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American Samoa

Moderate

American Samoa trusts are foreign trusts for Forms 3520 and 3520-A, but most people born there are U.S. nationals, not citizens, and a national without a green card is a nonresident alien who files none of them. Citizens and residents file; American Samoa is not a mirror code territory, so the 2024 proposed exception for residents does not apply.

Tax-deferred employer plans

American Samoa Government Employees' Retirement Fund

Part I
No
Part II + Form 3520-A
DependsOnly if it is a §402(b) trust and your contributions exceed the government's
Part III
DependsPayouts, on the cautious course
Form 4970
No

For a U.S. citizen or resident, if the Fund is a trust. A U.S. national who is not a citizen and has no green card is usually a nonresident alien and files none of these.

What it is

The American Samoa Government Employees' Retirement Fund is the public pension plan for American Samoa's government employees.1 Its statute could not be read for this guide, so its contribution rates and benefits are not given here; check them with the Fund.

Trust classification

A foreign trust, if its fund is a trust; no IRS guidance.

If the Fund is a trust, an arrangement in which trustees hold property for beneficiaries,2 it is a foreign trust: set up under American Samoa law and supervised by its courts, it fails the court test.3,4 No IRS guidance addresses whether the Fund is a trust.

§402(b) analysis

An employer plan read as a §404(a)(4) or §402(b) trust; no IRS guidance.

As an employer's plan it reads as an employees' trust: the trust §404(a)(4) describes if it would meet §401(a) but for its location, and a §402(b) trust if not.5,6 On the first reading its participants are taxed as in a qualified plan;7 on the second, once your own contributions exceed the government's you are treated as owner of the part yours fund, and in a defined benefit plan the government's contribution for you is worked out by actuarial methods if it is not known.8,9 A bona fide resident of American Samoa leaves income from American Samoa out of U.S. gross income.10

Exemption analysis

No mirror-code exception: American Samoa is not a mirror code possession. Rev. Proc. 2020-17: not settled.

The 2024 proposed exception for bona fide residents is only for mirror code possessions, where the income tax is the U.S. income tax as if the possession were the United States.11,12 American Samoa is not one: it adopts the U.S. income tax as it stood on December 31, 2000, as a separate territorial tax, and the IRS and the Joint Committee on Taxation count it with Puerto Rico as a territory with its own tax law, not a mirror code one.13,14,15

Rev. Proc. 2020-17 exempts an eligible individual16 for a retirement trust established under the laws of a foreign jurisdiction that meets its conditions.17,18

Whether a U.S. territory is a foreign jurisdiction is not settled, and no IRS guidance answers it. For it: the revenue procedure is written for trusts that are foreign for U.S. tax purposes, which a territory's trusts are;17,4 the Code treats a company organized under a territory's law as foreign, because only the States and the District of Columbia are the United States, and the Joint Committee on Taxation says entities organized there are generally foreign persons;19,20,21 the IRS's examination manual says the territories are generally treated as foreign for U.S. tax purposes unless the Code says otherwise;22 and the Form 8938 reporting the revenue procedure gives as a reason for the exemption counts an account at a territory's financial institution as a foreign asset.23,24 Against it: the revenue procedure and the 2024 preamble explain the exemption by the restrictions imposed under the laws of the country where the trust is established,25,26 and a territory is not a country. The Code names foreign countries and U.S. possessions separately, and Treasury defines a foreign country as territory under another government's sovereignty.27,28 The FBAR rules count the territories as part of the United States,29 and a bona fide resident of a territory leaves accounts at its own institutions off Form 8938,30 so the duplicate reporting the revenue procedure relies on may not exist for them. The 2024 proposal deals with territory trusts in an exception of their own, by the filer's residence and only for some territories.11 The proposed regulations' exemption for retirement and savings trusts uses the same words as the revenue procedure, so the same doubt applies to it.31 Until the IRS says, the cautious course is not to rely on either exemption for a trust in a U.S. territory, and to report it in full.

Treaty provisions

No treaty: American Samoa is a U.S. territory.

No treaty: the United States has no income tax treaty with its own territories, and federal tax rules apply to them in a way different from both the States and foreign countries.32 The IRS has a tax coordination agreement with each of the five territories, which resolves inconsistent treatment between the two tax systems;33 no guidance says one changes Forms 3520 and 3520-A.

3520/3520-A treatment

No Part I. Part II only if it is a §402(b) trust. Cautious course: Part III for payouts.

