South Korea's IRP Pension Account: IRS Reporting for US Expats

The IRP (Individual Retirement Pension) is South Korea's individual retirement account, where workers can make voluntary contributions on top of any employer-sponsored DC or DB pension plan, with Korean tax deductions for contributions up to certain limits. Contributions to an IRP are deductible in Korea and the account grows tax-deferred in Korea, but the IRS does not grant these same benefits to US persons. Employee and employer contributions are not deductible on a US return, and earnings inside the IRP are generally subject to current US income tax each year. Like most foreign retirement vehicles, the funds held inside an IRP are likely South Korean managed products that may qualify as PFICs, adding Form 8621 reporting obligations. The IRP must be reported on FBAR if aggregate foreign account balances exceed $10,000, and on Form 8938 if the individual balance crosses that form's threshold.