We missed Form 3520 for a large foreign gift. Is the penalty really 5% per month?
The gift itself was reported in other family records, but the Form 3520 filing was missed because nobody realized the U.S. recipient had a separate information-return duty. Now we are trying to assess how serious the penalty exposure is before deciding whether to file a late form immediately with a reasonable-cause explanation.
The number everyone keeps repeating is 5% per month, but I need to know whether that is actually what the IRS says and whether there is any cap. If that figure is right, the case needs to be treated as urgent rather than as a minor paperwork cleanup.
Related Questions
The IRS denied my penalty relief request. Is Appeals actually the next step, or do I need a completely different type of filing now?
The denial letter is what rattled me because it felt final at first glance. But after reading more carefully, I realized the denial of relief might simply be the point where an appeal becomes availabl...
I already paid the penalty to stop the bleeding. What makes a strong Form 843 package now?
Paying first was not my ideal plan, but I wanted to stop the stress of the balance hanging over the company while we sorted out the larger dispute. Now that the payment has been made, I do not want to...
My preparer missed the filing. Can actions of an agent help with reasonable cause?
I am in the UAE and my accountant missed the Form 5472 filing even though I had sent the records on time. We now have a penalty notice. I know the IRS often says taxpayers are still responsible even i...
I discovered the missed filing myself before the IRS contacted me. Should I file the delinquent return now or wait for advice?
I am in Hong Kong and realized my foreign-owned LLC missed an international information filing. The IRS has not contacted me yet. I found the delinquent international information return procedures onl...
We fixed the Form 5472 problem after the notice but before the 90-day point. What proof matters most if the IRS still pushes continuation penalties?
Once we realized the notice could turn into an additional penalty timeline, we stopped debating and repaired the underlying problem as fast as we could. The corrected package was sent, the records wer...
My foreign company was already registered in a U.S. state before the 2025 BOI rule changed. If we missed the one-time deadline, where do we even start?
I live in Israel and our main company is formed outside the U.S., but it has been registered to do business in one U.S. state for some time. We were so focused on the headlines about domestic companie...
We have intercompany pricing, but no real section 6662 documentation. Is that automatically a penalty disaster?
The company does have contracts and invoices, but not the kind of formal transfer pricing study people usually mean when they talk about section 6662 documentation. Now that a return review is happeni...
If I missed Form 5472 two years ago, is the problem only the penalty or is the year still open too?
I am in Australia and my Delaware LLC missed a Form 5472 filing for an earlier year because I did not understand owner-paid expenses counted as reportable transactions. I was mentally treating the iss...
I just got a $25,000 Form 5472 penalty notice. What should I do first?
I am in India and own a Delaware single-member LLC. We filed late and now received an IRS notice assessing a $25,000 Form 5472 penalty. Revenue was only about $18,000, so the penalty is larger than th...
My Form 5472 penalty notice went to an old registered-agent address. How should I frame the response?
I only learned about the penalty because my former registered agent finally forwarded a notice packet months after the IRS had mailed it. The LLC had already changed mailing arrangements, but the old ...
Have a similar question?
ForeignLLCTax members get expert answers with IRS citations. One CPA consultation costs $200+. Full access is $9.99/month.
Become a Member — $9.99/moDisclaimer: All content on ForeignLLCTax.com is created by a tax professional and is provided for general educational and informational purposes only. It does not constitute tax, legal, or accounting advice, and should not be relied upon as such. Every tax situation is different — for advice specific to your circumstances, please consult a licensed CPA, Enrolled Agent, or tax attorney. By using this website, purchasing a subscription, or accessing any tools or services, you acknowledge that no client-professional relationship is established between you and ForeignLLCTax.com or its operators. This website is not affiliated with the IRS.
