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Required Reporting for PFICs and Why You May Need to Extend Filing

April 02, 2015

If you hold interest in Passive Foreign Investment Companies, be aware of the potential consequences of failure to comply with regulatory reporting requirements.

The April 15th tax return filing deadline is approaching quickly. Are you one of the millions of Americans that will be filing an extension for 2015 because of increased reporting requirements for foreign investments that you hold?

Regulations for Passive Foreign Investment Companies

Regulations released on December 30, 2013, require additional disclosure from U.S. shareholders of Passive Foreign Investment Companies (PFICs). IRS Form 8621 generally used to be filed only when the PFIC had an effect on your taxable income. Under the 2013 regulations, Form 8621 is now also required to be filed for information purposes only, subject to certain exceptions. Failure to file the form can have an important impact on the application of the statute of limitations to your tax return. It can also, inadvertently, trigger monetary penalties with respect to other reporting forms that you may file.

For more information on filing requirements for holders with an interest in PFICs and consequences for noncompliance, read our article, “Changes to Required Reporting for Passive Foreign Investment Companies (PFICs) and Why You May Need to Extend Your Tax Return”.

Questions? Contact any member of our Global Tax Services Group.

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