No Part I: no contribution to a plan trust described in §402(b) or §404(a)(4) is a Part I event.34,5 If the Fund is a trust, Part II and Form 3520-A apply only if it is a §402(b) trust and your contributions exceed the government's;8,35 payouts go on Part III on the cautious course, unless it is a §402(b) trust and you report them as compensation.36,37,38 No Form 4970: payouts from an employees' trust are not taxed under the trust distribution rules.39

These apply to you only if you are a U.S. person: a U.S. citizen, or a resident by green card or the substantial presence test. A U.S. national who is not a citizen, as most people born in American Samoa are, and has neither, is a nonresident alien and files none of these.40,41,42 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.43,44

Private employer plans under the Samoan Income Tax Act

Part I
No
Part II + Form 3520-A
DependsOnly for a plan that fails §401(a), once your contributions exceed your employer's
Part III
DependsPayouts, on the cautious course
Form 4970
No

For a U.S. citizen or resident. A U.S. national who is not a citizen and has no green card is usually a nonresident alien and files none of these.

What it is

Employers in American Samoa set up retirement plans under the Samoan Income Tax Act, the U.S. income tax as it stood on December 31, 2000, adopted as American Samoa's own.13 The employer pays in, and employees may too.

Trust classification

A foreign trust: American Samoa's courts are not U.S. courts for the court test.

A foreign trust. A trust is domestic only if a U.S. court can exercise primary supervision over it and U.S. persons control its substantial decisions, and the courts of a territory are not courts within the United States for that test,3,4 so a trust supervised by American Samoa's courts is a foreign trust.

§402(b) analysis

§402(b) only for a plan that fails §401(a); otherwise its participants are taxed as in a qualified plan.

A plan that would be qualified but for its trust's location is treated, for §402, as if its trust were exempt, so its participants are taxed as in a qualified plan and §402(b) does not apply;7 that is the trust §404(a)(4) describes.5 A plan that fails §401(a) in other ways is a §402(b) employees' trust: your employer's contributions are U.S. income to you as they vest, you are not treated as owner of the part they fund, and once your own contributions exceed your employer's you are treated as owner of the part yours fund.6,45,46,8 A plan that meets only the 2000 Code may fail today's §401(a).

Exemption analysis

As for the Government Employees' Retirement Fund above.

No mirror-code exception, and Rev. Proc. 2020-17 is not settled for a territory.12,17

Treaty provisions

No treaty: American Samoa is a U.S. territory.

No treaty: the United States has no income tax treaty with its own territories.32

3520/3520-A treatment

No Part I. Part II only for a plan that fails §401(a). Cautious course: Part III for payouts.

No Part I: transfers to a trust described in §402(b) or §404(a)(4) are excepted.34,5 No Part II or Form 3520-A for a plan that meets §401(a) apart from its trust's location: §679 does not apply to transfers to it.47,48 For a plan that fails §401(a), Part II and Form 3520-A each year once your own contributions exceed your employer's.8,35 Payouts go on Part III unless the plan is a §402(b) trust and you report them as compensation, so the cautious course for a plan that meets §401(a) is to report its payouts on Part III.36,37,38 No Form 4970: payouts from an employees' trust are not taxed under the trust distribution rules.39

These apply to you only if you are a U.S. person: a U.S. citizen, or a resident by green card or the substantial presence test. A U.S. national who is not a citizen, as most people born in American Samoa are, and has neither, is a nonresident alien and files none of these.40,41,42 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.43,44

Tax-deferred individual plans

No individual retirement account under American Samoa's own law was found for this guide; the Samoan Income Tax Act adopts the U.S. income tax as it stood on December 31, 2000,13 and an account set up there with a local trustee would be reported as any foreign trust only you pay into: full reporting, unless an exemption applies.47,49,35,36

Trusts and other structures

American Samoa trusts

Part I
DependsA U.S. person who funds it
Part II + Form 3520-A
DependsA U.S. person treated as owner
Part III
DependsA U.S. person who receives a distribution
Form 4970
DependsAccumulation distributions from a non-grantor trust

For U.S. persons. A U.S. national who is not a citizen and has no green card is usually a nonresident alien, not a U.S. person.

What it is

A trust set up under American Samoa law, during someone's life or by their will, in which a trustee holds investments or a business for family members.2 If the trustee mainly runs a business for profit rather than holding property for the family, U.S. law may classify the arrangement as a business entity rather than a trust.50

Trust classification

A foreign trust: American Samoa's courts are not U.S. courts for the court test.

