Form 8621 cost per fund: what PFIC reporting costs a US person living in France

You want a number, so here it is: 150 to 300 USD per fund, per year. That is the price of one Form 8621 at a US preparer who specializes in returns for Americans abroad, and the IRS instructions require a separate Form 8621 for each PFIC in which stock is held, directly or indirectly. That makes the cost per fund the single number that drives the whole invoice. Ten fund lines in your policy, ten forms: roughly 1,500 to 3,000 USD a year. Thirty lines: 4,500 to 9,000 USD, on the same money.

I am Quentin Hagnéré, a French wealth adviser (conseiller en gestion de patrimoine), registered with ORIAS under number 23002291. Published guidance on this subject usually stops at "several thousand dollars a year of compliance cost". Here are the figures behind that: what each form costs, three annual budgets, the 1% excise tax, what a catch-up year costs, and two allocations holding the same 800,000 EUR whose bills are 3,300 to 6,600 USD a year apart. Every range is dated, taken from a public price list and given as an indication. The two tables carry most of it, if that is all you need.

One fund, one Form 8621, 150 to 300 USD a year

Ten unit-linked funds, ten forms: the arithmetic

A policy holding ten unit-linked funds (unités de compte, the French name for the fund lines inside a policy) means ten forms: roughly 1,500 to 3,000 USD a year in Forms 8621 alone, or about 1,550 USD on an observed tiered schedule of 200 USD for the first form and 150 USD for each one after. Every other line count prices the same way. Take the low end from that tiered schedule and the high end at 300 USD a form: three lines come to 500 to 900 USD, twenty-five lines to 3,800 to 7,500 USD. At a flat 150 to 300 USD a form, thirty lines run to 4,500 to 9,000 USD.

That figure turns up the following spring, on the preparer's invoice, long after the funds were chosen. And switching the type of fund will not save you: a UCITS ETF is a PFIC too. Only the number of lines lowers the bill.

There is one de minimis exception: no filing where PFIC stock totals 25,000 USD or less (50,000 USD on a joint return) on the last day of the year, with no excess distribution and no election (Treasury Regulation 1.1298-1(c)(2)). On a Luxembourg policy that ceiling is in practice crossed from the outset, but check rather than assume.

Why the bill follows your fund lines, not your balance

Whether the funds inside a policy are looked at one by one, or whether the policy itself is treated as a single PFIC, is a contested technical position on which the IRS has issued no definitive guidance. It turns on how the policy is structured, and it is a matter for a French-US tax attorney or CPA. This page does not settle it, but it is the most expensive question on it: what follows shows what rides on the answer.

Two US mechanisms drive that characterization: the tax definition of life insurance (section 7702 of the Internal Revenue Code) and the investor control doctrine, which asks whether the policyholder exercises too direct a hand over the assets held inside the policy. If the wrapper is not recognized, the holder is regarded as owning the underlying funds directly: you move from the "intermediate" profile of the table below, with a single Form 8621, to the "complex" one, with a form for every line. That is the difference between roughly 200 USD and 4,500 to 9,000 USD a year in Forms 8621 alone, on the same money.

One point of French background, because the contrast is what matters here. As a French tax resident you are taxed in France and you report to the United States, and, depending on how the policy is structured, the United States may also tax its internal gains. On the French side the policy follows the assurance-vierules, France's domestic life insurance wrapper. Gains are taxed at 7.5% after eight years, behind an annual abattement, a tax-free allowance, of 4,600 EUR (9,200 EUR for a married or civil-partnered couple) that bears on income tax only. Above 150,000 EUR of premiums, measured net of withdrawals across all your policies, the rate is 12.8%. On top of that come the prélèvements sociaux, France's social levies, at 17.2%, not 18.6% (article L. 136-8, IV of the French Social Security Code).

None of that cancels the American side. The treaty of 31 August 1994 prevents double taxation, not double reporting: its savings clause (article 29(2)) expressly lets the United States tax its own citizens as if the treaty did not exist. And the French filing itself, form 3916 / 3916-bis under article 1649 AA of the French General Tax Code, costs nothing; the American one is what you pay a preparer for. The one thing Luxembourg does not do is make it worse. Luxembourg adds no tax and no US form: this is a US cost, and it would be identical on a French policy holding the same number of funds.

What each form costs, form by form

These are preparation fees billed in the United States, on top of your policy charges, and set by neither the insurer nor this firm. The Form 720 row is the exception: that one is a tax.

