Just as a suggestion from one taxpayer to another- for those who are trying to deal with this, last minute- You can get an EIN by phone (required for each foreign trust). To do this, you will need to- 1. Download and print Form SS-4 from the IRS website; 2. Fill it out to the degree you can, using the instructions for trusts found on p.20-21 of this document- http://www.irs.gov/pub/irs-pdf/p1635.pdf 3. Ideally having your last year's 1040 handy, in case they want to verify your identity with details from it, you'll call 1-800-829-4933 (you'll be on the line a while, so consider your least expensive alternatives). I suggest calling as early as possible. The best wait times I've encountered was ten minutes, calling at 7 AM: I'd try even earlier, if I was going to call again, myself. The wait times are long, in part, because your call will have to be routed to the right department, the one that deals with issuing EINs for foreign trusts. When you get a live person on the line, you might start with, "I'm calling to get an EIN for a foreign trust," just to get things off on the right foot. They will assign you a number while you're on the phone: write it in the blank for EIN number, at the top of your draft SS-4, write the date and time of your call, and keep the draft for your records (you will not be mailing this form in, if they've given you a number by phone). ____________________________ My suggestion about times to call seem also to apply, to some degree, to getting access to the IRS website; for example, to download and print all the forms you may need: heavy traffic seems to seriously slow their computers after the early morning hours (and evenings, as well). To get forms for prior years, such as "2003 Form 3520a," just type a search, using this format, and you'll find what you need. ___________________________ A reminder to the reader, if you have unpaid taxes from prior years as a result of undisclosed income from your trust property, you will definitely need to follow the procedures outlined at http://www.irs.gov/newsroom/article/...234900,00.html In my present understanding of things, this is a more complicated, and more serious matter- than the more common failure to timely file required reports as a result of being unaware of the requirements, in the absence of failure to pay taxes on income from the trust property- but the process is clearly set out on the IRS website, and there is a way to timely enter the process (by Sept 9, 2011), allowing you to take advantage of the offer of partial amnesty, even if you don't have all the required information available at the time. ________________________ Looking back on how I proceeded on my own reporting, if I'd had a serious issue with "failure to timely file required reports of foreign assets," in the absence of any under reporting of income from those assets, I probably would have chosen to follow these procedures, rather than trust that the agents would find in my favor on "reasonable cause for late filing," which is what I actually did. Here's a recent notice from the IRS, worth reading to understand what may need to be done, and a means by which you can get even more time to bring yourself into compliance- ____________________________
The Foreign Grantor Trust Owner Statement- page 3, line 7, of Form 3520- requires the attachment of an "explanation of the facts and law (including the section of the Internal Revenue Code) that establishes that the foreign trust...is treated for U.S. tax principles as owned by the U.S. person." Here's what I wrote, in response: When looking over what I wrote, quoted above, keep in mind it was written based on our trust instrument, which names us as trustees: yours may be set up differently, or vary in other ways which would affect the language needed in this statement of "facts and law".
Last year, we speculated on this thread whether there would come a time when Mexican Banks would begin reporting the existence of and economic activity of fideicomisos they managed to the U.S. Government. Yesterday I got, for the first time, a document which looked suspiciously like one that might serve that purpose (referred to earlier, that of reporting the economic activity of the trust). It contained details very similar in kind to that required to be reported in Forms 3520 and 3520a, showing the economic activity of the trust, broken down by category, the value of the property, the percentage participation in the trust, etc. In our case, it was error filled- both our names were stated incorrectly- and talked of economic activity that bore no relation to the true state of affairs, speaking of a "commission" of over 20,000 pesos (apparently referring to a charge for managing the flow of funds through the account, of which there were none aside from us paying a fee to the bank of just under 7,000 pesos, which it didn't mention). Has anyone else gotten such a statement recently, or in the past? (Since this is the first notice of this type that I've seen, I don't know if this may have been the routine practice in the past, or represent something new.)
Yes I received one and my trust is through Scotia. I have received the same form from Scotia every year since I own my condo (2008) . It is a year end statement of account
Thanks, BVG, so it's nothing new, then. I'll ignore it, as it doesn't serve any purpose for me in my reporting, since I take responsibility for all reports, anyway, just to make sure it's being done as well as I can- and on time (much easier, the second time around, as my head is not full of questions!).
What is a Fideicomiso http://www.sjbt.com/repository/pub-res/What's a Fideicomiso.pdf I an excellent analysis of 3520 and the IRS rules.
I personally, wouldn't choose to rely on this article. It is out of date, for one thing, but also assumes things about the nature of the trust established that are not true for my trust. Further, it makes scant (or no) references to the instructions that now come with the trust reporting documents, instructions which go a long way to clarifying what IRS thinks of these trusts, nor mentions (naturally enough) the enforcement actions that have taken place involving fideicomisos since the date of the article. The article states that these are non grantor trusts, while my fideicomiso is clearly a grantor trust (in the sense that IRS uses that term). The author might very well agree, had she seen my trust document. _______________________
