For the first time ever the IRS has made pronouncement concerning whether a Mexican Fideicomiso beneficiary has to file US tax forms 3520 and 3520A.
The bad news is that it made this pronouncement by way of a Private Letter Ruling which is only binding on the IRS with respect to the taxpayer who applied for the ruling. The IRS IS NOT bound by the holdings in the ruling with respect to other taxpayers. Other taxpayers also by law can not cite a Private Letter Ruling as authority for their position.
The Private Letter Ruling held that in the particular factual situation of the Taxpayer who applied for the ruling that the US Taxpayer was not required to file the Forms 3520 for that Taxpayer's Fideicomiso.
Whether referring to this private letter ruling will cause the IRS to eliminate penalties for not filing Forms 3520 for a Fideicomiso cannot be determined at this time. For any filer to be completely certain they did not have to file these forms, the IRS would need to make a written public announcement that such filing was not required. For the last 7-9 years the IRS has been requested to make such a public written holding, and has not done so to date. SEE THE REDACTED RULING HERE. THE IRS HAS NOT YET PUBLISHED IT.
