IRS pauses automatic penalties for late filing of Forms 3520 and 3520-A, shifting to evaluation of reasonable cause statements.
The IRS has ceased the automatic penalties for late filing of Forms 3520 and 3520-A, which report foreign gifts and trusts. Instead, the agency will evaluate reasonable cause statements before imposing penalties, a change expected to ease the burden on taxpayers. This policy shift, announced by IRS Commissioner Danny Werfel, will take effect by the end of 2024. Further guidance on penalty assessments is anticipated.
October 29, 2024
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