How difficult is it to complete Form 8621 for PFICs? Looking for real experiences

The 49-hour estimate for Form 8621 is definitely intimidating, but it includes time for recordkeeping, learning about the form, and preparing it. The actual filling out might be more like 2-3 hours once you understand what you're doing. For your situation with the Japanese employee investment fund, you'll need to determine if it's actually a PFIC. A foreign mutual fund typically qualifies as one. The form itself requires reporting each PFIC separately, providing info about acquisitions/dispositions, and choosing a method for reporting income (mark-to-market, QEF election, or excess distribution). The most challenging part is gathering the right information from the fund and understanding which election is best for your situation. The QEF election is generally preferred but requires information from the fund that they may not provide.

After spending countless hours trying to figure out international tax forms, I finally tried https://taxr.ai and it was such a relief. I uploaded my Japanese investment account statements and their AI analyzed everything, identified my PFICs, and helped me understand which parts of Form 8621 applied to me. What really helped was that it explained each section in plain English and showed me examples relevant to my situation. They even have specific guidance for employee investment schemes in Japan that might qualify as PFICs. Saved me from making some costly mistakes on my PFIC elections.

Just wanted to follow up - I took the plunge and tried https://taxr.ai after seeing it mentioned here. It actually worked amazingly well for my UK investment situation! I uploaded my statements and it clearly identified which investments were PFICs and which weren't. The most helpful part was that it showed me exactly what information I needed from each fund, and even created templates I could send to my fund managers requesting the specific info for making a QEF election. When I learned one fund couldn't provide the info, it walked me through the mark-to-market election step by step. Form 8621 still took me about 3 hours to complete, but that's way better than the 49 hours the IRS claims!

If you're struggling to get responses from the IRS about Form 8621 questions (like I was), try https://claimyr.com - they got me through to an actual IRS agent in less than 30 minutes after I'd been trying for weeks. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had specific questions about retroactive QEF elections for my Japanese investments that no one online could answer clearly. The IRS agent was able to confirm exactly what supporting documentation I needed to include with my form and explained how the reasonable cause statement needed to be structured. Saved me from potentially having my election rejected.

I have to admit I was wrong about Claimyr. After commenting here, I decided to try it because I was desperate for answers about my Form 8621 situation with multiple PFICs. I got connected to an IRS international tax specialist in about 20 minutes. The agent explained that I had been overthinking parts of the form. For section 6 (the annual tax calculation), they confirmed I only needed to complete it for funds that had made distributions or that I had sold shares of. For my employee investment plan shares that I'm just holding, much less reporting was required than I thought. They also explained how to properly aggregate similar funds on the form to reduce the number of forms needed. This literally saved me hours of work and potential mistakes!

Form 8621 is definitely one of the most complex forms for individual taxpayers. I've been filing it for 3 years for my Korean mutual funds. My advice: 1. Create a spreadsheet to track each PFIC separately from day one 2. If possible, make a QEF election in the first year 3. Keep meticulous records of all transactions 4. Use tax software specifically designed for expats The first year took me about 15 hours to figure everything out. By year 3, I was down to about 2 hours total. The key is proper organization of information.

I actually gave up and closed my foreign investment accounts after dealing with Form 8621 for two years. The compliance burden was just too much for the relatively small investment. If your Japanese employee investment isn't too large, honestly consider taking the cash option next time.

I'm currently dealing with a similar situation - US citizen in Germany with what appears to be PFIC investments through my employer's pension scheme. After reading through all these responses, I'm leaning toward hiring a professional for the first year and then potentially handling it myself once I understand the process better. One thing I'm curious about - for those who've successfully filed Form 8621, how do you handle the foreign currency conversions for all the required calculations? The IRS instructions mention using exchange rates from the dates of transactions, but tracking daily exchange rates for every dividend or reinvestment seems incredibly tedious. Do you use average rates for the year, or is there a simpler approach that's still compliant? Also, has anyone dealt with employer-sponsored investment plans where the fund company won't provide the detailed information needed for QEF elections? I'm wondering if there's a standard process for documenting that you requested the information but couldn't obtain it.

I went through this exact same situation last year with a Japanese employee investment fund! The 49-hour estimate is definitely scary, but here's what I learned: First, confirm it's actually a PFIC - most Japanese mutual funds qualify, but some employer schemes might be structured differently. Contact your HR department to get the fund's annual report or prospectus in English if possible. For the form itself, I spent about 8 hours total my first year (including research time), not 49. The key sections you'll likely need are: - Part I (general information about each fund) - Part II (elections - this is crucial and affects future years) - Part VI (if you received distributions or sold shares) My biggest mistake was trying to make a QEF election without proper documentation from the Japanese fund company. Like others mentioned, most Japanese funds can't provide the detailed income breakdowns needed. I ended up going with mark-to-market method instead. Pro tip: If your investment is relatively small (under $25k), seriously consider the cash bonus option next time. The annual compliance headache might not be worth it. But if you're already locked in for 5 years, definitely get professional help for year 1 to set up proper record-keeping and make the right elections. The mistakes you make in the first year follow you for the entire holding period. Good luck! It's manageable once you get through the initial learning curve.