This is a problem that is going to become more and more significant. As a result Dr. Kish and I have authored a separate “PFIC” submission – dated February 6, 2015 – which we have submitted to the U.S. Senate Finance Committee.
This submission is titled: “Request for PFIC Tax Rules Changes for U.S. Citizens Overseas”.
It is intended to be a further elaboration of the “PFIC rules” component of the January 17 2014 submission made to the Senate Finance Committee by Richardson, Yates, and Kish entitled “Request for Tax Rule Changes for U.S. Citizens Overseas.”
Our first submission provided general recommendations and analysis and included only a limited discussion on the PFIC tax rules (pages 21-24). This new submission by two of the co-authors (Mr. Yates is not part of the new submission) provides a detailed and, what we believe to be, important discussion and analysis of the PFIC rules with a specific recommendation to the committee.
The world of PFICs is extremely complicated and confiscatory. The message for U.S. citizens abroad who have purchased mutual funds (and similar investment vehicles) in their country of residence is:
Do NOT buy more and get professional advice for how to deal with the ones you have.
Enjoy (to the extent that it is possible when reading about PFICs).