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You hold a fund set up outside the United States and someone has told you it is a PFIC. Form 8621 is the report you file for it, attached to your return.
Form 8621 has no standalone civil late filing penalty. Willful failure can still reach section 7203, and under section 6501(c)(8) the IRS can assess until three years after the information is filed.
The $10,000 penalty belongs to Form 8938, not to Form 8621.
One form per PFIC, for each year it is required. Six reportable PFICs, six Forms 8621.
Each fund classified against the PFIC tests first
Unfiled years rebuilt and brought back into compliance
The election decision made before it locks
Form 8621, Form 8938 and the FBAR handled by one team
We prepare the form, decide which of the three tax treatments fits, and produce the figure for your return. Treas. Reg. 1.1298-1(e)(1) requires a separate form for each reportable PFIC, so we count the funds first.
Where a fund paid out or was sold, the calculation is the work; the form records it. We do not file your other country’s return or advise on whether to keep the fund.
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Federally Enrolled IRS Agents and CPAs, certified to practice in all 50 states.
Cross border support with a Canadian CPA license, for Canadian funds and accounts.
Who files it, by how the fund was acquired:
US citizens abroad, sold a local fund by the bank at home.
Green card holders who kept their home country investments.
F-1, J-1 and H-1B holders, once the substantial presence test makes them US residents.
People who inherited a foreign fund, holding period attached.
Dual citizens still living where they were born, holding ordinary local investments.
US partners in a partnership that holds the fund, where the entity filing does not report their share.
You can also be an indirect shareholder, with the same filing duty, if:
you own 50 percent or more of a foreign corporation that is not a PFIC and that holds PFIC stock;
you hold a PFIC that itself holds another PFIC;
you own the fund through a partnership, S corporation, trust or estate.
PFIC stock held through a tax exempt organization or account does not make you a shareholder.
You report a fund you owned at any point in the year under the PFIC reporting requirements, unless a narrow exception fits. The main exception is a dollar test.
The annual report is not required for a section 1291 fund when the total value of your PFIC stock on the last day of the year is at or under your limit:
| Filer | Limit |
|---|---|
| Single filer | $25,000 |
| Joint return | $50,000 |
| Indirect ownership | $5,000 |
Both are year end tests.
The Form 8621 threshold is set aside for two events: a distribution or a gain on a sale, and a QEF election. Either one means you file.
A section 1296 election has its own rule. The PFIC reporting threshold and the section 1291 fund carve outs are in Treas. Reg. 1.1298-1(c)(2).
Do you file Form 8621 for a fund this year
For directly held PFICs, work down the list.
any value
Fileany value
File$50,000 joint
FileNo annual Form 8621 for that fund. The tax rules still run.
Thresholds and exceptions: Treas. Reg. 1.1298-1(c)(2).
The IRS divides Form 8621 into six parts, set out in the Form 8621 instructions. Which ones you complete depends on what happened in the year.
The fund, your shares and their value. The annual report under section 1298(f).
Eight boxes, A through H. A is QEF, C is mark to market, D through H purge a prior period.
Ordinary earnings and net capital gain, lines 6a to 7c.
Year end value against basis, loss capped at unreversed inclusions.
The excess distribution and interest charge, one Part V each.
Live only after an Election B.
The IRS accepts an unlimited number of Forms 8621 inside an e-filed Form 1040. It does not accept the form with an e-filed Form 1040-NR or Form 1040-SS for tax year 2025. Whether consumer software handles the form is a limit set by the vendor.
A first payout can be an excess distribution. Assume a Canadian equity fund held for eight years that paid nothing until year eight, then distributed $12,000.
| Line | Amount |
|---|---|
| Prior three year average distribution | $0 |
| 125 percent of that average | $0 |
| Excess distribution, line 15e(1) | $12,000 |
| Allocated to the current year, one eighth | $1,500, ordinary income now |
| Allocated to the seven earlier years | $10,500, taxed at the top rate for each year |
The $10,500 is taxed at the highest rate in effect for each earlier year, with interest from each of those years’ filing deadlines.
That is the arithmetic an election exists to avoid, which is why the conversation happens before the fund pays out.
Form 8621 has no standalone civil late filing penalty in the Code. Willful failure can still reach section 7203.
Under section 6501(c)(8) the limitations period for that year does not start until the information is filed, and it closes three years after that. An unfiled year has no end date.
Absent reasonable cause, the entire return remains open, and a deduction the IRS disallows from that year is still assessable long after the ordinary window has passed.
There is one place the $10,000 figure is real. Miss the Form 8621 and the Form 8938 exception for that fund is not available. An incomplete Form 8938 can then be penalized under section 6038D, and under section 6662(j) the IRS charges 40 percent on an undisclosed foreign financial asset understatement.
Three forms, three jobs, and filing one does not satisfy the others. The same fund can appear on more than one of them.
A fund on a timely Form 8621 is excused from detailed Form 8938 reporting, though its value still counts toward the threshold and Part IV has to identify the Form 8621. The FBAR is filed separately, with FinCEN.
Three foreign asset forms, three jobs
Filing one of them does not cover the others.
Send the statements for the years you held the fund. We will tell you how many forms were missed, which route fits, and what it takes to close the years out. Confidential, and handled by a CPA or an EA.
Four steps, and the cost depends on the second.
Each non US fund, ETF, pension and wrapper you hold, and when each started.
Which holdings meet the PFIC tests. A fund that fails saves you a form and a calculation.
Whether QEF or mark to market is available and worth making, before anything is filed.
The figure for each fund, the form, and working papers kept until the assessment period closes.
Where earlier years were missed, we classify across the entire period at once.
You generally file a late Form 8621 with an amended return under the IRS delinquent international information return procedures. Streamlined Domestic Offshore is available only where you meet its own eligibility rules.
For eligible taxpayers inside the United States, Streamlined Domestic Offshore involves:
Taxpayers abroad may qualify for Streamlined Foreign Offshore. Neither is available once an examination has started.
Which route fits is the decision. It turns on where you live, what was already filed, and whether tax was underpaid.
Priced on how many funds and how many years. What we quote against:
These are the factors, not a quote. You get a fixed figure before any work starts.
Taxpayers approach us after doing their taxes in TurboTax or on H&R Block or a do-it-yourself app, and they have a huge tax bill and they don’t know why they have it. They don’t know even how it came about. They sometimes don’t have the money for it.
As an expat, I have worked with Dimov Tax for several years now. They make the process clear and easy and it has been a pleasure to work with them. I would certainly recommend them!
Our team includes CPAs and Enrolled Agents who work on individual returns, business taxes and tax planning. Tell us what you need help with when you get in touch.
If you found out years after you bought the fund, the fix is manageable when it is handled before the IRS asks. Tell us what you hold and how long you have held it, and a CPA comes back to you.
General information only, not advice for your circumstances. Because the answer turns on facts specific to your holdings, speak to a CPA before acting on it.
