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Let's say person A is person B's dad. Person A lives in Europe and is not in any way a US citizen/resident etc... Person B is a US resident (is there a difference between citizen and just a resident?).

Person A wants to send person B a gift of 1 million US dollars. This money was earned by person A outside the US and income tax was paid for it outside the US.

Does person B have to do anything specific so that he won't be taxed in the US for this gift? I have read online on multiple sources that all gifts over $100,000 have to be reported to the IRS via form 3520. But it's not clear to me if this absolves person B of paying anything for this gift?

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    Since I see no indication that you must record anything from 3520 onto your 1040, it looks to me like you just file the form as an indication of "here's how I legally obtained all that tax-free money". – RonJohn Jan 14 '18 at 6:48
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There is no U.S. federal tax payable by the recipient of a gift. Failure to file 3520 may result in a penalty (not a tax). Based on my reading of the Penalties section of the 3520 instructions, the penalty for not filing is $10,000.

https://www.irs.gov/businesses/gifts-from-foreign-person

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