This article discusses the U.S. tax rules for passive foreign investment companies, or PFICs. The historical development leading up to the enactment of the PFIC rules in 1986 is examined. Unexpected tax consequences resulting from the PFIC rules are analyzed in detail. Recommendations to modify the rules so that they do have such onerous consequences follow, concluding that the PFIC rules cannot be sufficiently fixed and should be repealed.
Monica Gianni, PFICs Gone Wild!, 29 Akron Tax J. 29 (2014), available at http://scholarship.law.ufl.edu/facultypub/586