS has automatically been assessing penalties, which can be up to 25% of the foreign gift or bequest. Historically, the IRS ultimately abated the majority of these penalties and now, in light of these statistics, has changed

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