Form 8621 Penalty: Tax Return Statute of Limitations Will Not Expire
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Understanding the IRS Form 8621 Penalty
Form 8621 Penalty: PFIC (Passive Foreign Investment Reporting) to the IRS is handled by filing an annual Form 8621. The failure to file the form does not directly result in a monetary penalty. Rather, the tax return may stay open indefinitely, which can lead to other penalties.
Unfiled Form 8621 Means an Incomplete Tax Return
If the Taxpayer does not file Form 8621, the tax return may remain open for several years after the return was filed. Then, if the return is audited, it can lead to penalties resulting from the tax return that would have been closed (and no longer subject to audit), had the proper Form 8621s been filed.
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