Form 8621 [PDF 123 KB] is used by a U.S. person who is a direct or indirect shareholder of a passive foreign investment company (PFIC) or qualified electing fund (QEF).
Filing requirement changes are delayed
The revised Form 8621 and its revised instructions indicate that the IRS is continuing to delay some changes in the filing requirements authorized in 2010 by Code section 1298(f) and that are contained (but reserved) in the most recent revision of Form 8621 (Rev. December 2012).
Specifically, changes in a new Part I of the revised Form 8621 that reflect an annual filing requirement authorized by section 1298(f) are reserved for future use and will not be required until a future date when the underlying regulations are published and a new Form 8621 is issued.
Accordingly, the most recent revision of Form 8621 generally retains the requirements of the prior revision, and provides that Form 8621 must be filed for each tax year in which the U.S. person:
- Receives certain direct or indirect distributions from a PFIC
- Recognizes gain on a direct or indirect disposition of PFIC stock
- Is making an election reportable in revised Part II of Form 8612
The most recent revision of the instructions to Form 8621 does not change the filing obligations of exempt organizations, and continues to state that exempt organizations are exempt from section 1291 unless a dividend to the exempt organization from the PFIC would be subject to tax under subchapter F.
A timely filed “purging election” is made on Form 8621. Form 8621-A is used to make a late purging election under section 1298(b)(1).
As in the prior revision, a separate Form 8621 must be filed for each PFIC in which stock is held directly or indirectly pursuant to the chain-of-ownership requirements.
The revised instructions [PDF 203 KB]—with a revision date of December 2012—include the following new requirements:
- In the filer identification section, a line has been added to request the “Reference ID” number of the PFIC or QEF.
- New Part I, Summary of Annual Information, has been added to reflect the new annual filing requirement of section 1298(f) which was added by the Hiring Incentives to Restore Employment Act of 2010. As discussed above, the instructions state that new Part I is not required until the implementing regulations are published (currently, the regulations are “reserved” for future release). The revised instructions state that Form 8621 will be revised when Part I becomes effective (and when the underlying regulations are promulgated).
- The elections in Part II of Form 8621 have been reordered, and the filing requirements for new elections F, G, and H have been modified.