Navigating the Complexities of Foreign Trust Reporting And The 2024 Proposed Treasury Regulations: A Conversation with Dr. Karen Alpert

PREP Podcaster - ”Success Favours The PREPared Mind”

May 25, 2024 - Participants include:

Dr. Karen Alpert - @FixTheTaxTreaty

John Richardson - @Expatriationlaw

On May 8, 2024 Treasury issued proposed regulations designed to clarify and provide certain exceptions for Form 3520 and Form 3520A reporting for foreign trusts.

The announcement and proposed regulation can be found here:

https://www.federalregister.gov/documents/2024/05/08/2024-09434/transactions-with-foreign-trusts-and-information-reporting-on-transactions-with-foreign-trusts-and

Comments from taxpayers can be found here:

https://www.regulations.gov/document/IRS-2024-0022-0001/comment

This podcast features a discussion between Dr. Karen Alpert and John Richardson where they explore how the IRS proposed rules might impact U.S. taxpayers in Australia and their Australian Superannuations.

AI generated description:

"Good afternoon, this is John Richardson speaking with you from Toronto, Canada. Today is May 25th, 2024, and my guest is Dr. Karen Alpert, who joins us from Australia. In this episode, we delve into a proposed Treasury regulation concerning foreign trusts, including pension plans and tax-favored accounts outside the United States.

We explore the intricacies of what constitutes a foreign trust under U.S. law and whether common Australian pension plans fall into this category. The discussion highlights the stringent reporting requirements, specifically IRS Forms 3520 and 3520A, and the severe penalties associated with non-compliance.

Dr. Alpert provides a detailed analysis of the proposed regulations, discussing the criteria for determining if an account is a tax-favored foreign retirement trust. We also consider the complexities and potential pitfalls for U.S. citizens living abroad, especially those with no direct connection to the United States.

The conversation touches on the broader implications of citizenship-based taxation and proposes a more straightforward approach to identifying exempt accounts using FATCA IGAs. Join us for an insightful discussion on the challenges and possible solutions to foreign trust reporting."