Service Releases Substantially Revised Form 5227

Service Releases Substantially Revised Form 5227

News story posted in IRS Forms on 6 February 2008| comments
audience: National Publication | last updated: 18 May 2011


In response to changes brought about by The Pension Protection Act of 2006, the Service has issued a substantially revised Form 5227, Split-Interest Trust Information Return, for reporting by charitable remainder trusts, pooled income funds, charitable lead trusts for the 2007 tax year. The good news is that split-interest trusts no longer have to file Form 1041-A. That bad news is the estimated time needed to maintain records for, learn about, and complete Form 5227 is 136 hours and 50 minutes!

What’s New in Form 5227

Act Section 1201(b) of the Pension Protection Act of 2006 made changes that affect split-interest trusts for 2007. The changes are reflected in the substantially revised 2007 Form 5227. Now, split-interest trusts­ no longer have to file Form 1041-A. Form 5227 now meets the requirements of Section 6034 and continues to meet the requirements of Regulations section 53.6011-1(d) and, for charitable remainder trusts, Regulations section 1.6012-3(a). Form 5227 is now open to ­public inspection as a result of the change. New Schedule A, which is part of Form 5227, is not open for public inspection and contains information that is specific to private beneficiaries.

Major changes to the form include the following:

  • Part I, Income and Deductions, is revised and now all trusts must complete Part I through Section D.
  • Part III from the prior year is revised and moved to new Schedule A.
  • Part III-A is new to Form 5227 and is a revised version of Form 1041-A, Part III.
  • Part III-B is new to Form 5227 and is a revised version of Form 1041-A, Part II.
  • Part V-B is revised and provides and easier format to figure the required distribution for different charitable remainder trusts.
  • New Schedule A expands on the old Part II, Accumulation Schedule, reflects distribution information of private beneficiaries, and asks for information about the donor and assets donated.

Section 1201(b) of the Pension Protection Act also revised penalty amounts for failure to file and expanded penalty application to include failure to file complete and correct returns. Also, an increased penalty amount is imposed on trustees who are required to file the return and knowingly fail to file the return.

Form 5227 and Instructions are attached below in PDF format.

i5227_07.pdf104.03 KB
f5227_07.pdf408.15 KB

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