Form 3520-A Extension (Code 27)

Among extension traps, Form 3520-A may be the most expensive per mistake. U.S. owners of foreign trusts routinely extend their own Form 1040 by October and assume the trust’s paperwork extended with it. It didn’t — and the penalty regime attached to this form starts at five figures.

Here is the deadline, the one extension that actually works, and the 3520 vs. 3520-A distinction that explains the confusion.

The deadline — earlier than you think

Form 3520-A is due by the 15th day of the 3rd month after the end of the foreign trust’s tax year — March 15 for a calendar-year trust, a full month before the U.S. owner’s own April filing deadline. The trust (or, where applicable, the U.S. owner filing a substitute Form 3520-A) needs the extension request in by that March date.

The only extension that works: Form 7004, code 27

Form 7004 with code 27 extends Form 3520-A by the standard 6 months — to September 15 for calendar-year trusts. The instructions’ warning deserves quoting exactly: "An extension of time to file an income tax return does NOT extend the time to file Form 3520-A." Not the owner’s Form 4868, not the owner’s business 7004 for another return — Form 3520-A needs its own Form 7004 under its own code.

Know your form: Form 3520 (the U.S. person’s report of foreign trust transactions and gifts) rides on the owner’s income tax deadline and extension. Form 3520-A (the trust’s own annual return) does not. The near-identical numbers cause real missed deadlines.

The penalty that concentrates the mind

If a foreign trust fails to file a timely and complete Form 3520-A, the U.S. owner faces an initial penalty equal to the greater of $10,000 or 5% of the gross value of the trust assets treated as owned by that person — with additional penalties if the failure continues more than 90 days after IRS notice. For a trust holding meaningful assets, the 5% prong dwarfs the flat figure. A two-minute extension filing in March is cheap insurance against it.

Frequently asked questions

When is Form 3520-A due?⌄

The 15th day of the 3rd month after the trust’s year end — March 15 for calendar-year foreign trusts. That is a month ahead of the owner’s individual return, which is exactly why it gets missed.

Does my Form 1040 extension cover the trust’s Form 3520-A?⌄

No. The instructions state it in capitals: an income tax return extension does NOT extend Form 3520-A. The trust needs its own Form 7004 with code 27, filed by the trust’s March deadline.

What is the penalty for a late Form 3520-A?⌄

The initial penalty on the U.S. owner is the greater of $10,000 or 5% of the gross value of the trust assets treated as owned, with more accruing if noncompliance continues over 90 days after IRS notice.

What is the difference between Form 3520 and Form 3520-A?⌄

Form 3520 is filed by the U.S. person reporting transactions with a foreign trust or large foreign gifts, and its deadline follows the person’s income tax return, extensions included. Form 3520-A is the foreign trust’s own annual return, due in March and extendable only by its own Form 7004 (code 27).

Related guides

Official sources

Tax rules, rates and deadlines change — verify current requirements against the IRS sources above before acting. This guide is general information, not tax or legal advice.

Extending Form 3520-A: The Foreign Trust Information Return