Below is a copy of the submission the Democrats Abroad Global Taxation Task Force submitted to the Internal Revenue Service for the public comment period on Form 8621 Passive Foreign Investment Companies.
Click here to download a pdf of DA's submission to the IRS in full.
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Dear Mr. Garcia, Democrats Abroad appreciates the opportunity to comment on the Information Collection Request (“ICR”) submitted by the Internal Revenue Service (the “Agency”, “IRS”) for renewal of Form 8621, the Information Return by a Shareholder of a Passive Foreign Investment Company (“PFIC”). As the largest Americans abroad organization in the world, with hundreds of thousands of U.S. citizen members living outside the United States, we can provide firsthand insight into how Form 8621 Information Collection poses an undue burden, is applied more broadly than necessary or reasonable, and results in disparate access to financial services based solely on where a U.S. citizen lives. Although this Information Collection Request (ICR) is not directed towards individual taxpayers, we are commenting on this ICR on behalf of individual taxpayers to raise awareness of the very real burden and impact on individuals. The only other opportunity for individuals to comment on this form would be in the omnibus 1545-0074 ICR filing (related to Form 1040) – where the individual burden imposed by this form is “averaged out” and any comments on Form 8621 would be too specific for the broad nature of that information collection. We hope that the burden on individual international taxpayers will be considered in this ICR process, as they are an underserved community recognized by both the Agency and its watchdog, the Taxpayer Advocate Service. The impacts of this Information Collection are severe, resulting in:
In Appendix A we provide comment on the specific questions posed in the Federal Register Notice. We summarize our major concerns here:
Within the context of the Paperwork Reduction Act (“PRA”) and ICR, we request that the IRS:
We further propose, outside the specific context of the PRA, that the IRS undertake rulemaking to provide regulatory relief to individual taxpayers, which could include any or all of the following measures:
It is desirable, from the perspective of both American competitiveness and preventing an undue burden to the public, that all Americans be able to save for retirement and their general self-sufficiency. The application of the PFIC regime to Americans living abroad interferes with this, and we believe that a serious paperwork reduction and regulatory relief effort should be made to address this unintended barrier to saving and investing by international taxpayers. Thank you for your consideration of our comments. Sincerely,
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