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August 14, 2012

IRS Requires Reporting of Foreign Gifts Received from Abroad

If you as a US Citizen, Green Card Holder, or even a resident of the US living here on a visa received  gifts of more than $100,000 (cumulative amounts per calendar year) in gifts or inheritances from a nonresident  foreign individual or gifts of $14,375 from a foreign corporation or partnership (cumulative amounts per calendar year), you must report these amounts to the IRS by filing Form 3520.  Failure to file this form can result in penalties up to  35% of the amount of the gift or inheritance.

The IRS does track large sums transferred from abroad to US residents and will often audit these individuals fail to report these transfers on their tax returns to try to determine if they are not paying US taxes on taxable income from abroad. It is best you have complete documentation for all amounts arriving from abroad which are not taxable  in the event you are audited If the transfer is a  gift or inheritance and fail to file Form 3520, the IRS may impose the penalty.

We have helped hundreds of taxpayers file Form 3520 and we can help you avoid these possible huge penalties and the cost of defending your position in the event you are audited on transfers of funds from abroad.

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