IRS Form 8621

Under the Foreign Account Tax Compliance Act (“FATCA”), filing requirements for shareholders of Passive Foreign Investment Companies (“PFIC”) have been increased. In the past, shareholders were required to file Form 8621, an Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, when disposing of their interest in the PFIC or making a Qualifying Electing Fund election (“QEF”). With FATCA’s enactment on March 18, 2010, Internal Revenue Code §1298 was amended to require all shareholders of a PFIC to file Form 8621 and disclose their ownership of any such stock or security. U.S. taxpayers should be aware that this is required of both direct and indirect shareholders and a separate Form 8621 must be filed for each PFIC in which stock is held.

U.S. persons directly or indirectly owning stock in a foreign corporation should seek qualified assistance from a tax law firm such as Moskowitz, LLP to determine chain of ownership , PFIC status and IRS reporting obligations (current and delinquent).

For more information see:

Passive Foreign Investment Companies
Passive Foreign Investment Companies (PFIC) and Tax Treatment - Understanding PFIC reporting

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