On May 8, the IRS published proposed regulations that provide guidance regarding the information reporting of transactions with foreign trusts, the receipt of large foreign gifts and loans from, and uses of property of foreign trusts. The information reporting for these transactions is made by U.S. persons on Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, and Form 3520-A, Annual Information Return of Foreign Trust With a U.S. Owner (Under section 6048(b)).

Many provisions in the proposed regulations are similar to, or expand on, the guidance contained in Notice 97-34, though other provisions address topics on which there was previously little guidance from the IRS.

The regulations are proposed to apply in taxable years beginning after the date on which the final regulations are published in the Federal Register, but a taxpayer may rely on the proposed regulations for any taxable year ending after May 8, 2024 and beginning on or before the date that final regulations are published in the Federal Register.

Comments on the proposed regulations must be received by July 8, 2024, and a public hearing on them has been scheduled for August 21, 2024.

A link to the proposed regulations can be found here:

Federal Register :: Transactions With Foreign Trusts and Information Reporting on Transactions With Foreign Trusts and Large Foreign Gifts