Usually an ordinary trust, because the trustee holds property for the beneficiaries,2 and a foreign trust. A trust is domestic only if a U.S. court can exercise primary supervision over it and U.S. persons control its substantial decisions, and the courts of a territory are not courts within the United States for that test,3,4 so a trust supervised by American Samoa's courts is a foreign trust.

Owner analysis

A U.S. person who funds it is owner when it has a U.S. beneficiary; a non-citizen national usually is not a U.S. person.

Who is treated as owner decides who files Part II and Form 3520-A. A U.S. person who transfers property to the trust is treated as owner of the part it funds for any year in which the trust has a U.S. beneficiary,47 and a U.S. citizen living in American Samoa is a U.S. person, as is any family member who is a U.S. citizen or resident.51 Someone who funds the trust while not a U.S. resident and becomes one within 5 years is treated, for this rule and for Part I, as transferring that part of the trust on the day their U.S. residency starts.52 A settlor who is not a U.S. person is treated as owner only if they can revoke the trust alone, or if only they or their spouse can receive distributions during their life.53 Otherwise no one is owner, and the trust is taxed as a separate, non-grantor trust.54 Most people born in American Samoa are U.S. nationals but not citizens,41,55 and a national who is neither a citizen nor a resident by green card or substantial presence is a nonresident alien;40,42 days in American Samoa do not count toward the substantial presence test.56 Such a settlor is a foreign person for these rules.

Treaty provisions

No treaty: American Samoa is a U.S. territory.

No treaty: the United States has no income tax treaty with its own territories.32

3520/3520-A treatment

Part I for whoever funds it, Part II and Form 3520-A for an owner, Part III for whoever receives a distribution.

A U.S. person who transfers property to the trust files Part I for that year.49 A U.S. owner files Part II and makes sure Form 3520-A is filed, or files a substitute, each year.35,57 A U.S. beneficiary who receives a distribution files Part III for that year.36 A distribution from a non-grantor trust that carries out income the trust kept in earlier years is an accumulation distribution, taxed with an interest charge on Form 4970.58 Owing no U.S. tax on the trust's income does not remove any of these: transfers and distributions are reportable whether or not they have U.S. income tax consequences.59 Rev. Proc. 2020-17 does not apply: it covers only retirement trusts and medical, disability, or educational savings trusts.60

Leaving American Samoa income out of U.S. income does not remove any of these.10 A U.S. national who is not a citizen and is not a resident is not a U.S. person and files none of them.51,40 FBAR (FinCEN Form 114) and Form 8938 are separate and may also apply.61

Gifts and inheritances

You report gifts and bequests on Form 3520 Part IV when, in one tax year, you receive more than $100,000 from a nonresident alien individual or a foreign estate, counting gifts from persons related to them together,62 or more than $20,116 (for 2025) or $20,573 (for 2026) from foreign corporations or foreign partnerships.63,64 Tuition someone pays directly to a school for you, and payments made directly to a medical provider for your care, are not foreign gifts and do not count.65,66 If you rely on the 2024 proposed regulations, the $100,000 is adjusted for inflation, to about $201,160 for 2025 and $205,730 for 2026,67 and gifts from a covered expatriate (a former U.S. citizen or long-term resident covered by section 877A) received from January 14, 2025 are reported once the year's total passes $19,000.68 A gift that is late or left off Part IV is charged 5% of its amount for each month the failure continues, up to 25%.69 Since May 2026 the IRS's own procedures do not assess that penalty when a late Form 3520 reporting gifts arrives, but the law is unchanged and an examination can still assert it.70

The Samoan Income Tax Act adopts the U.S. income tax, not the U.S. estate and gift taxes,13 and no estate tax or gift tax of American Samoa's own was found for this guide, which is not confirmed. Most people born in American Samoa are U.S. nationals, not citizens,41 and a national who is not a citizen and has no green card is a nonresident alien for U.S. tax,40,71 so a gift from such a relative counts toward the $100,000 Part IV threshold.62 Part IV turns on whether the giver is a nonresident alien. A U.S. citizen living in American Samoa is not one, so a gift from them is not reported on Part IV.62,40 A giver who is not a U.S. citizen and has no green card can be one even after years in American Samoa, because days in a territory do not count toward the substantial presence test.56 For the U.S. gift and estate taxes, a citizen living in a territory whose citizenship came only from the territory, by birth, residence, or its citizenship, is treated as a nonresident not a citizen,72,73 which changes the giver's own U.S. gift tax, not your Part IV.

