← All countries
🇬🇺

Guam

Moderate

Guam trusts, the Government of Guam's retirement plans among them, are foreign trusts for Forms 3520 and 3520-A, and Guam's citizens are U.S. persons, though their income tax return goes to Guam. A bona fide resident who relies on the 2024 proposed regulations reports nothing for a trust located in Guam; otherwise the cautious course is to file.

Tax-deferred employer plans

Government of Guam Defined Contribution Retirement System (401(a) plan)

Part I
No
Part II + Form 3520-A
No
Part III
DependsPayouts, on the cautious course
Form 4970
No

If the plan's fund is a trust, and on our reading of your required 6.2% as the government's. A bona fide resident of Guam who relies on the proposed regulations files none of these for a trust located there.

What it is

The Government of Guam's defined contribution plan, a 401(a) plan, is mandatory for the employees it covers: each pays in 6.2% of pay and the government matches it in full,1 and the government's contributions vest after 5 years of service.2 Since January 1, 2024, new and reemployed employees have 30 days from hire to stay in it or move to the Defined Benefit 1.75 plan.3

Trust classification

A foreign trust, if its fund is a trust: Guam's courts are not U.S. courts for the court test.

If the plan's fund is a trust, an arrangement in which trustees hold property for beneficiaries,4 it is 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,5,6 so a trust supervised by Guam's courts is a foreign trust. The Government of Guam describes its plans as governmental plans under §§414(d) and 401(a) and the same provisions of the Guam Territorial Income Tax,7 but a qualified trust under §401(a) is one created or organized in the United States.8

§402(b) analysis

Read as a plan that would qualify but for its trust's location; if not, a §402(b) trust in which you own no part.

We read it as a plan that would qualify under §401(a) but for its trust's location: its participants are then taxed under §402 as in a qualified plan, through §402(d), and §402(b) does not apply.9,10 If it does not meet §401(a), it is a §402(b) employees' trust. Your 6.2% is required, not chosen, and the IRS's reading of a similar fund treats contributions withheld from pay without the employee's election as the employer's;11,1 read that way, your contributions never exceed the government's, and you are not treated as owner of any part.12,13 A bona fide resident of Guam files the income tax return for all of this with Guam, not the IRS.14

Exemption analysis

Proposed regulations: none for a bona fide resident who relies on them. Rev. Proc. 2020-17: not settled.

If you are a bona fide resident of Guam and rely on the 2024 proposed regulations, which you may do now if you apply them in full and consistently with related persons,15 sections 6048(a) to (c) do not apply to a trust located in a mirror code possession to the extent you are a bona fide resident there.16 Guam is a mirror code possession: the income tax there is the U.S. income tax, read with Guam in place of the United States.17,18 A trust is located there if a court there can exercise primary supervision over it and one or more bona fide residents control all its substantial decisions,19 and a bona fide resident is someone present there at least 183 days in the year, with no tax home or closer connection elsewhere.20 The app asks both questions when you rely on the proposed regulations. Without relying, the cautious course is to keep filing: the proposal would not need this exception if section 6048 did not already reach bona fide residents.16

Otherwise only Rev. Proc. 2020-17 could exempt the plan, for an eligible individual,21,22 and it covers trusts established under the laws of a foreign jurisdiction.23

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;23,6 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;24,25,26 the IRS's examination manual says the territories are generally treated as foreign for U.S. tax purposes unless the Code says otherwise;27 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.28,29 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,30,31 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.32,33 The FBAR rules count the territories as part of the United States,34 and a bona fide resident of a territory leaves accounts at its own institutions off Form 8938,35 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.16 The proposed regulations' exemption for retirement and savings trusts uses the same words as the revenue procedure, so the same doubt applies to it.36 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: Guam 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.37 The IRS has a tax coordination agreement with each of the five territories, which resolves inconsistent treatment between the two tax systems;38 no guidance says one changes Forms 3520 and 3520-A.

3520/3520-A treatment

No Part I, Part II, or Form 3520-A. 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.39,40 No Part II or Form 3520-A: §679 does not apply to transfers to such a trust, and the part your required contributions fund is read as the government's.41,12,11 Payouts go on Part III unless the plan is a §402(b) trust and you report them as compensation, so the cautious course is to report them on Part III.42,43,44 No Form 4970: payouts from an employees' trust are not taxed under the trust distribution rules.45

A bona fide resident of Guam who relies on the proposed regulations files none of these for a trust located in Guam.16 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.46,47

Government of Guam defined benefit plans

Part I
No
Part II + Form 3520-A
No
Part III
DependsPayouts, on the cautious course
Form 4970
No

If the fund is a trust, and on our reading of your required contributions as the government's. A bona fide resident of Guam who relies on the proposed regulations files none of these for a trust located there.

