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International Tax Blog - New and Interesting International Tax Issues


New PFIC Annual Reporting Rules

2010-04-07

On March 18, 2010, President Obama signed the Hiring Incentives to Restore Employment Act of 2010 (the Act).  The Act amends the Internal Revenue Code by adding a new Code § 1298(f).

Code § 1298(f) requires United States persons who are shareholders of passive foreign investment companies (PFICs) to file an annual report containing information as the Treasury/IRS may require.  Code § 1298(f) is effective on the date of enactment (March 18, 2010).

Fortunately, the IRS has issued Notice 2010-34 which delays the implementation of the new annual reporting requirement.  For calendar year taxpayers, the new rules will not apply until filing tax returns for the calendar year 2011.

In the meantime, persons that were required to file Form 8621, Return by a Shareholder of a Passive Foreign Investment Company or a Qualified Electing Fund, prior to the enactment of Code § 1298(f) must continue to file Form 8621 as provided in the instructions to the form (e.g., upon disposition of stock of a PFIC, or with respect to a qualified electing fund under Code § 1293).

Tags: 1291 PFICs