[DCResident1806]

To complete the FORM 3520, IRS says “You must aggregate gifts received from related parties. For example, if you receive $60,000 from nonresident alien A and $50,000 from nonresident alien B, and you know or have reason to know they are related, you must report the gifts because the total is more than $100,000. ”

Just wondering how IRS determines or knows the parties are related if form 3520 is not filed?

[AtlantaTaxExpert]

I would not take that course of action if I were you. The banks report all transfers in excess of $10K, and you do NOT want to be on the receiving end of an audit from the portion of the IRS that investigates things like money laundering and possible funding of terrorism activities.

[DCResident1806]

ATE, thank you for your thoughts. In a IRS audited case, is the burden of proof on the defendant's side? If that's the case, how can a person prove that the two persons wiring the funds are unrelated if they are really unrelated?

[AtlantaTaxExpert]

Actually, those kind of audits suggest criminal activity, in which case burden of proof rests with the IRS.

Relations are proven with documents such as biryh certificates, marriage licenses and adoption paperwork.

[DCResident1806]

Thanks a lot.

[AtlantaTaxExpert]

Glad to help!