A significant number of Offshore Voluntary Disclosure Practice cases (remember the Swiss Bank Accounts) involve Passive Foreign Investment Company (PFIC) investments. A lack of historical information on the cost basis and holding period of many PFIC investments, the Service notes, may make it difficult for taxpayers to prepare statutory PFIC computations and for the Internal Revenue Service to verify them. As a result, resolution of many Disclosure Practice cases are said to be unduly delayed. Therefore, for purposes of this initiative, the Internal Revenue Service is offering taxpayers an alternative to the statutory PFIC computation that will resolve PFIC issues on a basis that is consistent with the Mark to Market (MTM) methodology authorized in Internal Revenue Code section 1296 but will not require complete reconstruction of historical data.
Posts Tagged ‘PFIC’
Passive Foreign Investment Company Special Disclosure Tax
Posted by William Byrnes on February 27, 2011
Posted in Tax Policy | Tagged: Banking in Switzerland, Internal Revenue Service, Investment, Passive Foreign Investment Company, PFIC, tax | Leave a Comment »
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