I'm not 'seeing' where it says that the entire 3520-A must be attached to the 3520. I thought it was only page 3 of the 3520-A that was needed to satisfy Part II of the 3520? Please point out what I'm missing. TIA Another issue that I've just noticed (UT OH) in the Instructions for 3520, Part II, line 23 is the need for "Form 8082 to notify the IRS that you did not receive a Foreign Grantor Owner Statement". Since the Fideicomiso is not the type of trust all these Forms really are meant to address, we do not receive this Owner Statement from the banks that hold the Fideicomiso so add Form 8082 to the pile.
You´re not missing anything, Mole. I should have made it clear in my first post, as I did in my last, which appears just ahead of your two, today. It's perfectly true that the bank I deal with does not do anything, aside from billing me each year; but, they are not required to, either. I am, as I see it. My trust instrument names me Trustee (fideicomisario) of the trust, and assigns all duties of managing the trust to me. In that capacity I issue the owner's statements to those entitled to them, along with preparing all the informational returns required of me as a U.S. person. I can see where you might have thought it was necessary to attach Form 8082, I just have a different view of it, based on my understanding of my trust instrument. Also in the exercise of what I see as my powers as Trustee, I appointed myself agent for service in the U.S., meaning I did not have to attach a copy of the trust to accompany the initial filings. Our fideicomisos here are a special breed of cat in that among the few meaningful powers the bank retains to itself is the power to hold legal title, and to deliver that legal title to the successor owner if the property is sold and the trust closed. All other meaningful duties are assigned the trustee (speaking specifically of my fideicomiso: others' may read differently).
V Have you seen this? It appears we can all request a private ruling from the IRS and we will never have to fill out one of these maze of forms again. Nobody from the IRS can even answer any questions on the 3520 A and 3520 as it relates to a fideicomisario. When you call they tell you they cannot answer ony questions and nobody in teh IRS can as nobody is trained on this subject. International Tax Blog: I.R.S. Rules that Mexican Fideicomiso is Not a Trust
Those who deal with enforcement understand the fideicomiso and how reporting requirements are dealt with well enough! As for the notion that fideicomisos are not trusts, that argument has never flown, and still doesn't. The private ruling you spoke of dealt with the specific issues raised in that case, not with fideicomisos in general. It's true that taxpayers can request a private ruling: those who are loath to file these forms for whatever argument of inconvenience, complexity or otherwise, would also be loath to take the time and spend the large sums required to secure a private ruling- which could go against them anyway. Reading what people have written on blogs doesn't get close enough to the actual language of the private ruling you spoke of: locate the private ruling itself, see if the details exactly match your situation, then decide if you'd want to spend the dough and take the time to get one. Nobody would be disappointed if IRS decided to drop these reporting requirements: they've been asked to many times, in many different ways, always with the same result. As of this time, enforcement appears to be increasing, not decreasing. Compliance may start increasing as well, as more an more people here from IRS about this. Frankly, the complexity is overrated. It took me a while to understand the special ways in which IRS develops some of their concepts, such as the concept of grantor trust, but I managed it. CancunMole appears to have a done a lot of reading in this area and also has a grasp of it. It's not necessary to understand it fully to be able to sit down and fill out the forms: it does take a will to do it. Since not complying carries stiff penalties, and complying does not increase anyone's obligation to pay taxes on taxable income, there is little justification for not filing these, and doing it right.
Did you read the info at Steve's link? The IRS PLR 201245003 linked within is the ruling that declared that their Fideicomiso did not fit the requirements of all these forms. Yes, it was a private ruling just for these folks but if you read the language of the ruling, without the mention of their X corporation, their situation fits my situation to a 'T' and I'd bet most of the folks here with Fideicomisos too. Having to do these forms year after year is ridiculous when the Fideicomiso is not the type of trust that these forms are designed to track. If you enjoy or don't mind doing them, then good for you! I'm for anything that will remove any kind of stress from life and provide less paperwork. Also, I don't want my kids to have to each file them in perpetuation when they inherit. IMO, the IRS considering these Mexican Property Fideicomisos as reportable trusts is actually discriminatory since if we owned property anywhere else in Mexico except in a "restricted zone", the Fideicomiso wouldn't even be necessary. Yes, I have been reading just about anything I can find on this since 2009 and I don't claim to have a clue if I'm doing it correctly or not until I get an IRS letter in the mail stating what it should have been and redoing it! I personally hate seeing anything from the IRS in my mailbox!
