Resident alien with long-held Italian investment accounts — how did you handle the PFIC/8621 cleanup?
Non-US-citizen, became a US tax resident in 2023. Filing MFS in a community property state. I've held Italian investment accounts and a life insurance/investment policy for ~15–20 years.
My previous preparer filed my FBARs and 8938 for 2023–24 but only ever asked me for realized gains — PFICs never came up. I am preparing my 2025 federal return, which happens to be the first time I am having to report a realized gain. This made me look deeper into it all, which made me realize that my Italian funds are almost certainly PFICs; I sold one small fund in 2025 (~€5k lifetime gain) that now needs a §1291 Form 8621; and I likely have missed 8621s for 2023–24 plus an unaddressed §7702 question on the life insurance policy.
Not looking for solutions but I'd really like to hear from people who've actually been through this:
- My accounts were already disclosed on FBAR/8938 and income was reported (only the 8621 forms are missing). Did you go SDOP (5% penalty) or amend the back years with a reasonable-cause statement for the missing 8621s? What did your preparer advise, and how did it land with the IRS?
- How did you get a foreign life insurance policy assessed for §7702/PFIC — and did it turn out manageable or ugly?
- How did you find someone who genuinely handles inbound (foreign national in the US) PFIC + foreign-insurance work, not just outbound expats — and roughly what did it cost? Recommendations for preparers with experience ion this area would be welcome, though I am bracing for an ugly hit.
Thanks — trying to learn from others' experience before committing to a path.