SOL on failing to file form 8938 or 8621‏

What are the consequences of failing to file Form 8621?  Section 1298(f) and the regulations do not impose a specific penalty for failing to file Form 8621.  However, the regulations coordinate the Form 8621 filing requirements with the Form 8938, Statement of Specified Foreign Financial Assets, filing requirements.
Under Section 6038D, a U.S. individual must disclose any directly held foreign financial assets on Form 8938 if the aggregate value of the individual’s foreign financial assets exceeds a certain filing threshold.  An exception to this requirement applies to any foreign financial asset the individual reports on another disclosure form, such as Form 8621.
A U.S. individual shareholder who fails to disclose a directly held PFIC investment on either Form 8621 or Form 8938 can be subject to a $ 10,000 penalty under Section 6038D(d).  In addition, failure to file a required Form 8621 can result in suspension of the statute of limitations with respect to the shareholder’s entire tax return until Form 8621 is filed.
This means that the IRS could potentially have an unlimited amount of time to audit a U.S. shareholder’s tax return and assess tax if the shareholder fails to file Form 8621.  However, this comes with an important caveat.  To the extent that the shareholder has reasonable cause for failing to file Form 8621 (i.e., a defense), the statute of limitations is suspended only with respect to unreported PFIC investments and not to any unrelated portions of the shareholder’s tax return.