Can I bypass tax form 8621 because I don't need it?

[mhergenne1965-gm]

TurboTax indicates I need to fill out IRS Form 8621 and paper file.  My financial advisor said I don't need the form based on the IRA investments.

[ThomasM125]

Form 8621 Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund applies to stock ownership in a Qualifying Insurance Corporation or a Passive Investment Corporation (PFIC). It is governed by IRS code section 7701(a)(37) that does make reference to an exemption from filing if the shareholder is the owner of an individual retirement account that holds the investment, as defined under IRS code section 408(a). However, that only seems to apply to ownership in a PFIC, not a Qualifying Insurance Corporation. I'm not sure  which investment you are dealing with, but that may be why your investment advisor says you are not required to file it.

It is a very technical part of tax law, and as such is surely beyond the skill level of most tax experts. So I must defer to the expertise of the professionals at TurboTax that write the program on this subject. Without knowing what information you entered into TurboTax to generate the form, I cannot comment more on it. However, one thing is clear and that is if you don't file the form and the IRS takes exception to that, your TurboTax accuracy guarantee would be void as it pertains to the matter.

[mhergenne1965-gm]

I just don't understand the message in the program about the Form 8621.  Nothing about our 2021 income is different from 2020.  We didn't need this form in 2020.  The program also doesn't give any hint about what Company triggered the need.  Very frustrating.

[DaveF1006]

Tax form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, is used to report income from foreign mutual funds, also referred to as passive foreign investment companies (PFICs). Are you reporting  Foreign Mutual Funds information in your return or do you have a K1 that may be reporting them?

[Sandley61]

I believe that mutual and bond funds are being considered to have some foreign company exposure. If one has taken an RMD or withdrawal from another retirement savings, needing Form 8606,I am sure that triggers the need for Form 8621. This is my first year to have a need for 8621, having used Turbo-Tax since 2009.

Following is from Form 8621, Who Needs To File:

However, a U.S. person that owns
stock of a PFIC through a tax-exempt
organization or account described in the
list below is not treated as a shareholder
of the PFIC.
• An organization or an account that is
exempt from tax under section 501(a)
because it is described in section
501(c), 501(d), or 401(a).
• A state college or university
described in section 511(a)(2)(B).
• A plan described in section 403(b) or
457(b).
• An individual retirement plan or
annuity as defined in section 7701(a)
(37).
• A qualified tuition program described
in section 529 or 530.
• A qualified ABLE program described
in section 529A.

[GeorgeM777]

@Sandley61  To add to DaveF1006, whether you need to file Form 8621 at all is an issue for which we cannot offer advice.  However, if after review of the matter, you decide that such form is not necessary, here are the steps to delete it in TurboTax online.

1. Open or continue your return in TurboTax.
2. In the left menu, select Tax Tools and then Tools.
3. In the pop-up window Tool Center, choose Delete a form.
4. Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

Here is a link to a TurboTax article discussing how to delete a form which you also may find helpful.

How to View and Delete Forms in TurboTax Online