MFA Letter on PFIC Reporting

On March 28, MFA submitted a letter to the IRS encouraging the IRS to exclude funds that mark their assets to market under Section 475(f) of the Tax Code from the requirement to report holdings in passive foreign investment companies (PFICs) on Form 8621.  In the letter, MFA noted that funds making a 475(f) election generally are not subject to PFIC rules under the Tax Code and that such funds do not present the policy concerns underlying the PFIC rules.  MFA further noted that, because funds making a 475(f) election treat PFIC investments the same as other investments from a substantive tax perspective, the additional tracking and reporting that would be required would present significant burdens on taxpayers without providing the IRS with meaningful information.

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