Forgetting to file PFICs can leave your tax return open forever. CPA Matthew Hitchcock explains why expats can’t ignore PFIC compliance.

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Transcript:
Iso what is your advice for people who are now like
kind of having to really kind of
reconcile
the fact that maybe the tax returns were incorrectly
they never picked up these PFICs
they didn't even know what PFICs were or
or that they had them yeah
so I mean I think the
the biggest issue that you run into
when you fail to report PFICs
is that the statue of limitations
to examine that tax return stays open indefinitely
so and
and what that means is
is generally when you file a tax return
the IRS
has three years from the due date of the tax return or
or when you file it whichever is later
to examine a tax return
and make adjustments to that tax return
in some scenarios it
it can be six years
if there's a substantial omission of income
but but generally speaking
three years from the due date of the tax return
or when you file whichever is later
so if you fail to report a PFIC
so your
your advisor invested you in foreign mutual funds
you did your Turbotax tax return and then your CPA says
hey where's
where are these form 86
20 ones that are used to report PFICs
and you say what's an 86 21
the
the real risk that you run is that at any point in time
indefinitely into the future
if one of your returns were to get examined
they could open up and examine a return where you
you you didn't report that PFIC
so I I think that's the the biggest risk

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