IRS suspends reporting on Forms 8621 and 8938

IRS released Notice 2011-55 yesterday.

FATCA under HIRE Act brought about many changes to the Passive Foreign Investment Companies (PFIC) reporting regime and made Form 8621 mandatory for all taxpayers who have invested in PFICs – commonly in foreign mutual funds. This reporting is applicable for all tax years beginning after March 18, 2010, commonly, for 2011 tax year and onwards. (Code Section 1298(f)).

FATCA also made a new reporting requirement for US taxpayers who own Foreign Financial Assets (FFA) if the value of such assets exceeds $50,000. This would be reported on Form 8938. (Code Section 6038D)

IRS is currently revising Form 8621 and designing new Form 8938 to reflect the new reporting requirements. Notice 2011-55  suspends the reporting requirements for PFIC and FFA until the new Forms are released by the IRS.

CPA Global Tax will provide additional information and training for these Forms as soon as they are available.

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