New IRS pathway — Oct 2024

Late Form 3520 Foreign Gift Penalty?
Build your statement before they assess it.

The IRS now reviews a reasonable-cause statement attached at filing — before assessing penalties on late Part IV filings. One structured packet can stop a six-figure penalty. We build it with you in minutes.

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One flat fee per packet · No subscription · Not legal advice

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Average Part IV penalty: $235,000+ — even for modest incomes

The National Taxpayer Advocate found the average §6039F penalty on late Form 3520 Part IV filings was over $235,000 for taxpayers earning under $400k — often far exceeding the value of the gift itself. With a 67% abatement rate when reasonable-cause arguments are made, the filing approach now matters enormously.

The Oct 2024 IRS change

The rules changed. The window is open — but only if you act right.

On October 24, 2024, the IRS stopped automatically assessing penalties on late Form 3520 Part IV filings. The updated IRM (Nov 20, 2024) now requires pre-assessment review of your reasonable-cause statement. That only happens if the statement is attached when you file.

Before Oct 2024

Penalty first, argue later

Penalties were auto-assessed at filing. You had to fight them through collections — expensive, slow, unpredictable.

After Oct 2024

Statement attached → reviewed before assessment

A well-structured reasonable-cause statement attached to the late filing goes to IRS review before any penalty is assessed. One packet, right timing — can mean zero penalty.

Eligibility check

Do you need to file Form 3520 Part IV?

Not sure if your foreign gift or inheritance triggers a US reporting requirement? Answer three quick questions to find out — and whether the Oct 2024 penalty-protection window applies to you.

Note: This is a general screening tool, not legal advice. Always confirm your filing obligations with a qualified international tax attorney or CPA.

Question 1 of 3

Are you a US citizen, US resident, or green card holder?

How it works

Three steps from panic to packet

You know your facts. We know the §6039F structure, the IRM procedure, and the case-law framing. Together: a defensible packet.

1

Answer guided questions

Gift/bequest facts, donor relationship, dates, amount, and — in your own words — why the filing was late. 10–15 minutes.

2

We structure the argument

Your facts are mapped onto §6039F, the IRM reasonable-cause standard, and the ordinary-business-care framework — with case-law anchoring.

3

Download and attach

One print-ready PDF packet: the statement, a post-Oct-2024 filing checklist, and a cover page. Attach it to your late Form 3520 and mail.

Your packet includes

Everything in one file, ready to attach

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Structured reasonable-cause statement

Fact section, §6039F penalty framing, facts-and-circumstances argument, ordinary-business-care / good-faith standard — all filled with your actual facts.

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Post-Oct-2024 filing checklist

Step-by-step procedure reflecting the new IRM “attach-at-filing / review-before-assessment” pathway. Nothing falls through the cracks.

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Case-law framing

Relevant case anchors (Boyle limits, reliance-on-advisor line) woven into the argument — the same framing practitioners charge thousands for.

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Cover page + instructions

Where to attach, how to mail, what copies to keep. Formatted for IRS submission — no guessing.

Pricing

One flat fee. One packet. Done.

Tax attorneys charge $3,000–$10,000+ for a reasonable-cause defense. A DIY ChatGPT letter isn’t defensible at $235k stakes. There’s a better option.

Most common choice
$499

per packet · one-time · instant download

Attorneys charge $3k–$10k+ for the same outcome. This is the self-serve alternative built for exactly this filing.

Start my statement →

Not legal or tax advice. This tool generates a structured document based on your inputs. Consult a qualified international tax attorney or CPA for legal guidance.

Common questions

If you’re Googling this at midnight, these matter

Form 3520 Part IV is the section US persons must file when they receive a reportable foreign gift or bequest — generally over $100,000 from a foreign person, or over ~$19,570 from a foreign corporation or partnership. The §6039F penalty for a late or missing filing is 5% of the gift amount per month, up to 25% — with no cap. On a $1M inheritance, that’s up to $250,000. The National Taxpayer Advocate documented average penalties over $235,000 on sub-$400k-income filers.
On October 24, 2024, the IRS announced it would stop automatically assessing §6039F penalties on late Form 3520 Part IV filings. The IRM was updated November 20, 2024: if you attach a reasonable-cause statement to your late filing, the IRS must now review it before assessing any penalty. Previously, penalties hit first and you argued after — a much harder position. This pre-assessment window is the core of what makes timing matter so much now.
The IRS applies the ordinary-business-care-and-prudence standard: did you act as a reasonably prudent person would? Strong reasonable-cause factors include: not knowing about the filing requirement (if newly imposed or complex), reliance on a tax preparer who failed to advise you (within limits), medical hardship, unclear facts about whether a transfer was a gift, or uncertainty about the gift’s foreign sourcing. The IRM also considers good-faith effort and whether there was any tax underpayment.
If you’ve already filed late without a statement and no penalty has been assessed, you may be able to file an amended return or send a standalone reasonable-cause statement referencing the original filing. If a penalty has already been assessed, you’d pursue an abatement request (Form 843 or administrative appeal) — a different process. This tool is optimized for the attach-at-initial-filing pathway. If your situation is more complex, consult a qualified international tax attorney.
Yes — in fact, many preparers handle the Form 3520 mechanics but lack deep reasonable-cause drafting experience for §6039F specifically. This tool generates the statement; your preparer handles the tax return. The packet is designed to be reviewed by a qualified professional before filing. This is not a substitute for professional advice on complex or high-stakes situations — it’s a structured starting point that can reduce attorney time and cost significantly.
US persons (citizens and residents) must report on Form 3520 Part IV: (1) gifts or bequests totaling more than $100,000 in a year from foreign individuals or foreign estates; (2) gifts totaling more than approximately $19,570 (2024, inflation-adjusted) from foreign corporations or foreign partnerships. If you received money, property, or assets from a non-US source that meets these thresholds, you had a filing obligation — and if it was late, Part IV reasonable-cause applies.

Don’t wait for the penalty notice.
File with the statement attached.

You have a narrow window to get ahead of this. It takes 15 minutes and one flat fee — not a $10,000 legal retainer.

Start my statement now →
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