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Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, is the annual return used to report:

Form 3520 is required to be filed by a “U.S. Person”
. The term “U.S. Person”
includes not only individuals (U.S. citizens or resident aliens), as the term implies, but also corporations, partnerships,
trusts, estates, foundations, etc.

Form 3520 is required when a U.S. Person:

Form 3520 is filed and processed at the OSPC.

There is no separate extension request for Form 3520. An extension is automatically granted for Form 3520 when the taxpayer
files an extension for the income tax return for which the taxpayer is responsible.

Any Form 3520 filed for tax periods ending before 199812 will be forwarded to the Document Retention Branch. Attach Form 4227
to the front of the return with the notation “Tax Year prior to 199812”
.

Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner is the annual information return of a foreign trust with a U.S. owner. It is used to set forth a full and complete accounting
of the:

In addition to the above, the U.S. owner is responsible for ensuring that the trust furnishes such information annually to
himself and, if any, to other U.S. Owners, and U.S. beneficiaries of the trust who receive a distribution in that year.

Form 3520-A is filed and processed at the OSPC.

The due date for Form 3520-A is the 15th day of the third month following the end of the trusts tax year. The return can
be a Fiscal or Calendar year return.

Form 7004 is used to request an extension of time to file for Form 3520-A.

Any tax arising from an inclusion of an item of income reported on Form 3520-A must be paid with the tax return of the owner
(i.e., Form 1040, 1120, 1041, 1065, etc.).

Background: The Restructuring and Reform Act of 1998, IRC § 3705 provides identification requirements for all IRS employees working
tax related matters.

IRS employees are required to give their name and unique identification number during taxpayer telephone, face to face, and
written contact. Refer to IRM 1.2.4.6 for additional information.

Contact Procedures are contained in the following eight paragraphs.

All IRS employees, in the field, national, and regional office, who communicate, by telephone, correspondence or face to face,
with taxpayers, or their personal representatives, on tax-related matters are required to provide (at a minimum) the following
information:

All correspondence must include a telephone number where the taxpayer’s question can be answered. In addition, manually generated
and handwritten correspondence must include:

The IDRS number and numbers for some other letter systems are automatically generated. If it is not generated, or a handwritten
note is prepared, the ID card (badge) number must be used.

When a taxpayer requests to speak with a specific employee who previously handled the inquiry or request, or complains about
the level of service previously provided, every attempt should be made to resolve the taxpayer’s inquiry. If the issue cannot
be resolved, the employee should refer the inquiry using established procedures to his or her manager.

Correspondex letters will require a specific employee name and telephone number only if the employee initiating the correspondence
is in the best position to respond to any questions that the taxpayer may have about the correspondence, or the employee is
asking the taxpayer to provide additional case-related information.

Otherwise, if the taxpayer does not need to contact a specific employee, the correspondence needs only an IRS telephone number
and standard signature.

It is not necessary to repeat the ID card number (badge) on a subsequent contact, when the nature of an employee’s work involves
multiple contacts with the same taxpayer, and the employee has given the taxpayer (either telephone or in-person) their ID
card (badge) number on the first contact.

When contacting taxpayers by telephone, you must be sure you are speaking with the taxpayer or authorized representative before
disclosing tax information. See the Required Taxpayer Authentication in IRM 21.1.3.2.3 and Additional Taxpayer Authentication in IRM 21.1.3.2.4. Also, before leaving a message on a taxpayer’s answering machine, review IRM subsection 11.3.2.6.1.

Refer taxpayers to the Taxpayer Advocate Service (TAS) (see IRM Part 13, Taxpayer Advocate Service) when the contact meets
TAS criteria (see IRM 13.1.7, TAS Case Criteria) and you cant resolve the taxpayers issue the same day. The definition of
“same day”
is within 24 hours. “Same day”
cases include cases you can completely resolve in 24 hours, as well as cases in which you have taken steps within 24 hours
to begin resolving the taxpayers issue. Do not refer these cases to TAS unless they meet TAS criteria and the taxpayer asks
to be transferred to TAS. Refer to IRM 13.1.7.4, Same-Day Resolution by Operations. When referring cases to TAS, use Form
911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward to TAS
in accordance with your local procedures.

Tax return information can be received via fax as part of return perfection even if a taxpayer signature is required. In circumstances
where contact with the taxpayer has been made and documented, fax signatures are acceptable.

Contact with the taxpayer may be by telephone or correspondence. Follow local procedures to determine which method of contact
will be used.

Code & Edit examiners will indicate the fax paragraph on the approved Correspondence Action Sheet to advise taxpayers of the
option to fax their response.

IRC § 6103 establishes the taxpayers (T/Ps) right to privacy of tax information. You must be sure that you provide correct
information to the correct T/P or authorized representative (check IDRS CC CFINK for POA).

Taxpayer returns and return information must remain confidential as provided for in IRC § 6103,Confidentiality and disclosure of returns and return information . IRC § 7431 provides civil damages for unauthorized disclosure of returns and return information. IRC § 7213 and § 7213A
provide criminal penalties for unauthorized disclosure or unauthorized inspection of returns and return information and require
employees be discharged from duty if charged and convicted of these offenses.