Hi, Mole, I did read it when it came out, and concluded it was distinguishable. When I have time I'll read it again and see if I can explain why I did not think it could be used to put these issues to bed. You can imagine what a private lawyer would charge to seek a private ruling from the IRS on anything, and the lawyer's blog which spoke of the ruling did not mention what he would charge for such a thing, nor the likelihood of a successful outcome. The IRS is supplied with copies of our fideicomisos: they know what they contain. They are enforcing the reporting requirements. If you look at their manual (I'll provide a link, later) you'll see just what the agents are told in regard to how to proceed in cases just like ours.... I think it could be interesting for those who take this seriously, as you do, to get together for a chat, forms in hand, and see if we find we are fully comfortable with the tack we are taking in the way we are filling these out. Here's another point of possible interest, when the question is how to execute these forms: since I have a grantor trust, and the trust itself incurs no expenses- they all being chargeable to me according to the terms of the trust instrument, and any deductions for expenses relating to the property being deductible to me personally, if deductible at all, and that being in keeping with the notion of grantor trust; and, my property being my residence and never rented, all the numbers for income and expenses of the trust are zero- making the filing of these forms that much more simple. This is just one more example of things that could be discussed among those interested in these questions.
Nah, thanks anyway but I don't want any more links or opinions other than directly from the IRS. I also don't think that one needs an attorney to submit the request but I do think that the IRS fees of around $2,000 are a bit much!
The laws and regulations themselves, as well as the IRS manual of instructions for its agents, are the only sources that I rely on, myself; and, this does not include phone calls to IRS as I have always found that to be a waste of time. I find blogs, even from lawyers, to often contain statements I believe to be erroneous. In light of your comments, Mole, what follows is not for you, but others may find it of use: I believe it to represent a sensible, lawyerly statement, one of the few I've found in the web, on these subjects. As you can see, he holds out hope that the IRS will decide to exclude fideicomisos from reporting requirements: in this, he is more optimistic than I am....
I had said earlier that I thought the private ruling dealt with a transaction that was distinguishable from the transaction to which I was a party, the creation of my fideicomiso. In my transaction it appears that the seller placed the property in trust at my request to be held for my benefit, and the benefit of any beneficiaries I chose to designate, with my paying all costs incurred in creating the trust as well as paying the seller FMV for the property. The trust appears to be to be irrevocable, in that the seller surrendered all rights to the property at the time the trust was created. I was named the trustee of the trust: the bank is not the trustee in the scheme my fideicomiso establishes, though the bank was said to be the trustee in the case involved in the private ruling. (The trust instrument in my case uses the generic term "fiduciary" for the bank, and the more specific term "trustee" when describing me and my duties.) In this, I suspect it is like most fideicomisos, Mole's statement to the contrary notwithstanding. Unlike the case involved in the private ruling, I did deal directly with the bank in establishing the trust, whereas those who directed the U.S. based corporation to purchase the property say they never dealt directly with the bank, though I don't think this is a relevant difference. A U.S. Corporation was the moving party in the transaction for which the private ruling was issued, and the corporation was the taxpayer. The property was purchased with funds from the corporation insofar as we can tell from the opinion. To what degree these facts may have influenced the decision maker I cannot say, but it does create an interesting dilemma for the shareholder/owners of the corporation, said to be husband and wife, should they decide to use the property themselves, in that they might incur a tax liability for the market value of the use of the property, which belongs to the corporation, and any benefit provided the husband and wife in terms of use of the property would become taxable to them, as I see it. I suppose it is possible that the corporation's motive in acquiring the property was simply speculation in its future value, as the ruling specifically declares that the property is not rented, and derives no income [it is merely being held]: the husband and wife purchasing it through a corporation may have been nothing more than an attempt to isolate themselves from potential personal liability arising from the ownership or use, something I've considered myself when deciding whether to buy via a fideicomiso, or via a Mexican corporation. As interesting as the decision may appear to be, I don't think it reflects any significant move away from enforcement of the reporting requirements and may ultimately be viewed as an anomaly. ______________________