Whether the estate of someone who lived in American Samoa is a foreign estate for Part IV is not settled. A foreign estate is one whose income from outside the United States is not in its U.S. gross income,74 and no IRS guidance applies that to an estate administered in a territory. The cautious course for a bequest of more than $100,000 in a year from such an estate is to report it on Part IV.62

Penalties and practical notes

A Form 3520 that is late, incomplete, or wrong is penalized at the greater of $10,000 or 35% of the amount involved: the value transferred, for a transfer missing from Part I, or the distributions received, for a distribution missing from Part III.75,76 When a trust's Form 3520-A is late or incomplete, the U.S. owner owes the greater of $10,000 or 5% of the trust assets the owner is treated as owning at the end of the year.77 If a failure continues more than 90 days after the IRS mails a notice, $10,000 more is charged for each 30 days. In all, once the IRS can tell the amount involved, the penalties for one failure are cut to that amount and any excess is refunded, so a $7,000 distribution left off Part III costs no more than $7,000.78,79,80 No penalty applies to a failure due to reasonable cause and not willful neglect, and a foreign law that forbids disclosing the information is not reasonable cause.81 A late or incomplete Part I, II, or III, or Form 3520-A, also keeps the IRS's time to assess the related tax open until 3 years after the information is filed: for the whole income tax return, or, if the failure had reasonable cause, only the items it relates to.82

The first question for anyone in American Samoa is whether they are a U.S. person: a U.S. national who is not a citizen and has no green card is usually a nonresident alien and has no Form 3520 to file for their own trusts and plans, while a citizen or resident does.40,51 American Samoa has its own tax system,83 and a resident may have to file a U.S. income tax return as well as American Samoa's,15 but Form 3520 has its own due date, not tied to the income tax return's: the 15th day of the 4th month after your tax year ends, or the 15th day of the 10th month with an extension of your income tax return.84,85 A citizen or resident who lives, and has a place of business, outside the United States and Puerto Rico can have until June 15, with a statement attached, and a resident of American Samoa appears to qualify, because the United States in a geographical sense is only the States and the District of Columbia.86,20 Form 3520 goes to the IRS at Ogden, Utah, not to the American Samoa Government Tax Office.87

A trust's U.S. tax year is the calendar year.88 Amounts in American Samoa are in U.S. dollars, so they need no converting for Form 3520-A, which must be in English and in U.S. currency.89 For an account you own, the figures for a substitute Form 3520-A are its value and income from its statements; the substitute is attached to your Form 3520 and due on the same date.57,90

An account in American Samoa is not an account in a foreign country for the FBAR, because FinCEN's rules count the territories as part of the United States.91,29 Form 8938 is different: it counts an account at a financial institution organized in a territory as a foreign asset, but a bona fide resident of the territory leaves accounts at its own institutions off.24,30