What it is

The Government of Guam Retirement Fund also pays defined benefit pensions: under the pre-1995 defined benefit plan, and under the Defined Benefit 1.75 plan, an alternative benefit structure for employees who would otherwise be in the defined contribution plan and choose it, who pay in 9.5% of pay before tax.48,49,3

Trust classification

A foreign trust, if its fund is a trust.

As for the defined contribution plan above: if the fund is a trust, it is a foreign trust.4,6 The Government of Guam describes the Defined Benefit 1.75 plan as a governmental plan under §§414(d) and 401(a).7

§402(b) analysis

As for the defined contribution plan above.

Read as a plan that would qualify but for its trust's location, or else as a §402(b) trust.9 The 9.5% is required once you choose the plan, and the choice is made once, at hire; the U.S. rules for §401(k) plans, by analogy, do not count such a choice as an election,50,3 so we read it as the government's contribution, as above.11 In a defined benefit plan the employer's contribution for you is often not known, and the regulations then work it out by actuarial methods.51

Exemption analysis

As for the defined contribution plan above.

A bona fide resident of Guam who relies on the proposed regulations reports nothing for a trust located in Guam,16 and Rev. Proc. 2020-17 is not settled for a territory.23

Treaty provisions

No treaty: Guam is a U.S. territory.

No treaty: the United States has no income tax treaty with its own territories.37

3520/3520-A treatment

No Part I, Part II, or Form 3520-A. 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.39 No Part II or Form 3520-A: §679 does not apply to transfers to such a trust, and the part your required contributions fund is read as the government's.41,11 Payouts go on Part III unless the plan is a §402(b) trust and you report them as compensation, so the cautious course is to report them on Part III.42,43 No Form 4970: payouts from an employees' trust are not taxed under the trust distribution rules.45 A bona fide resident of Guam who relies on the proposed regulations files none of these for a trust located in Guam.16 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.46,47

Government of Guam 457(b) deferred compensation plan

Part I
FileEach year you defer pay, on the cautious course
Part II + Form 3520-A
FileEach year
Part III
FilePayouts
Form 4970
No

The cautious course for a plan funded only by your own deferrals, if its assets are held in trust; no IRS guidance addresses it. A bona fide resident of Guam who relies on the proposed regulations files none of these for a trust located there.

What it is

A deferred compensation plan the Government of Guam offers under §457(b), as Guam applies the Code. Employees hired or reemployed since October 1, 2018 are enrolled automatically at 3% of pay before tax, and may opt out or change the rate; members of the other plans may join.52,48 Only the employee's own deferrals go in.

Trust classification

A foreign trust, if its assets are held in trust in Guam.

If its assets are held in trust under Guam law, it is a foreign trust, as the defined contribution plan above is.4,6 An arrangement whose assets are not held in trust is not reported on Forms 3520 and 3520-A.53

§402(b) analysis

Not settled: no employer money goes in, so the whole account is yours.

No IRS guidance says whether a plan funded only by employees' deferrals is an employees' trust described in §402(b), which reaches an employer's contributions.54 Your deferrals are made at your election: automatic enrollment with a right to opt out still counts as an election under the U.S. rules for §401(k) plans, by analogy,55 and the IRS's reading of a similar fund treats contributions at the employee's election as the employee's own.56 So even read as a §402(b) trust, your contributions exceed your employer's, which are none, and you are treated as owner of the account.13

Exemption analysis

Proposed regulations: none for a bona fide resident who relies on them. Rev. Proc. 2020-17: not settled.

As for the defined contribution plan above: a bona fide resident of Guam who relies on the proposed regulations reports nothing for a trust located in Guam,16 and Rev. Proc. 2020-17 is not settled for a territory.23

Treaty provisions

No treaty: Guam is a U.S. territory.

No treaty: the United States has no income tax treaty with its own territories.37

3520/3520-A treatment

Cautious course: Part I for your deferrals, Part II and Form 3520-A each year, Part III for payouts.

