Genuine Issues of Material Fact Existed Regarding Whether Foreign Trust Owner’s Failure to File Annual Returns Was Due to Reasonable Cause (James, DC Fla.)

A genuine issue of material fact existed with respect to penalties assessed against a foreign trust owner for his failure to file Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts. Questions remained regarding whether the individual’s accountant advised him not to file the return and whether the individual reasonably relied upon such advice.

Viewed in the light most favorable to the individual, the record showed that the individual timely provided all required trust forms to the accountant, relied upon his advice on all appropriate filings relating to the trust, and believed that he had filed all required forms based on his conversations with his accountant.

B.C. James, DC Fla., 2012-2 ustc ¶50,520

Other References:

Code Sec. 6048

CCH Reference – 2012FED ¶36,004.10

Code Sec. 6677

CCH Reference – 2012FED ¶39,820.024

Tax Research Consultant

CCH Reference – TRC ESTTRST: 36,258



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