If you are a US citizen or permanent resident and have been living and working outside the US and investing your savings through a non-US financial institution, you need to learn what a Passive Foreign Investment Company (PFIC) is very quickly.
Why? Because the passage of the Foreign Account Tax Compliance Act (FATCA) in 2010 is ushering in a new era of dramatically heightened enforcement of US laws regarding taxation of and reporting on investments held outside the country by US Citizens or permanent residents
PFIC rules generally apply to investments held inside foreign pension funds, unless those pension plans are recognized by the US as “qualified” under the terms of a double-taxation treaty between the US and the host country.
If you don’t know what a PFIC is, here is PFIC 101.