The cautious course, with no IRS guidance: each year's deferrals go on Part I, because the exception for employees' trusts may not reach a trust no employer pays into.53,39 You are treated as owner of the account, so Part II and Form 3520-A are due each year,13,41,57 and payouts go on Part III, lines 24 and 27, as payouts to an owner.42,58 No Form 4970: the account's income is taxed to you each year as its owner.59 A bona fide resident of Guam who relies on the proposed regulations files none of these for a trust located in Guam.16 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.46,47

Private employer plans under the Guam Territorial Income Tax

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

A bona fide resident of Guam who relies on the proposed regulations files none of these for a trust located there.

What it is

Guam employers set up retirement plans under the Internal Revenue Code as Guam applies it, the U.S. income tax laws read with Guam in place of the United States.60 The employer pays in, and employees may too.

Trust classification

A foreign trust: Guam'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,5,6 so a trust supervised by Guam'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;9 that is the trust §404(a)(4) describes.40 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.54,61,12,13

Exemption analysis

As for the defined contribution plan above.

A bona fide resident of Guam who relies on the proposed regulations reports nothing for a trust located in Guam,16 and Rev. Proc. 2020-17 is not settled for a territory.23

Treaty provisions

No treaty: Guam is a U.S. territory.

No treaty: the United States has no income tax treaty with its own territories.37

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.39,40 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.41,62 For a plan that fails §401(a), Part II and Form 3520-A each year once your own contributions exceed your employer's.13,57 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.42,43,44 No Form 4970: payouts from an employees' trust are not taxed under the trust distribution rules.45 A bona fide resident of Guam who relies on the proposed regulations files none of these for a trust located in Guam.16 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.46,47

Tax-deferred individual plans

Individual retirement accounts under the Guam Territorial Income Tax

Part I
FileEach contribution
Part II + Form 3520-A
FileEach year
Part III
FilePayouts
Form 4970
No

On our reading that an IRA set up under Guam law with a Guam trustee is a foreign trust; no IRS guidance addresses it. A bona fide resident who relies on the proposed regulations files none of these for an account located in Guam.

What it is

Because the Code is in force in Guam with Guam in place of the United States, an individual retirement account under Guam law is the U.S. kind, a trust created or organized in the United States for an individual's exclusive benefit, read as created in Guam.60,63 Only the individual pays in. No IRS guidance addresses these accounts.

Trust classification

Read as a foreign trust: a trust created in Guam, not the United States.

We read such an account as a foreign trust: it is not a U.S. IRA, which must be a trust created or organized in the United States,63 and a trust supervised by Guam's courts fails the court test.6 An IRA with a U.S. trustee under U.S. law is a U.S. IRA and is not reported on these forms.

§402(b) analysis

Does not apply: only you pay in.

§402(b) reaches only an employer's contributions to an employees' trust,54 so it does not apply to an account only you pay into.

Exemption analysis

Proposed regulations: none for a bona fide resident who relies on them. Rev. Proc. 2020-17: not settled.

If you are a bona fide resident of Guam and rely on the proposed regulations, nothing is reported for an account located there, as the defined contribution plan block above explains.16,15 Otherwise only Rev. Proc. 2020-17 could apply, and whether it reaches a territory is not settled.23

Treaty provisions

No treaty: Guam is a U.S. territory.

No treaty: the United States has no income tax treaty with its own territories.37

3520/3520-A treatment

Full reporting, unless you are a bona fide resident who relies on the proposed regulations.

On our reading, you are treated as owner of the account, because its income is held for you,64,41 so Part II and Form 3520-A are due each year,57 each contribution is a Part I transfer,53 and payouts go on Part III.42 If the trustee does not file Form 3520-A, you attach a substitute to your Form 3520.65 No Form 4970: the account's income is taxed to you each year as its owner.59 A bona fide resident who relies on the proposed regulations files none of these for an account located in Guam.16 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.46,47

Trusts and other structures

Guam 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

A bona fide resident of Guam who relies on the proposed regulations files none of these for a trust located there.

What it is

A trust set up under Guam law, during someone's life or by their will, in which a trustee holds investments or a business for family members; a trust created by a will stays under the jurisdiction of Guam's Superior Court after the estate is distributed.4,66 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.67

Trust classification

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

Usually an ordinary trust, because the trustee holds property for the beneficiaries,4 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,5,6 so a trust supervised by Guam'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 foreign settlor only in two narrow cases.

