Delinquent International Information Return Submission Procedures

Internal Revenue Service procedures provide that taxpayers who do not need to use the OVDP or the Streamlined Filing Compliance Procedures to file delinquent or amended tax returns to report and pay additional tax, but who:

  • have not filed one or more required international information returns,
  • have reasonable cause for not timely filing the information returns,
  • are not under a civil examination or a criminal investigation by the IRS, and
  • have not already been contacted by the IRS about the delinquent information returns

should file the delinquent information returns with a statement of all facts establishing reasonable cause for the failure to file.

As part of the reasonable cause statement, taxpayers must also certify that any entity for which the information returns are being filed was not engaged in tax evasion.  If a reasonable cause statement is not attached to each delinquent information return filed, penalties may be assessed in accordance with existing procedures.

“International information returns” include:

  • Form 8938, Statement of Specified Foreign Financial Assets
  • Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations
  • Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts
  • Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner

The IRS provides the following procedural guidelines for filing delinquent international information returns:

  • All delinquent international information returns other than Forms 3520 and 3520-A should be attached to an amended return and filed according to the applicable instructions for the amended return.
  • All delinquent Forms 3520 and 3520-A should be filed according to the applicable instructions for those forms.
  • A reasonable cause statement must be attached to each delinquent information return filed for which reasonable cause is being requested.

The IRS says that information returns filed with amended returns will not be automatically subject to audit but may be selected for audit through the existing audit selection processes that are in place for any tax or information returns. We have filed many information returns under the delinquent international information returns submission procedures. None of them have been selected for audit.