PFIC Reporting: Passive Foreign Investment Company Rules, Impact of OBBBA, Form 8621
Subpart F Expansion, Dealing With Dual CFC/PFIC Status, QEF Elections, Calculating Tax and Interest
About the Course
Introduction
This course will furnish tax advisers with a thorough and practical guide to reporting investments in a passive foreign investment company (PFIC) on IRS Form 8621. The panel will identify those investments that require PFIC reporting, outline the various elections available to taxpayers holding interests in PFICs, and discuss new PFIC issues after the One Big Beautiful Bill Act (OBBBA). The panel will provide an example of a completed Form 8621 to illustrate reporting requirements.
Description
The PFIC rules have long been among the most rigorous in the Internal Revenue Code; Section 1297 exposes U.S. taxpayers owning stock in PFICs to an ordinary income and accrued interest regime that is complicated and expensive. The number of foreign corporations considering PFICs and controlled foreign corporations (CFCs) under Subpart F has increased. U.S. shareholders must determine whether to elect out of PFIC status through a QEF election or have their holdings treated as PFICs and CFCs. This additional election—which involves gain recognition—is reported on Form 8621.
OBBBA further complicates the PFIC regime for some U.S. taxpayers. The reinstatement of Section 958(b)(4) was welcome, as it provides an exemption from the downward attribution rules for U.S. persons who own CFCs. Further, Section 1297(d) provides that a U.S. shareholder isn't a PFIC when the shareholder owns 10% or more of the stock of a CFC. The implications are substantial. Certain U.S. shareholders are considered owners of foreign-controlled foreign corporations, even with a minimal investment, less than 10%, creating additional reporting responsibilities and tax burdens for these U.S. taxpayers. There are steps practitioners and U.S. shareholders can take to mitigate the impact of the OBBBA changes.
Listen as our experienced panel delves beyond the basics of Form 8621 to provide a thorough discussion of QEF elections and other methods for avoiding the PFIC regime.
Presented By
Mr. Verni is a Tax Attorney and Certified Public Accountant with over 20 years’ experience practicing before the Internal Revenue Service. His practice is focused on representing Expatriate and other U.S Taxpayers who have criminal and civil tax issues related to offshore tax evasion, money laundering, failure to file income tax returns, failure to report offshore income, failure to file FBAR reports and other tax related compliance and reporting concerns. Mr. Verni also represents individuals and businesses in connection with tax controversies involving income, estate and gift and employment taxes.
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BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
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BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
Date + Time
- event
Friday, February 20, 2026
- schedule
1:00 p.m. ET./10:00 a.m. PT
I. Code provisions governing PFIC treatment, purging, and deemed distribution rules
A. Section 1291 default treatment
B. Section 1295 QEF provisions
C. Section 1296 mark-to-market option
D. Section 1298 special rules
II. Ownership rules
A. When a pass-through entity owns PFIC shares
B. When a trust or estate owns PFIC shares
III. Rules when a foreign corporation or entity is classified as both a PFIC and a CFC
IV. The Impact of OBBBA on PFICs
V. Purging elections to remove PFIC "taint"
A. Making election in the year of purchase
B. Making election in a subsequent year after initial purchase
C. Mark-to-market elections
D. Entity classification elections
VI. Completing Form 8621
The panel will discuss these and other relevant topics:
- The legal background of PFICs and general rules
- Locating and interpreting PFIC information on foreign fund statements
- Preparing Form 8621 for PFIC investments
- Calculating tax and interest on eligible distributions
- The impact of OBBBA on the PFIC regime
- Alternate options and elections for PFICs
Learning Objectives
After completing this course, you will be able to:
- Recognize when excess distributions are made and their tax impact
- Discern the advantages and disadvantages of mark-to-market elections versus qualified electing fund elections
- Ascertain other elections and strategies for minimizing the tax impact on PFICs
- Identify OBBBA changes affecting PFICs
- Field of Study: Taxes
- Level of Knowledge: Intermediate
- Advance Preparation: None
- Teaching Method: Seminar/Lecture
- Delivery Method: Group-Internet (via computer)
- Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
- Prerequisite:
Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Knowledge and understanding of passive foreign investment company (PFIC) rules, including taxation of PFICs and filing requirements, and Subpart F rules; familiarity with IRS Form 8621.
BARBRI, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.
BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
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