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,41 and a U.S. citizen living in Guam is a U.S. person, as is any family member who is a U.S. citizen or resident.68 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.69 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.70 Otherwise no one is owner, and the trust is taxed as a separate, non-grantor trust.71

Treaty provisions

No treaty: Guam is a U.S. territory.

No treaty: the United States has no income tax treaty with its own territories.37

3520/3520-A treatment

As for any foreign trust, unless a bona fide resident relies on the proposed regulations.

A U.S. person who transfers property to the trust files Part I for that year.53 A U.S. owner files Part II and makes sure Form 3520-A is filed, or files a substitute, each year.57,65 A U.S. beneficiary who receives a distribution files Part III for that year.42 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 4970.72 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.73 Rev. Proc. 2020-17 does not apply: it covers only retirement trusts and medical, disability, or educational savings trusts.74

Reporting the trust's income on a Guam return does not file anything with the IRS. A bona fide resident of Guam who relies on the proposed regulations files none of these for a trust located there, to the extent of their own part as transferor, owner, or recipient; a U.S. person living elsewhere still reports.16,19 FBAR (FinCEN Form 114) and Form 8938 are separate and may also apply.75

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,76 or more than $20,116 (for 2025) or $20,573 (for 2026) from foreign corporations or foreign partnerships.77,78 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.79,80 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 2026,81 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 $19,000.82 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%.83 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.84

The statute that makes the U.S. income tax Guam's own lists the income tax, its withholding, and the procedure that applies to it, and not the U.S. estate and gift taxes,85 and no estate tax or gift tax of Guam's own was found for this guide, which is not confirmed. People born in Guam are generally U.S. citizens,86 so a gift from a relative there is usually not a Part IV gift. Part IV turns on whether the giver is a nonresident alien. A U.S. citizen living in Guam is not one, so a gift from them is not reported on Part IV.76,87 A giver who is not a U.S. citizen and has no green card can be one even after years in Guam, because days in a territory do not count toward the substantial presence test.88 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,89,90 which changes the giver's own U.S. gift tax, not your Part IV.

Whether the estate of someone who lived in Guam 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,91 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.76

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.92,93 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.94 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 $7,000.95,96,97 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.98 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.99

Bona fide residents of Guam file their income tax return there, not with the IRS,14 but Form 3520 is an IRS return with its own due date, not tied to the income tax return's: the 15th day of the 4th month after your tax year ends.100 It goes to the IRS at Ogden, Utah, not to Guam's Department of Revenue and Taxation.101 The instructions move the date to June 15 for a citizen or resident who lives, and has a place of business, outside the United States and Puerto Rico, with a statement attached, and to October 15 with an extension of the income tax return.102,103 A resident of Guam appears to meet the June 15 condition, because the United States in a geographical sense is only the States and the District of Columbia,25 but the instructions do not say whether an extension Guam grants for its own return counts, so the cautious course for a resident who files no U.S. return is June 15 at the latest.

A trust's U.S. tax year is the calendar year.104 Amounts in Guam are in U.S. dollars, so they need no converting for Form 3520-A, which must be in English and in U.S. currency.105 For a plan or 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.65,106

An account in Guam is not an account in a foreign country for the FBAR, because FinCEN's rules count the territories as part of the United States.107,34 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.29,35 A bona fide resident of a mirror code territory who files no U.S. income tax return generally files no Form 8938 with the IRS either, but Form 3520 is not tied to the income tax return.108,100

