IRS Requests Comments on Forms 3520 and 3520-A

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We welcome back guest blogger Daniel N. Price. Dan worked in the Office of Chief Counsel of the Internal Revenue Service for almost two decades and is now starting in the private sector in San Antonio, Texas. He recently authored a post on the proposed regulations surrounding the role of Appeals in FOIA disputes. Today, Dan provides some background on the IRS process to fulfill its obligations under the Paperwork Reduction Act and its request for comments last month on Forms 3520 and 3520-A..

On December 16, 2022, the IRS published a request for public comment on Forms 3520 and 3520-A in the Federal Register. The request for public comment is a routine request in the context of periodic OMB approval. Every three years, all forms with OMB numbers must go through the process of OMB review as part of the paperwork reduction act. See That process includes a request for public comment published in the Federal Register.

When I was with the Office of Chief Counsel providing legal support to the IRS units handling the Voluntary Disclosure Practice and the Streamlined Filing Compliance Procedures, I assisted IRS personnel in the process of publishing requests in the Federal Register, analyzing public comments for the IRS, and drafting agency responses to public comments. The process is generally mundane. Inside of the IRS, the process begins with using the last cycle’s approval paperwork as a template. Then, the information on the last cycle’s paperwork might be verified or updated. Sometimes the IRS staff handling requests for public comments do not receive feedback from the business operating unit within the IRS responsible for the forms (at times because designated points of contacts for forms move positions within the IRS or retire). At other times, deadlines necessitate publishing requests for comments using best guesses or the last paperwork from the prior cycle. Over the years, I saw some variance in how these were handled by IRS personnel.

Once public comments are collected, internal discussions within the IRS may occur. In the realm of the voluntary disclosure practice and the Streamlined Filing Compliance Procedures, key players including IRS management and Chief Counsel discussed the public comments. Then, the IRS generally prepares a summary of the public comments and a brief discussion of any changes based on the public comments. The IRS doesn’t make much fanfare of this process, but the IRS’ written discussion of public comments becomes part of the public record available at

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Searching is not intuitive. For example, if you want to pull up the IRS’ official response to public comments on Forms 3520 and 3520-A from the last cycle in 2019, select the “ICR” search option and search for “Form 3520.” Then, sort by date, and poke around for “view supporting statement and other documents” to find the single comment (by a practitioner in the U.K. concerning reducing reporting burdens for taxpayers with foreign pensions) and the IRS’ supporting statement which included agency responses to the public comment.

Although the overall process of soliciting comments for this type of periodic review is rather mundane and mechanical, when meaningful public comments are received, this process helps the IRS improve its forms and update burden estimates. And even if comments are technically beyond the scope of the request for comment, practitioner input may have an impact on the IRS. We have that type of opportunity in the context of the request for public comment pending for Forms 3520 and 3520-A.

One detail in the recent request for public comment on Forms 3520 and 3520-A caught my attention: the estimated number of annual respondents. According to the IRS’ estimate published in the Federal Register, only 1,820 respondents will complete Forms 3520 and 3520-A. But that estimate is grossly understated. Historical data shows 27,431 Forms 3520 were paper filed in 2012. See TIGTA report “A Service-Wide Strategy Is Needed to Increase Business Tax Return Electronic Filing,” September 24, 2014. The ridiculously low estimate appears to be a holdover from the IRS’ prior OMB recertification of these forms. The IRS’ supporting paperwork for the last OMB review contained that exact figure calculated as follows:

Over the last decade, awareness of Forms 3520 and 3520-A has grown exponentially. A decade after the 2012 stats, the actual number of annual filers (respondents) of Form 3520 likely exceeds 50,000, and I would not be surprised by a combined annual filing for Forms 3520 and 3520-A of over 75,000. By materially understating the number of respondents, the IRS is materially understating the overall compliance burden associated with these forms. Also, the IRS welcomes comments on the time estimates per respondent. For these forms the IRS estimates 51 hours and 56 minutes per respondent (which appears to be a weighted average of the two forms)! And the IRS’ burden estimates do not attempt to capture post-filing burdens relating to dealing with IRS penalty assessments post-filing. 

If you have any thoughts on the Forms 3520 and 3520-A, the estimated burdens relating to those forms, and ways to enhance the forms, I urge you to submit comments by February 14, 2023 to


  1. Randall KC Kau says

    thank you Mr Price for a very informative post, particularly about searching the comment
    letters. Decades ago while I was in private practice before there day and age of the internet, I had occasion to search for a comment letter. After tracking down the comment letter on an obscure but important Code provision relating to securities lending, I called the author and mentioned the comment letter was the only authority I could find illuminating the issue. The author told me, “Oh that letter. We withdrew that comment.”

  2. Well, thank you the invitation! I am working on extension requests today for gift tax and foreign trust returns. So many issues–and headaches–can arise with these forms, especially the 3520 and 3520-A. I’m not sure the IRS always appreciates how the sometimes unclear instructions and penalties for messing up affect trust administration and maintenance throughout the year for families that just want better asset protection.

  3. Bob Kamman says

    Speaking of compliance burdens involving foreign issues: It has been about 46 years since I started pointing out the foolishness of IRS wasting resources on issuance of “Alien Tax Clearances” (see Section 6851) to the small minority of people who actually comply with the archaic requirement. But this is the first time that, following your directions, I have found that the actual number issued is only 20,540 annually. The “time burden” (just on filers) is 17,049 hours. The annual cost to the government is only $14,216, or 69 cents each. This is just the cost of developing the form, not the cost of hours wasted by IRS employees issuing them. The current expiration date is February 28, 2023. I can’t find where comments have been solicited on renewal. Not that these would accomplish anything. The response would be, “the law requires this.” Congress can change the law, but as we have seen they have much more important business these days.

    • Joseph Barry Schimmel says

      Bob–you have 2 weeks left. Comments on Form 2063 are due on January 23, 2023. The fastest way to find requests for comments on tax forms is to search by the OMB number, which generally appears at the top of the form. So, for Form 2063, the OMB number is 1545-0138. If you search “Federal Register 1545-0138” it is the first hit.

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