For more information on General Disclosure Guidelines refer to IRM 21.1.3,Operational Guidelines Overview and for full discussions refer to IRM 11.3.1 through IRM 11.3.40,Disclosure of Official Information.

Effective December 17, 2003, certain nonresident and resident alien individuals not eligible for a Social Security Number
(SSN) must obtain an Individual Taxpayer Identification Number (ITIN)

ITIN requests must be submitted to the Service on a Form W-7 / W-7SP Application for IRS Individual Taxpayer Identification
Number and it must be attached to their income tax return

All original Forms W-7 and the required supporting documentation (i.e. passports, birth certificates, etc.) must be forwarded to the ITIN Unit located at the Austin Submission Processing campus ITIN Unit.

The purpose of this initiative is to achieve consistency in the Business Master File (BMF) Error Resolution System (ERS) processing
IRMs.

Topics for the BMF Consistency have been identified and developed as a coordinated effort between Cincinnati, Ogden and Paper
Processing Branch BMF Code & Edit/ERS Section.

BMF Consistency Subsections are identified by a ♦ (diamond) before and after the title.

Text in normal print is the common processes for BMF returns. The text in BOLD print is form specific and applies to this IRM only.

A listing of documents on which the transcribed data failed one or more of the consistency, math verification, or validity
tests in the computer program.

The Error Register is made up of Sections and Fields that are directly or indirectly related to the Data Sections and items
transcribed and input to the computer.

An error or reject record that has had a correction record input but still contains an invalid or math error condition that
requires correction.

A portion or segment of a record containing data fields related to a specific schedule or portion of the source document.

Each Section is identified by a two digit numeric section number.

A Field is a specific item of information transcribed from a form, schedule, or other document.

A Section on the Error Register contains a certain number of fields which always appear, whether the field contains data or
is blank.

Each Field is indicated by an Alpha Indicator (letter) which is located at the beginning of each field.

A field is either FIXED (no field breaker) or VARIABLE (ends with a field breaker). See the next section for an explanation.

A field breaker is a special symbol which indicates the end of a variable field.

The most common field breaker is a plus sign (+), although some fields can end with a minus sign (-), indicating a loss or
a refund.

The field breaker will always appear at the end of the field whether it contains data or not.

When changing the data in a field on the Error Register and you enter a positive field breaker, enter a comma (,) and not
the plus sign (+).

When changing the data in a field on the Error Register and you enter a negative field breaker, enter a pound (#) sign and
not the minus sign (-).

Do not line through a field breaker unless you are changing it to a different one.

When a section is added to the error register, only the fields which contain data are actually entered onto the register.
The field breakers used would be the comma and/or pound sign, as required, but not the plus or minus sign.

A few fields on the error register do not end with a field breaker, or any other indication of the end of the field. These
are known as “Fixed”
fields. Information for these fields will be found in the IRM under each specific field explanation.

Action Codes are used to indicate that specific information is missing or that the record is to be rejected from processing.
The Action Code must contain sufficient detail to indicate if correspondence is to be sent to the taxpayer or the specific
in-house research or action required.

Only one Action Code may be entered in any one section of the Error Register to correct that section. The Action Codes valid for this program are, 2, 3, 4, 5, 6, 7, and 9.

All taxpayer correspondence is governed by the guidelines in
IRM 21.3.3, Taxpayer Contacts – Incoming and Outgoing Correspondence/Letters
. Correspondence includes all written communication from a taxpayer or their representative, excluding tax returns, whether
solicited or unsolicited, and includes:

In all instances where you are instructed to correspond for missing information on Forms 3520, completely examine the return
to ensure that all missing information is requested in the same letter. Initiate correspondence one time only.

A return must contain the following specific items before it is considered processable. If they are not present and cannot
be found on the return or its attachments, then ERS will research IDRS, to locate the information in order to make the return
processable.

Conditions which make a document unprocessable are:

Correspond with the taxpayer for the required information using IDRS letter 3653C when correspondence is required.

Use the following instructions when processing special or nonstandard returns for Form 3520.

These errors result when required data is missing, or when incorrect data is present.

These errors are indicated by an asterisk (*) printed before the invalid field.

An asterisk may also be printed before a field for verification purposes.

Correction procedures:

These errors include:

These errors are caused when the computer computation differs from the taxpayers computation or the transcribed amount.

Math Errors occur when:

When a Math Error occurs,

Use the “verified”
field to bypass the math check on loop.

If the transcription is correct, use Action Code “6″
to enter the computers calculation in the “verified”
field.

If the computer cannot compute the amount correctly (because there are more taxpayer entries than can be transcribed),

To correct math/consistency errors:

An invalid correction attempt error is caused by:

A complete description of invalid attempts may be found in IRM 3.12.38, General Instructions for Campus Error Resolution.

When an invalid correction attempt is detected, “AA”
is printed to the right of the Batch Number on the Document Identification Line of the Loop Error Register.

If the cause of the invalid correction attempt can be determined, correct the Loop Error Register as if no attempt had been
made to correct it before.

If the cause of the invalid correction attempt cannot be determined, enter Action Code “7.”

To correct illegible or missing data:

Rejects will input a Notice of Action on the Master File as discussed below by using IDRS Command Code REQ77 / FRM77 when;