All notes (108)
  1. Government of Guam Retirement Fund, Government of Guam retirement plans overview (2026), 401(a) Defined Contribution Plan“Enrollment and participation is mandatory ... Required 6.2% employee contribution ... The Government of Guam will match 100% of your 6.2% contribution”
  2. GGRF, Government of Guam retirement plans overview (2026), 401(a) Defined Contribution Plan“100% vesting in employer contributions is achieved upon reaching 5 years of Government of Guam”
  3. GGRF, Government of Guam retirement plans overview (2026), DB 1.75 Retirement Plan“As of January 1, 2024, all new and reemployed Government of Guam employees will have a 30-day window from date of hire to remain in the DCRS 401(a) Plan or transfer to the Defined Benefit 1.75 ... Required 9.5% pre-tax employee contribution”
  4. 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”
  5. 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.”
  6. 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”
  7. GGRF, Defined Benefit 1.75 Retirement System Plan, Summary Plan Description (effective Jan. 1, 2024), Introduction“The Plan constitutes a tax-qualified “governmental plan” as described under Sections 414(d) and 401(a) of the United States Internal Revenue Code (and comparable provisions under the Guam Territorial Income Tax Code).”
  8. 26 U.S.C. §401(a)“A trust created or organized in the United States and forming part of a stock bonus, pension, or profit-sharing plan”
  9. 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)”
  10. IRM 4.71.21.7.1 (02-16-2024), Income and Excise Tax Related to USVI Plans“Participants in a plan that would be qualified but for the fact that the trust is sited in the USVI, are nonetheless eligible for the favorable tax treatment permitted under IRC 402 for qualified plan participants (IRC 402(d)).”
  11. IRS Chief Counsel memorandum CC:INTL:FREV-253878-96 (Oct. 10, 1997), with the CC:EBEO memorandum of Sept. 26, 1997, on the Singapore Central Provident Fund (advice, not precedent)“Because nonelective contributions withheld from an employee's salary are not withheld at the election of the employee and are not constructively received by the employee, those contributions are considered employer contributions and are taxable pursuant to § 402(b)(1).”
  12. 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”
  13. 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”
  14. IRS Publication 570 (2025), Bona Fide Resident of Guam“If you are a bona fide resident of Guam during the tax year, file your return with Guam.”
  15. Instructions for Form 3520 (Rev. December 2025), Exceptions To Filing (the regulations were still proposed when these instructions were issued, and the Federal Register shows no final rule as of October 20, 2026)“You may rely on these proposed regulations for any tax year ending after May 8, 2024, and beginning on or before the date that final regulations are published in the Federal Register, provided you and all related persons ... apply the proposed regulations in their entirety and in a consistent manner”
  16. 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”
  17. 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”
  18. 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.”
  19. Prop. Treas. Reg. §1.6048-5(e) (a trust located in a mirror code possession)“a trust is located in a mirror code possession if a court within the mirror code possession is able to exercise primary supervision over the administration of the trust and one or more bona fide residents of the mirror code possession have the authority to control all substantial decisions of the trust”
  20. 26 U.S.C. §937(a) (bona fide resident of a possession: present at least 183 days, with no tax home or closer connection outside it)“who is present for at least 183 days during the taxable year in Guam, American Samoa, the Northern Mariana Islands, Puerto Rico, or the Virgin Islands”
  21. 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”
  22. 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”
  23. 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)”
  24. 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”
  25. 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.”
  26. Joint Committee on Taxation, JCX-132-15 (Sept. 28, 2015)“Entities organized in U.S. possessions are generally treated as foreign persons.”
  27. 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”
  28. 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”
  29. 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.”
  30. 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”
  31. 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”
  32. 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”
  33. 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.”
  34. 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”
  35. 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”
  36. 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)”
  37. 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.”
  38. 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.”
  39. 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”
  40. 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”
  41. 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”
  42. 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”
  43. 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.”
  44. Treas. Reg. §1.672(f)-3(c)(1)(i): compensatory trusts“A nonexempt employees' trust described in section 402(b)”
  45. 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.”
  46. 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”
  47. 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.”
  48. GGRF, Government of Guam retirement plans overview (2026): who may enroll in the 457(b) plan“Pre-1995 Defined Benefit Plan”
  49. GGRF, DB 1.75 Plan summary plan description (effective Jan. 1, 2024), Introduction: established under 4 GCA Chapter 8, Article 5, effective Jan. 1, 2018“The DB 1.75 Plan is not a stand-alone and separate plan, but rather is an alternative benefit structure under the Government of Guam Retirement Fund”
  50. Treas. Reg. §1.401(k)-1(a)(3)(v) (for §401(k) plans; an analogy for a foreign plan)“A cash or deferred election does not include a one-time irrevocable election made no later than the employee's first becoming eligible under the plan”
