IRS recently released the draft Form 8621 to reflect changes made by FATCA effective March 18, 2010.
The new Part I of the Form suggests that the IRS generally intends to require annual filing of Form 8621—
- Without regard to whether an election under the PFIC rules is being made in that year, or whether the PFIC rules would alter otherwise generally applicable U.S. income tax rules for the year under section 1291, and
- Without regard to whether an income inclusion would be required under section 1293 or section 1296 for that tax year.
The information in this new Part I would require the taxpayers to provide IRS with information also generally required on new Form 8938 (Statement of Specified Foreign Investment Assets), and would enable the IRS to waive reporting on Form 8938 of foreign assets reported on Form 8621 without sacrificing the ability of the IRS to obtain desired information.
The IRS did not release draft instructions. Guidance is still awaited on issues such as whether it will retain current exceptions from filing of Form 8621 by tax-exempt U.S. entities that would not be subject to U.S. taxation under subchapter F on actual dividends from a PFIC.
To remind our readers, generally any investment by a US person in a foreign mutual fund is considered a PFIC and subject to be reported on Form 8621.