This is Part 7 of a focused guide on PFICs, Form 8621, and U.S. tax traps for global investors.
Part 1 . Part 2 . Part 3 . Part 4 . Part 5 . Part 6 . Part 7 . Part 8
If this applies to you or someone you know - subscribe to get the rest of the series - before the IRS catches up.
Overview
Navigating PFICs is not a do-it-yourself job. But hiring a CPA is also not a magic fix—especially if they don’t specialize in international tax or PFIC compliance.
This article explains how to prepare for working with a CPA, what to expect in terms of costs and process, and how to spot whether they actually know what they’re doing.
Why Most CPAs Don’t Handle PFICs
PFIC rules are:
Niche
Complex
Time-intensive to model and file correctly (especially Form 8621)
Many CPAs (especially those focused on domestic U.S. clients) will either:
Skip the form entirely
File it incorrectly
Or suggest “selling and moving on” without realizing it triggers a taxable event
Before You Meet a CPA: What to Gather
Having these ready will save you money and avoid extra back-and-forth:
✅ A list of all foreign mutual funds and ETFs you’ve owned while a U.S. resident
✅ Purchase date and cost basis (in local currency and USD)
✅ Your U.S. tax residency start date
✅ Any distributions received (dividends, sales, redemptions)
✅ Past U.S. tax returns and any filed Form 8621s
✅ Any foreign tax paid on those investments
✅ Documentation from the fund (fact sheet, ISIN, QEF availability if applicable)
What a Competent PFIC CPA Will Do
Determine if your fund is a PFIC based on legal domicile and IRS criteria
Assess whether you qualify for MTM or QEF elections
Help you file Form 8621 correctly, including lookback calculations if needed
Walk you through implications before you sell or take income from a PFIC
They will also:
Be upfront about what they know vs. what they need to research
Likely work with software tools (e.g., PFIC calculators)
Recommend strategic elections rather than defaulting to “just pay the tax”
Red Flags to Watch For
🚩 “What’s a PFIC?”
🚩 “That doesn’t apply to you—you’re not a citizen”
🚩 “Just sell it and file normally”
🚩 “We can just skip Form 8621”
🚩 “That’s only for offshore accounts”
These are signs your CPA is not equipped to handle this. You need someone who handles Form 8621s regularly and can clearly explain how PFIC elections work.
What It Might Cost
PFIC tax prep is more expensive than standard tax filing. Expect:
$500–$1,500 per PFIC per year in filing costs (although there are some online providers that charge between $50-$150 per PFIC)
Additional time if elections, sales, or redemptions occurred
Good CPAs will give you a quote after reviewing your holdings.
Working With Your CPA Efficiently
✅ Be organized—come with documents and a timeline
✅ Ask about their PFIC experience directly
✅ Prioritize funds with the biggest exposure or unrealized gains
✅ Don’t wait until a sale—get ahead of the tax event
This is Part 7 of a focused guide on PFICs, Form 8621, and U.S. tax traps for global investors.
Part 1 . Part 2 . Part 3 . Part 4 . Part 5 . Part 6 . Part 7 . Part 8
If this applies to you or someone you know - subscribe to get the rest of the series - before the IRS catches up.