§6039F · Foreign gifts
5% / month
Capped at 25% of the unreported gift
Applies for each month the failure to report continues.
Example: an unreported $200,000 gift can produce a $50,000 penalty at the maximum.
IRS penalty defense
Haven't filed your IRS federal tax return — the Form 1040, 1120, 1065 or informational returns?
A non-filed federal tax return that does not include Form 3520, when required, can become a CP15 penalty notice. We can handle this for you if you haven't filed yet. What comes next is preparing the missing filing, filing any missing forms and clarifying any IRS issues so you can get current without the guesswork.
The IRS can assess a civil penalty when a required Form 3520 or Form 3520-A was never filed, and a CP15 notice is how you learn about it. We prepare what's missing, defend and appeal the penalty, and request abatement.
Clients Worldwide. Former Big-4 Executive Tax Director & CPA (South Carolina).How a missed filing becomes a penalty notice.
Form 3520 → CP15
Our practice is focused on assisting non-filers (individuals and businesses) for tax years 2023 through 2026.
Form 3520 is the filing. An IRS CP15 Notice informs you that the IRS has assessed a civil penalty, which can result from a missed filing. They are two ends of the same problem.
- 01
Form 3520 is required
It reports certain foreign trust transactions, ownership of certain foreign trusts, and gifts or inheritances received from foreign persons. A foreign trust with a U.S. owner also has an annual Form 3520-A.
- 02
It is late, incomplete or missing
A filing that is not submitted on time, with no extension, or that contains incomplete or incorrect information, can trigger a penalty.
- 03
The IRS sends a CP15 notice
A CP15 is a letter telling you the IRS has charged a civil penalty. It is not a tax form. It states the penalty, the amount due, the reason and how to challenge it. Not every late filing results in one.
- 04
You respond, commonly within 30 days
Follow the deadline and instructions on your notice. Reply in writing with records, proof of filing and documents about the gift, inheritance or trust transaction.
- 05
We seek abatement or appeal
Relief is available where the failure was due to reasonable cause and not willful neglect. It depends on the facts and is not guaranteed.
What the CP15 can charge
Know what the IRS can assess.
Initial penalty amounts under IRC §§6039F and 6677. Continuation penalties may follow if you do not file within 90 days of an IRS notice.
Form 3520 · Part I
35%
Greater of $10,000 or 35%
Of the gross value of property transferred to a foreign trust and not reported.
Form 3520 · Part III
35%
Greater of $10,000 or 35%
Of the gross value of distributions received from a foreign trust and not reported.
Form 3520-A · U.S. owner
5%
Greater of $10,000 or 5%
Of the gross value of the trust assets treated as owned by you, if Form 3520-A is not filed.
No penalty is imposed where the failure is due to reasonable cause and not willful neglect. Relief depends on the facts and is not guaranteed. Sources: IRS international information reporting penalties; Instructions for Form 3520.
OUR SERVICES FOR NON-FILERS AND LATE FILERS
Three ways we defend your position.
Focused exclusively on non-filed Federal tax returns for tax years 2023 through 2026, including Form 3520, Form 3520-A, and related filing tax forms such as IRS Form 1040, 8938, 1120, 1065, 5471, 5472, FBARs, and other informational reporting.
Penalty appeals
Challenge unfair IRS penalties and protect your international tax position.
Discuss this →Abatement requests
Reduce or remove penalties when you qualify for abatement relief, including a reasonable cause statement.
Discuss this →IRS representation
Direct representation with the IRS to resolve your 3520, 3520-A and CP15 issues.
Discuss this →How a matter begins
- Review the notice and filing history. We establish what was filed, what was missed and what deadline applies.
- Prepare the reasonable cause statement. We assemble the facts and records that address the two-part test: reasonable cause and not willful neglect.
- Represent you with the IRS. We handle correspondence, the abatement request and any appeal.
BY DESIGN
Our practice provides Form 3520 and Form 3520-A tax consulting, CP15 notice assistance, penalty abatement requests and IRS representation.
27+
Years of international tax experience
- 80%+ of clients are international businesses and U.S. taxpayers with unfiled returns for 2023–2026
About · Why the practice
We are built for cross-border complexity.
Jason Kovan, CPA (South Carolina) is a former Executive Tax Director with a Big-4 firm. He has worked with some of the world's largest global tax firms, in the United States, Zurich, London and the Middle East, advising high-net-worth individuals, business owners and corporations.
He and his team have prepared and reviewed tens of thousands of individual, corporate and partnership tax returns, and he has appeared on syndicated radio and as a speaker at international symposiums.
