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I live abroad as a US citizen in my native country. I still keep my native citizenship as well and here we can open an IRA, with matching from government which is a pretty good deal. There is a tax treaty between the country where I live and the USA.

So far I didn't yet open such IRA account because I thought there would be millions of tons of info to report to USA about all companies' incomes balance sheets etc in the foreign IRA, which I didn't know how and I am not sure if anyone living on earth can. But now I was reviewing instructions for form 3520. Look at page 2 of 13 of the pdf file. On the left, at the upper side, it talks about certain eligible individuals, which is under exceptions to filing. And it gives a link to https://www.irs.gov/irb/2020-12_IRB#REV-PROC-2020-17. Here I couldn't understand everything but as far as I can tell, if it is a foreign tax favored retirement account, we are not required to report 3520. Am I right or I miss something here?

If I am right, and we do not have to report the foreign IRA account in 3520, then does it mean there is also nowhere else to report this to US and does it mean I do not have to report it to US at all?

Kate Gregory
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1 Answers1

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You should probably talk to a local US-licensed tax advisor specializing in the US expats in your country.

Generally, the revenue procedure you linked to exempts pension schemes and other similar trusts from reporting. Whether it applies to your specific situation we cannot tell.

Keep in mind that this revenue procedure only exempts the reporting based on the IRC Sec. 6048, but not FBAR or FATCA related reporting. Similarly, while the pension fund reporting may be exempt, the income may not be. Tax treaties may augment that, but generally income exempt in your home country may not be exempt in the US.

littleadv
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