Disaster Relief and Forms 3520, 3520-A

We are sharing the update, below, from an official in IRS Servicewide Penalties to the AICPA Form 3520 Penalties Task Force. The IRS is aware that AICPA is sharing this news with members, state societies and other tax professionals.

If a taxpayer is filing a Form 3520 or Form 3520-A (if applicable to the disaster filing) beyond the normal deadline because of extended filing disaster relief (especially if it because the practitioner is in the declared disaster area and not the taxpayer), the IRS recommends:

1. Taxpayers or practitioners should put on the top of the first page of Form 3520 or Form 3520-A (if applicable to the disaster filing) the NAME OF THE DISASTER (i.e., Hurricane Katrina, storm, flood and location) and the extended deadline.

2. If a taxpayer is assessed a penalty for Form 3520 or Form 3520-A (if applicable to the disaster filing) and the taxpayer timely filed it under the extended disaster filing relief, the taxpayer or the practitioner should call the IRS International line, choose the option to speak to the business tax section, and inform them of the specific disaster relief that applies, noting the extended deadline.

The taxpayer or practitioner may need to request that the IRS check for the disaster indicator on the individual income tax account in cases where the IRS previously recorded the disaster relief. If there is no posting of eligibility for relief previously, then relief should still apply to the Form 3520, and the practitioner or taxpayer should work with the phone agent to obtain relief.