JD, CPA (South Carolina)Former Big-4 Executive Tax Director
Clients served: U.S. taxpayers who have not filed federal tax returns for tax years 2023 through 2026, U.S. expatriates, U.S. taxpayers and residents, green card holders, dual nationals, individuals and businesses with foreign accounts, trust beneficiaries, and high-net-worth clients across the U.S., Canada, Europe, the Middle East, Central and South America, India, Hong Kong and Singapore.
Our approach
Why work with a focused 3520 practice.
Specialized knowledge
We focus on Forms 3520 and 3520-A and represent clients before the IRS on related penalties.
Error identification
We review your original filing for the errors or omissions that led to the penalty.
Penalty mitigation
We negotiate to mitigate or abate assessed penalties and address issues before they escalate.
Handling of appeals
At your discretion, our office can work with the professional you choose on appeals and disputes over the penalty.
Efficiency and accuracy
Working solely on these forms keeps us current and saves you time and effort.
IRS process knowledge
We know the IRS's procedures and guide your case through them efficiently.
Questions before you respond
Form 3520 and CP15, answered.
Receiving an IRS penalty notice can be unsettling, especially when it involves money from overseas. Understanding why the IRS sent it is the first step.
Your CP15 response deadline
Commonly 30 days from the notice date. Follow the deadline printed on your own notice.
Request a Consultation →What is a CP15 notice?
A CP15 is a letter notifying you that the IRS has charged you a civil penalty. It is not a tax form. The notice identifies the penalty, the amount due and the reason for the charge. It may also show interest and explain how to challenge the penalty.
How does a CP15 relate to Form 3520?
Form 3520 reports certain foreign trust transactions, ownership of certain foreign trusts, and gifts or inheritances from foreign persons. If a required form is not filed on time and there is no extension, the IRS may assess a civil penalty and issue a CP15 Notice informing you of that assessment. The same applies to an incomplete or incorrect filing.
How much could the penalty be?
For unreported foreign gifts, 5% per month up to 25%. For unreported foreign trust transfers or distributions, generally the greater of $10,000 or 35%. For a missing Form 3520-A, generally the greater of $10,000 or 5% of the trust assets treated as owned by you.
What should I do if I receive a notice?
Check your deadline immediately and follow the instructions printed on the notice, including where to send your response. Respond in writing with relevant records, proof of filing, and documents relating to the gift, inheritance or trust transaction.
Can the penalty be removed?
The IRS allows relief when you can demonstrate the failure resulted from reasonable cause rather than willful neglect. You explain the circumstances and provide supporting evidence. Relief depends on the facts; an explanation does not guarantee approval.
Who must file Form 3520, and where do I mail it?
Whether you must file depends on the transaction and the reporting requirement involved. Use the mailing address in the current Form 3520 instructions for the return you are filing. Our office, 4440 PGA Boulevard, Suite 600, Palm Beach Gardens, FL 33410, is not an IRS filing address.
What is involved in a penalty appeal?
A penalty appeal may involve reviewing the notice and filing history, preparing a written response with supporting information, and following the instructions for the appropriate IRS office. Within an accepted engagement, our practice can provide tax consulting, assistance with an abatement request and administrative appeal support. Relief depends on the facts and is not guaranteed. Some matters call for professional representation; any engagement for it is separate and identified in writing. Consider qualified tax or legal advice for your circumstances.
Who we help
Built for cross-border complexity.
Individuals
Non-filers, taxpayers and beneficiaries
U.S. taxpayers who have not filed federal tax returns for tax years 2023 through 2026, plus citizens, green card holders, dual nationals, high-net-worth individuals and trust beneficiaries with foreign accounts, overseas assets, foreign trusts, gifts or inheritances.
Businesses & entities
Companies, partnerships and trusts
International businesses, foreign corporations, partnerships, and foreign trust owners and trustees facing cross-border reporting obligations or CP15 notices after a required form was not filed on time and no extension applied.
Insights & Guidance
PRACTICAL THINKING ON FEDERAL TAX RETURNS FOR INDIVIDUALS & BUSINESSES, FORM 3520, 3520-A, CP15 NOTICES, FORM 1040, FORM 8938, FORM 1120 (CORPORATE RETURNS), FORM 1065 (PARTNERSHIP RETURNS), FORM 5471, FORM 5472, FBARS, & OTHER INFORMATIONAL REPORTING.
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Start your consultation. Get relief today.
Tell us what arrived from the IRS. You will speak directly with Jason Kovan, JD, CPA (South Carolina), and we will help you understand the path forward.
- Office4440 PGA Boulevard, Suite 600
Palm Beach Gardens, FL 33410, U.S.A. - Phone+1 770 501-4413
- EmailJason@3520Form.com