All notes (91)
  1. GAO-24-105862 (2024): the public pension plans of the other four territories, the American Samoa Government Employees' Retirement Fund among them“The plans are the public pension plans for the other four U.S. territories (American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and Puerto Rico)”
  2. Treas. Reg. §301.7701-4(a)“an arrangement created either by a will or by an inter vivos declaration whereby trustees take title to property for the purpose of protecting or conserving it for the beneficiaries”
  3. Treas. Reg. §301.7701-7(a)(1)-(2): a trust is domestic only if it meets both the court test and the control test“The term foreign trust means any trust other than a domestic trust.”
  4. Treas. Reg. §301.7701-7(c)(3)(ii)“a court within a territory or possession of the United States or within a foreign country is not a court within the United States”
  5. 26 U.S.C. §404(a)(4)“If a stock bonus, pension, or profit-sharing trust would qualify for exemption under section 501(a) except for the fact that it is a trust created or organized outside the United States”
  6. 26 U.S.C. §402(b)(1)“Contributions to an employees' trust made by an employer ... shall be included in the gross income of the employee in accordance with section 83”
  7. 26 U.S.C. §402(d)“which would qualify for exemption from tax under section 501(a) except for the fact that it is a trust created or organized outside the United States shall be treated as if it were a trust exempt from tax under section 501(a)”
  8. Treas. Reg. §1.402(b)-1(b)(6)“contributions made by an employee are not incidental when compared to contributions made by the employer if the employee's total contributions as of any date exceed the employer's total contributions on behalf of the employee as of such date”
  9. Treas. Reg. §1.402(b)-1(a)(2): where the employer's contributions for an employee are not known, an amount worked out by a formula or by recognized actuarial principles“is not determinable or for any other reason is not known”
  10. 26 U.S.C. §931(a), (c): bona fide residents of Guam, American Samoa, and the Northern Mariana Islands leave income from there out of U.S. gross income“In the case of an individual who is a bona fide resident of a specified possession during the entire taxable year, gross income shall not include”
  11. Prop. Treas. Reg. §1.6048-5(e), 89 Fed. Reg. 39,449 (May 8, 2024): for a trust located in a mirror code possession, to the extent the person is a bona fide resident of it (§1.937-1(b))“Sections 6048(a) through 6048(c) do not apply to a trust located in a mirror code possession to the extent the responsible party”
  12. Prop. Treas. Reg. §1.6048-5(e) (mirror code possession)“a mirror code possession is a possession of the United States where, under the income tax system of the possession, the income tax liability of the residents of the possession is determined by reference to the income tax laws of the United States as if the possession were the United States”
  13. A.S.C.A. §11.0403(a)-(b) (the Samoan Income Tax Act)“The income tax and the income tax rules in force in the United States of America in effect on December 31, 2000, where not clearly inapplicable or incompatible with the intent of this section, are adopted by American Samoa, and shall be deemed to impose a separate Territorial income tax”
  14. IRM 4.71.21.3 (02-16-2024), Key Definitions: Mirror Code System of Taxation“The territories that use a Mirror Code System of Taxation are the USVI, Guam and CNMI.”
  15. Joint Committee on Taxation, JCX-132-15 (Sept. 28, 2015): American Samoa and Puerto Rico“are non-mirror Code possessions. These two territories have their own internal tax laws, and a resident of American Samoa or Puerto Rico may be required to file an income tax return with both the territory of residence and the United States.”
  16. Rev. Proc. 2020-17, §5.02 (eligible individual)“is compliant (or comes into compliance) with all requirements for filing a U.S. federal income tax return ... and to the extent required under U.S. tax law, has reported as income any contributions to, earnings of, or distributions from, an applicable tax-favored foreign trust”
  17. Rev. Proc. 2020-17, §5.03 (and §5.04, in the same words)“a foreign trust for U.S. tax purposes that is created, organized, or otherwise established under the laws of a foreign jurisdiction (the trust's jurisdiction)”
  18. Rev. Proc. 2020-17, §5.03“to operate exclusively or almost exclusively to provide, or to earn income for the provision of, pension or retirement benefits and ancillary or incidental benefits”
  19. 26 U.S.C. §7701(a)(4)-(5): a corporation or partnership is foreign unless created or organized in the United States or under the law of the United States or of any State“means created or organized in the United States or under the law of the United States or of any State”
  20. 26 U.S.C. §7701(a)(9)“The term “United States” when used in a geographical sense includes only the States and the District of Columbia.”
  21. Joint Committee on Taxation, JCX-132-15 (Sept. 28, 2015)“Entities organized in U.S. possessions are generally treated as foreign persons.”