Form 720 is quarterly, not annual, which is the trap in that table. The 3520 / 3520-A line stays conditional: it covers only the case, to be analyzed, where the policy or the structure would be recharacterized as a foreign trust. And at some preparers the FBAR and Form 8938 are themselves priced by the number of accounts: the price follows the number of lines, not the amount, right across the invoice. Many taxpayers cross the FBAR threshold of 10,000 USD while staying below the Form 8938 threshold, markedly higher outside the United States (200,000 USD on the last day of the year or 300,000 USD at any point in it for a single filer; 400,000 USD or 600,000 USD on the same tests on a joint return).

These ranges do not include a tax attorney, whose rates are materially higher. Within the preparer market alone, an expatriate return billed by the hour runs at around 180 USD an hour for fifteen to twenty hours, which comes to 2,700 to 3,600 USD, compared with 565 to 800 USD on a flat fee, on the same indicative basis as the table above.

Your total annual bill: three profiles

Now add it up. The ranges below are those of a specialist preparer or a CPA working on a flat fee, not a law firm.

These are flat fees actually observed. Do not try to reconstruct them by adding up the rows of the previous table: preparers bill by the return, and a real return, with a foreign tax credit, several accounts and non-salary income, comes in above the sum of the unit prices.

Why do published figures run from 150 USD to several hundred per form? Because those 150 to 300 USD are flat fees for a standard return. As soon as a fund throws off an excess distribution falling under the default regime (section 1291), preparation is frequently billed by the hour, and the cost per form can be several times higher. In practice it is a fixed floor plus a variable block, and only the second moves.

One last thing on the arithmetic: these fees are not deductible from your French taxable income, and no French tax reduction applies to them. This is a net cost, funded after tax.

The 1% excise tax, and what the first year costs

A 1% federal excise tax applies in principle to premiums paid to a foreign insurer (section 4371(2) of the Internal Revenue Code). Section 4372(e) defines the covered policy by reference to the status of the insured, a citizen or resident of the United States, and not to where that person lives, so being resident in France does not take you outside its scope. It is reported on Form 720, Quarterly Federal Excise Tax Return, under IRS No. 30. This 1% is a tax, not a preparation fee: it adds to the budget above rather than replacing part of it. On a premium of 500,000 EUR that comes to 5,000 EUR, about 5,500 USD at the rate used below, or a whole year of Forms 8621 on a twenty-five-line policy. It is a one-off charge on each premium, not an annual charge on the policy value.

The first year, if you are catching up

A catch-up package from a specialist preparer sits at about 1,500 to 1,900 USD and covers three years of federal returns and up to six FBARs. One published schedule quotes a figure close to 1,860 USD as a starting price, so read it as a floor rather than a typical cost. What the package leaves out is the Forms 8621, which have to be rebuilt for each of those three years: three years multiplied by the number of fund lines. On a ten-line policy that is thirty extra forms. None of the published catch-up schedules we reviewed lists them separately.

The relevant procedures for taxpayers living outside the United States are the Streamlined Foreign Offshore Procedures, which carry strict conditions, including a requirement that the failure to file was non-wilful. We do not operate these procedures and we express no view on your eligibility: this page gives no US legal or tax advice. A case handled by a French-US tax attorney is an entirely different order of magnitude: the flat fee covers the data entry; the attorney covers the decision of what to report, the drafting of the certification and its defense on audit.

Two allocations, the same 800,000 EUR, two very different bills

Diane, 58, Nantes. A French-American dual national, tax resident in France and up to date with her US filings, married to a French spouse who is not a US person. She holds a Luxembourg policy of 800,000 EUR spread over twenty-five fund lines, and has asked an American preparer to price two scenarios: her current allocation, and the simplified three-line allocation she is considering. The two quotes are several thousand dollars a year apart, at identical policy value, identical insurer and identical policy charges.

The gap comes out at 3,300 to 6,600 USD a year. Only the number of lines changes. Over ten years, on unchanged assumptions, that works out at 33,000 to 66,000 USD, or 3.75% to 7.5% of the initial policy value. The policy's own charges run from 0.40% to 1.50%, so this filing cost comes to between half of them and more than all of them, and it funds no investment management. One caveat: once the twenty-five lines have been bought, simplifying means internal switches, so disposals to report on that year's Forms 8621, extra work billed in the very year you simplify.