  51. 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”
  52. GGRF, Government of Guam retirement plans overview (2026), 457(b) Deferred Compensation“Since October 1, 2018, all new and reemployed Government of Guam employees are automatically enrolled in the 457(b) (opt out provision available) ... Automatically enrolled participants contribute a 3% pre-tax rate”
  53. 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”
  54. 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”
  55. Treas. Reg. §1.401(k)-1(a)(3)(ii) (automatic enrollment, for §401(k) plans; an analogy for a foreign plan)“it is irrelevant whether the default that applies in the absence of an affirmative election is”
  56. IRS Chief Counsel memorandum CC:INTL:FREV-253878-96 (Oct. 10, 1997), on the Singapore Central Provident Fund (advice, not precedent)“Additional contributions to the Fund made at the election of the employee are employee contributions that are taxed pursuant to § 61.”
  57. 26 U.S.C. §6048(b) (U.S. owner of a foreign trust: Form 3520 Part II and Form 3520-A)
  58. Instructions for Form 3520 (Rev. December 2025), Part III, Reporting by U.S. owners receiving distributions from foreign grantor trust; Who Must File, item 3 ("a U.S. person (including a U.S. owner)" who received a distribution)“If a U.S. owner (defined later) of a foreign trust receives, directly or indirectly, a distribution from the foreign trust, the U.S. owner must only complete lines 24 and 27 in Part III.”
  59. 26 U.S.C. §671“there shall then be included in computing the taxable income and credits of the grantor or the other person those items of income, deductions, and credits against tax of the trust which are attributable to that portion of the trust”
  60. 48 U.S.C. §1421i(a)-(b), (e) (Organic Act of Guam §31): the Guam Territorial income tax, read with Guam in place of the United States“The income-tax laws in force in the United States of America and those which may hereafter be enacted shall be held to be likewise in force in Guam”
  61. 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”
  62. 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”
  63. 26 U.S.C. §408(a)“means a trust created or organized in the United States for the exclusive benefit of an individual or his beneficiaries”
  64. 26 U.S.C. §677(a)(2): the grantor is treated as owner of a portion whose income may be held for the grantor“held or accumulated for future distribution to the grantor or the grantor's spouse”
  65. 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”
  66. 15 GCA §3301(a) (Guam Code Annotated, Estates and Probate, Chapter 33, Administration of Trusts)“When a trust created by a will continues after distribution, the Superior Court shall not lose jurisdiction of the estate by final distribution”
  67. Treas. Reg. §301.7701-4(b)“generally are created by the beneficiaries simply as a device to carry on a profit-making business”
  68. 26 U.S.C. §7701(a)(30)(A) (a United States person)“a citizen or resident of the United States”
  69. 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”
  70. 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”
  71. 26 U.S.C. §671“Any remaining portion of the trust shall be subject to subparts A through D.”
  72. 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
  73. 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”
  74. 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”
  75. 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”
  76. 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”
  77. Rev. Proc. 2024-40, §3.48 (taxable years beginning in 2025)“exceeds $20,116”
  78. Rev. Proc. 2025-32, §4.47 (taxable years beginning in 2026)“exceeds $20,573”
  79. 26 U.S.C. §6039F(b)“Such term shall not include any qualified transfer (within the meaning of section 2503(e)(2))”
  80. 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”
  81. 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)”
  82. 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)”
  83. 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)”
  84. 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.”
  85. 48 U.S.C. §1421i(d)(1): what the Guam Territorial income tax takes in“Subtitle A [26 U.S.C. 1 et seq.] (not including chapter 2 [26 U.S.C. 1401 et seq.] and section 931 [26 U.S.C. 931]); chapters 24 and 25 of subtitle C”
  86. 8 U.S.C. §1407(b)“All persons born in the island of Guam on or after April 11, 1899”
  87. 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”
  88. 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”
  89. 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”
  90. 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”
  91. 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.”
  92. 26 U.S.C. §6677(a)“the greater of $10,000 or 35 percent of the gross reportable amount”
  93. 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”
  94. 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”
  95. 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).”
  96. 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””
  97. 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.”
  98. 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.”
  99. 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”
  100. 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.”
  101. Instructions for Form 3520 (Rev. December 2025), When and Where To File“Internal Revenue Service Center P.O. Box 409101 Ogden, UT 84409”
  102. 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.”
  103. 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)”
  104. 26 U.S.C. §644(a)“the taxable year of any trust shall be the calendar year”
  105. 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.”
  106. 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.”
  107. 31 C.F.R. §1010.350(a) (FBAR: accounts in a foreign country)“a bank, securities, or other financial account in a foreign country”
  108. IRS Publication 570 (2025), Reminders, Form 8938: bona fide residents of the CNMI, Guam, and the USVI generally have no U.S. income tax return to file it with“they generally are not required to file Form 8938 with the IRS”

References

Ready to file?

If you have a foreign trust, pension, or gift from Guam that needs reporting, our guided interview walks you through Form 3520 and Form 3520-A step by step.

Start a filing

Last reviewed October 26, 2026