  22. IRM 4.71.21.4 (07-15-2019), Introduction to Retirement Plans Maintained in U.S. Territories (the IRS's examination procedures, not a ruling)“are generally treated as foreign for U.S. tax purposes, unless otherwise specified in the Code or related statutes”
  23. Rev. Proc. 2020-17, §3 (why the exemption is given)“may be required under section 6038D to separately report information about their interests in accounts held by, or through, these trusts”
  24. Treas. Reg. §1.6038D-3(a)(2) (Form 8938)“A specified foreign financial asset includes a financial account maintained by a financial institution that is organized under the laws of a U.S. possession.”
  25. Rev. Proc. 2020-17, §3 (why the exemption is given)“which are imposed under the laws of the country in which the trust is established”
  26. Preamble to the proposed regulations, 89 Fed. Reg. 39,449 (May 8, 2024), on proposed §1.6048-5(b)“under the laws of the country in which they are established”
  27. 26 U.S.C. §901(b)(1) (taxes paid to foreign countries and to possessions, named separately)“to any foreign country or to any possession of the United States”
  28. Treas. Reg. §1.911-2(g)-(h): for §911 the United States includes the possessions, and a foreign country is territory under another government“The term “foreign country” when used in a geographical sense includes any territory under the sovereignty of a government other than that of the United States.”
  29. 31 C.F.R. §1010.100(hhh) (the United States, for FinCEN's rules, the FBAR included)“the Territories and Insular Possessions of the United States”
  30. Treas. Reg. §1.6038D-7(c)(1)-(4): a bona fide resident of a possession leaves off Form 8938 accounts at, and interests in, entities organized in that possession“A financial account maintained by a financial institution organized under the laws of the U.S. possession of which the specified individual is a bona fide resident”
  31. Prop. Treas. Reg. §1.6048-5(b)(2) (and (b)(3)-(4), in the same words)“means a foreign trust that is created, organized, or otherwise established under the laws of a foreign jurisdiction (the trust's jurisdiction)”
  32. Joint Committee on Taxation, Federal Tax Law and Issues Related to the Commonwealth of Puerto Rico (JCX-132-15), Sept. 28, 2015“Federal tax rules apply to the territories in a manner that is different from their application in relation to both the States and foreign countries.”
  33. IRM 4.71.21.4 (07-15-2019), Tax Coordination Agreements and Mutual Agreement Procedures“Tax Coordination Agreements allow the U.S. Competent Authorities and the relevant territory to resolve, by mutual agreement, inconsistent tax treatment between the two jurisdictions.”
  34. 26 U.S.C. §6048(a)(3)(B)(ii)“Subparagraph (A) shall not apply with respect to a trust which is ... described in section 402(b), 404(a)(4), or 404A”
  35. 26 U.S.C. §6048(b) (U.S. owner of a foreign trust: Form 3520 Part II and Form 3520-A)
  36. 26 U.S.C. §6048(c)(1) (distributions, Form 3520 Part III)“If any United States person receives (directly or indirectly) during any taxable year of such person any distribution from a foreign trust, such person shall make a return”
  37. Instructions for Form 3520 (Rev. December 2025), Exceptions To Filing“Distributions from foreign trusts that are taxable as compensation for services rendered (within the meaning of section 672(f)(2)(B) and its regulations), so long as the recipient reports the distribution as compensation income on its applicable federal income tax return.”
  38. Treas. Reg. §1.672(f)-3(c)(1)(i): compensatory trusts“A nonexempt employees' trust described in section 402(b)”
  39. Rev. Rul. 2007-48 (amplifying Rev. Rul. 74-299), on a nonexempt employees' trust“The taxation of the distributions is not governed by the provisions of § 662.”
  40. 26 U.S.C. §7701(b)(1)(B); a resident is a green card holder or someone who meets the substantial presence test (§7701(b)(1)(A))“An individual is a nonresident alien if such individual is neither a citizen of the United States nor a resident of the United States”
  41. 8 U.S.C. §1408(1)“the following shall be nationals, but not citizens, of the United States at birth: (1) A person born in an outlying possession of the United States on or after the date of formal acquisition of such possession”
  42. IRS Publication 519 (2025): U.S. nationals who are not citizens file as nonresident aliens“Only nonresident aliens who are U.S. nationals; residents of Canada, Mexico, or South Korea; or students and business apprentices from India who qualify for benefits under Article 21(2) of the income tax treaty with India can claim the CTC.”
  43. Rev. Proc. 2020-17, §3“This revenue procedure does not affect any reporting obligations under section 6038D or under any other provision of U.S. law, including the requirement to file FinCEN Form 114”
  44. Instructions for Form 3520 (Rev. December 2025), Exceptions To Filing and Additional Reporting“The exemptions from foreign trust information reporting described in Rev. Proc. 2014-55, Rev. Proc. 2020-17, and the proposed regulations under section 6048 do not affect any other reporting obligations.”
  45. Treas. Reg. §1.402(b)-1(a)(1)“but only to the extent that the employee's interest in such contribution is substantially vested at the time the contribution is made”