The threshold that matters is a line count

4,000 USD per year  /  0.5%  =  800,000 USD of policy value
800,000 USD  /  1.08 to 1.15 USD to the euro  =  about 700,000 to 740,000 EUR

Preparers quote flat fees; investors think in basis points. Converting one into the other: the all-in charges of a Luxembourg policy run from 0.40% to 1.50% a year, so a compliance cost of 0.5% is between half and more than all of the policy charges. Do not confuse two thresholds, either: the threshold at which a Luxembourg policy makes sense in itself, in the order of 250,000 EUR depending on the case, has nothing to do with US status, and the threshold discussed here sits on top of it. Read it as a ratio: no insurer imposes a minimum on account of US status.

And the euro figure answers the wrong question. A policyholder with 400,000 EUR across two lines is better placed than one with 900,000 EUR across thirty: the first will pay roughly 1,000 to 1,800 USD a year, the second can go past 9,000 USD. Going from thirty lines to four saves some 3,900 to 7,800 USD a year; going from 400,000 to 900,000 EUR saves nothing at all.

Of the levers available, only one is really under your control. The number of fund lines: every line removed is 150 to 300 USD less each year, indefinitely. Moving part of the allocation into direct shareholdings (titres vifs, shares held outright, which are not PFICs), at the cost of a different risk profile, more monitoring, and no relief at all on the funds you keep. And the structure of the policy, the most powerful lever, but not one that is yours to pull: it depends on the characterization your US adviser adopts, and that characterization remains contested.

Specialist preparer or do it yourself?

There is a cheaper route, with limits worth knowing before taking it. Dedicated Form 8621 self-preparation software charges about 75 USD per form (74.95 USD on a price list effective 1 January 2024, as observed on 28 July 2026), plus a compulsory annual subscription of about 60 USD (59.40 USD), which is easy to miss on the pricing page. Ten lines therefore come to roughly 810 USD, compared with 1,500 to 3,000 USD at a preparer, so roughly half on paper.

Two further costs sit outside that comparison. Technical support runs at around 150 USD per thirty minutes and is not always open to single-form buyers, so one question about an excess distribution wipes out the saving on two forms. And the same publisher charges about 165 USD per form once you hand over the data entry. Even with the cheapest provider, delegating puts you straight back in the 150 to 300 USD band. Consumer tax software does not produce the form or the elections at all.

Our view: workable on two or three lines held all year with no withdrawal. The moment there is an excess distribution to compute, a year to catch up or an election to make, the software will not tell you whether you have taken the right position. One wrong position costs more than the fees saved, which is why the route is set out here rather than recommended.

When this cost makes the policy pointless

There are cases we turn down, because the compliance cost is indefensible whatever the policy is worth.

How Hagnéré Patrimoine can help

We put a number on the budget before we talk about a policy. On this kind of case we start with an estimate of the annual compliance cost, line by line: the base filings first, then the number of Forms 8621 the allocation under consideration would imply. The investment proposal comes afterwards. Without that figure, you are weighing a hoped-for return against an unknown charge.

Where a case is submitted for a US person who is tax resident in France, it goes to our partner insurers, none of which is bound to consider it. The allocation we build is deliberately kept short on fund lines, the only lever within reach on this bill. We record the reason in the client file, in terms such as "allocation reduced to three lines at the client's request, on grounds of US filing cost, at the expense of diversification".

We do not prepare US tax returns. We put clients in touch with partner French-US tax attorneys or CPAs, and that cost is not included in our fees: it is borne entirely by the client. All of this is subject to the insurer's acceptance, never a given and never presented as one, acceptance policies being liable to be tightened or suspended without notice, and subject to review by a French-US tax attorney or CPA. We never guarantee the US compliance of a policy: we ask for written confirmation from the insurer and pass it on as it stands. We can review whether a policy could be arranged, subject to the insurer's acceptance; we never open one on the strength of a web page.

What this page does not cover

If your question is why are my funds treated this way, the mechanism is in our page on whether a Luxembourg policy is itself a PFIC. If it is am I actually concerned, start with our US person self-assessment. For which insurer will look at your case, and on what terms, see which insurers may consider a US person's file; this page names no company and prices compliance only. And if you are a French resident about to move to the United States, the conclusion flips: you would cease to be a French tax resident, and the answer is then often no.

Related guides

• Our full guide to Luxembourg life insurance for US persons
• Am I a US person? A self-assessment
• Is a Luxembourg life insurance policy a PFIC?
• Which insurers may consider a US person's file
• The Luxembourg security triangle and the super-privilege
• Read this guide in French