Although FATCA was signed back in 2010 and requires the IRS to collect these forms from every US person who owns a PFIC (directly or indirectly) the IRS has it seems told millions of taxpayers to ignore that part of the law.
The IRS phrase this generously by explaining that a new section on the form known as:
“Summary of Annual Information was added to reflect the new annual filing requirement of section 1298(f) which was added by section 521 of the Hiring Incentives to Restore Employment Act of 2010. However, this new Part I is not required until the underlying regulations are published. For now, they have been Reserved For Future Use (sic). Form 8621 will be revised when Part I becomes effective.”
The IRS has - seemingly - put gone and put the additional FATCA reporting for PFICs back on the “too difficult” pile once again.
The PFIC (or “Passive Foreign Investment Company”) legislation was signed into law in 1986. PFICs include all non-US collective investments (such as unit trusts, investment trusts, OEICs, SICAVs and ETFs as well as many private companies). If owned by a US citizen, green card holder or citizen (whether directly or indirectly) US income tax can be charged on gains at rates of potentially up to 100 per cent in addition to complex reporting.
Managing Director, American Tax Returns Ltd
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