  46. 26 U.S.C. §402(b)(3)“A beneficiary of any trust described in paragraph (1) shall not be considered the owner of any portion of such trust under subpart E”
  47. 26 U.S.C. §679(a)(1)“A United States person who directly or indirectly transfers property to a foreign trust (other than a trust described in section 6048(a)(3)(B)(ii)) shall be treated as the owner ... if for such year there is a United States beneficiary of any portion of such trust”
  48. Treas. Reg. §1.679-4(a)(2): §679 does not apply to“Any transfer of property to a foreign trust described in sections 402(b), 404(a)(4), or 404A”
  49. 26 U.S.C. §6048(a)(3)(A)(ii) (reportable events, Form 3520 Part I)“the transfer of any money or property (directly or indirectly) to a foreign trust by a United States person”
  50. Treas. Reg. §301.7701-4(b)“generally are created by the beneficiaries simply as a device to carry on a profit-making business”
  51. 26 U.S.C. §7701(a)(30)(A) (a United States person)“a citizen or resident of the United States”
  52. 26 U.S.C. §679(a)(4)(A)“If a nonresident alien individual has a residency starting date within 5 years after directly or indirectly transferring property to a foreign trust, this section and section 6048 shall be applied as if such individual transferred to such trust on the residency starting date”
  53. 26 U.S.C. §672(f)(1)-(2)(A): a foreign person is treated as owner only of a trust they can revoke alone, or one that can pay only them or their spouse during their life“this subpart shall apply only to the extent such application results in an amount (if any) being currently taken into account ... in computing the income of a citizen or resident of the United States or a domestic corporation”
  54. 26 U.S.C. §671“Any remaining portion of the trust shall be subject to subparts A through D.”
  55. 8 U.S.C. §1101(a)(29)“The term “outlying possessions of the United States” means American Samoa and Swains Island.”
  56. Treas. Reg. §301.7701(b)-1(c)(2)(ii): for the residence tests, the United States is the States and the District of Columbia“It does not include the possessions and territories of the United States”
  57. Instructions for Form 3520-A (Rev. December 2025), When To File“If the foreign trust fails to file Form 3520-A, the U.S. owner must file a substitute Form 3520-A”
  58. 26 U.S.C. §§665-668: an accumulation distribution from a trust that is not a grantor trust is taxed as if paid in the years the income was earned (§667), with an interest charge for a foreign trust (§668); figured on Form 4970
  59. Preamble to the proposed regulations, 89 Fed. Reg. 39,449 (May 8, 2024), on proposed §1.6048-6(b): a transfer or distribution is reportable“whether or not there are any U.S. income tax consequences associated with the transfer or distribution”
  60. Rev. Proc. 2020-17, §1“certain tax-favored foreign retirement trusts and certain tax-favored foreign nonretirement savings trusts, as described in sections 5.03 and 5.04”
  61. Instructions for Form 3520 (Rev. December 2025), Additional Reporting and Tax Information“You may be required to file Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR). In addition, you may be required to file Form 8938”
  62. Instructions for Form 3520 (Rev. December 2025), Who Must File, item 4“More than $100,000 from a nonresident alien individual or a foreign estate (including foreign persons related to that nonresident alien individual or foreign estate) that you treated as gifts or bequests”
  63. Rev. Proc. 2024-40, §3.48 (taxable years beginning in 2025)“exceeds $20,116”
  64. Rev. Proc. 2025-32, §4.47 (taxable years beginning in 2026)“exceeds $20,573”
  65. 26 U.S.C. §6039F(b)“Such term shall not include any qualified transfer (within the meaning of section 2503(e)(2))”
  66. 26 U.S.C. §2503(e)(2); Treas. Reg. §25.2503-6(b)(2) and (c), Examples (3)-(4): the payment goes straight to the school or the provider, and reimbursing you does not count“any amount paid on behalf of an individual ... as tuition to an educational organization ... for the education or training of such individual, or ... to any person who provides medical care ... with respect to such individual as payment for such medical care”
  67. Prop. Treas. Reg. §1.6039F-1(c)(2)(i)(A) and (v), 89 Fed. Reg. 39,449 (May 8, 2024): the adjustment runs from 1995, as section 6039F(d)'s does for the $10,000 that is $20,116 for 2025 and $20,573 for 2026, so the figures here are ten times those“are increased by an amount equal to the product of the amounts specified in such paragraphs and the cost-of-living adjustment for the taxable year of the gift under section 1(f)(3)”
  68. Prop. Treas. Reg. §1.6039F-1(c)(2)(ii) and (h)(2), for covered gifts received from the day the final section 2801 regulations were published, January 14, 2025 (90 Fed. Reg. 3,376); the section 2503(b) amount is $19,000 for 2025 and 2026 (Rev. Proc. 2024-40, §3.43(1); Rev. Proc. 2025-32, §4.42(1) and (3))“if the aggregate amount of covered gifts and bequests received by the U.S. person during the calendar year does not exceed the section 2801(c) amount, which is the dollar amount of the per-donee exclusion in effect under section 2503(b)”
  69. 26 U.S.C. §6039F(c)(1)(B)“an amount equal to 5 percent of the amount of such foreign gift for each month for which the failure continues (not to exceed 25 percent of such amount in the aggregate)”
