Hi we filed as married jointly for tax year 2017 under my spouse's name. We just found out that we might need to file form 3520 as well.
Our questions are:
1. Do we need to file 1040X as well? or just submit Form 3520 separately to IRS?
2. Since it has already past tax extension deadline(10/15/2018), do we need to pay any penalty to IRS?
Your help is greatly appreciated!
A Form 3520 is filed separately from your tax return.
The 3520 is most often filed when you receive a gift from a foreign person in the amount over $100,000.
IRS Form 3520 - https://www.irs.gov/pub/irs-pdf/f3520.pdf
IRS Form 3520 instructions - https://www.irs.gov/pub/irs-pdf/i3520.pdf
@DoninGA Thank you very much for your answer. The money was actually sent to both my spouse and me(to the bank account under my name). The total is much less than $200,000. In this case, do we still need to file 3520?
If the bank account is in your name only then only you would be reporting the total amount of the gift on a 3520. If a joint account for the gift and it is less than $100,000 each then the 3520 would not be required.
Just note the 3520 is an informational form only and has no bearing on a tax return.
No. If the IRS has questions concerning the 3520 they will contact you by mail. Keep any type of correspondence confirming the gift with your personal records if they are ever needed.
We have eFiled our 2019 tax return, and I am now completing form 3520. The form is asking me the name of the service center where my tax was submitted. I eFiled my report through Turbo Tax, how can I determine the center that is handling my return?
Did you filed the form 3520? Did they audit you or impose a penalty since you filed late? You said you received the gift in 2017 but didn't post your question till 2019, so I am assuming you filed late. I'm in the same situation as yours btw.
You need to print and mail Form 3250. It isn't part of your regular tax return.
A penalty applies if Form 3520 is not timely filed or if the information is incomplete or incorrect (there can be an exception if there is reasonable cause).
No penalties will be imposed if the taxpayer can demonstrate that the failure to comply was due to reasonable cause and not willful neglect.
Click this link for more detailed Instructions for Form 3250.