Have a Tax Question? Ask a Tax Expert
Hi and welcome to our site!1. In most situations information provided on the form 3520 is sufficient and the IRS doesn't request any additional information. It is possible under audit conditions - the IRS request additional information - however the information the IRS might request is to support the information which is already provided on your form - not to investigate the donor.Information provided on the form 3520 include - (a)Date of gift (b) Name of foreign donor (c) Address of foreign donor (d) Identification number, if any2.As a general rule - the IRS doesn't share any information provided on tax forms. Request for release of private information may be only if the person is under criminal investigation and such request must be approved by the US court. Simple requests from foreign authorities are not granted.
In Part IV, Section 54 of Form 3520, the detailed information of the donor is not required. In Section 55, the information is required. But for the individual, Section 55 is not required to be filled in. Is that right?
Yes - that is correct.Section 54 reports gifts or bequests from nonresident alien individuals and a foreign estates - and the donor is not listed - only, the property received as a giftBut section 55 reports gifts from foreign business entities - and such entities should be named on the form.There is no need to provide any additional information unless specifically requested by the IRS.
In general, if the gift is a big amount, shall IRS request the information about the donor to verify if the donor is a non-resident alien?
First of all - whatever the law considered "small amount" - is not reported. For gift from individuals - less than $100k is not reported. So if the amount is above the reporting threshold - that is considered "big amount" The IRS may request any information that support your statement. We may not know if the IRS will actually request any information. But if they do - there might be a specific reason behind such request. In most situations - no additional information requested.
Thank you very much for your detailed answer. It is very helpful!