  70. IRM 21.8.2.19.2 (05-01-2026), on answering inquiries; the penalty itself is unchanged in §6039F(c), and the examiners' penalty section, IRM 20.1.9.10, still covers it“IRS is no longer assessing penalties at filing on late Forms 3520 reporting foreign gifts and bequests in Part IV.”
  71. Instructions for Form 1040-NR (2025), U.S. national“U.S. nationals include American Samoans and Northern Mariana Islanders who chose to become U.S. nationals instead of U.S. citizens.”
  72. 26 U.S.C. §2501(c) (gift tax)“but only if such donor acquired his United States citizenship solely by reason of (1) his being a citizen of such possession of the United States, or (2) his birth or residence within such possession of the United States”
  73. 26 U.S.C. §2209 (estate tax)“be considered a “nonresident not a citizen of the United States” within the meaning of that term wherever used in this title, but only if such person acquired his United States citizenship solely by reason of”
  74. 26 U.S.C. §7701(a)(31)(A) (foreign estate)“The term “foreign estate” means an estate the income of which, from sources without the United States which is not effectively connected with the conduct of a trade or business within the United States, is not includible in gross income under subtitle A.”
  75. 26 U.S.C. §6677(a)“the greater of $10,000 or 35 percent of the gross reportable amount”
  76. 26 U.S.C. §6677(c)(1), (3) (gross reportable amount)“the gross value of the property involved in the event ... the gross amount of the distributions”
  77. Instructions for Form 3520-A (Rev. December 2025), Penalties; 26 U.S.C. §6677(b)“The U.S. owner is subject to an initial penalty equal to the greater of $10,000 or 5% of the gross value ... of the portion of the trust's assets treated as owned by the U.S. person at the close of that tax year”
  78. 26 U.S.C. §6677(a)“$10,000 for each 30-day period (or fraction thereof) during which such failure continues after the expiration of such 90-day period. At such time as the gross reportable amount with respect to any failure can be determined by the Secretary, any subsequent penalty imposed under this subsection with respect to such failure shall be reduced as necessary to assure that the aggregate amount of such penalties do not exceed the gross reportable amount (and to the extent that such aggregate amount already exceeds the gross reportable amount the Secretary shall refund such excess to the taxpayer).”
  79. 26 U.S.C. §6677(b)(2): for Form 3520-A, subsection (a), its limit included, applies at 5%“subsection (a) shall be applied by substituting “5 percent” for “35 percent””
  80. IRM 20.1.9.13.4 (01-29-2021), Penalty Computation“In cases where the gross reportable amount is less than $10,000 the initial penalty is equal to the gross reportable amount.”
  81. 26 U.S.C. §6677(d)“No penalty shall be imposed by this section on any failure which is shown to be due to reasonable cause and not due to willful neglect. The fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the required information is not reasonable cause.”
  82. 26 U.S.C. §6501(c)(8)(A)-(B): if the failure was due to reasonable cause and not willful neglect, the rule applies only to the items related to it“the time for assessment of any tax imposed by this title with respect to any tax return, event, or period to which such information relates shall not expire before the date which is 3 years after the date on which the Secretary is furnished the information required to be reported under such section”
  83. IRS Publication 570 (2025), American Samoa“American Samoa has its own separate and independent tax system.”
  84. Instructions for Form 3520 (Rev. December 2025), When and Where To File: the 15th day of the 4th month after the tax year“This may differ from and is not tied to the due date of the U.S. person's income tax return.”
  85. Instructions for Form 3520 (Rev. December 2025), When and Where To File“and are granted an extension of time to file your income tax return, the due date for filing Form 3520 is no later than the 15th day of the 10th month (October 15)”
  86. Instructions for Form 3520 (Rev. December 2025), When and Where To File: June 15, with a statement attached“You live outside of the United States and Puerto Rico and your place of business or post of duty is outside the United States and Puerto Rico.”
  87. Instructions for Form 3520 (Rev. December 2025), When and Where To File“Internal Revenue Service Center P.O. Box 409101 Ogden, UT 84409”
  88. 26 U.S.C. §644(a)“the taxable year of any trust shall be the calendar year”
  89. Instructions for Form 3520-A (Rev. December 2025), General Instructions, Note: English, and U.S. currency“All information provided must be in English. All amounts reported must be in U.S. currency.”
  90. Instructions for Form 3520 (Rev. December 2025), When and Where To File“If you are the U.S. owner of a foreign trust, the due date for filing a substitute Form 3520-A is the due date of your Form 3520.”
  91. 31 C.F.R. §1010.350(a) (FBAR: accounts in a foreign country)“a bank, securities, or other financial account in a foreign country”

References

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Last reviewed October 26, 2026