Posts Tagged ‘RRSP’

IRS Simplifies Reporting for RRSPs and RRIFs

Tuesday, October 7th, 2014

In a piece of good news, the IRS announced today that US taxpayers will automatically be treated as deferring income from Canadian Registered Retirement Savings Plans (RRSPs) and Canadian Registered Retirement Income Funds (RRIFs). In other words, the treatment will be exactly like 401(k)s are treated for Americans. Such individuals will no longer have to make annual filings of Form 8891 to note their holdings for RRSPs or RRIfs.

The noncompliance with this provision was legion, so the new Revenue Procedure 2014-55 is good news. Individuals who were not in compliance had to file a request for a Private Letter Ruling in order to “get out of jail free” (so to speak). The Revenue Procedure includes retroactive relief.

However, such individuals will still need to note these accounts on their FBARs (Report of Foreign Bank and Financial Accounts, Form 114). Note also that at least one state (California) does not recognize deferral or RRSP income, so holders of RRSPs who are required to file California tax returns must report their income on their state tax returns.

IRS Announces New Procedure on RRSPs; Jaywalkers Apparently No Longer Subject to Firing Squad

Wednesday, June 27th, 2012

The IRS announced yesterday a new procedure to deal with “low compliance risk” taxpayers who have innocently not filed FBARs or tax returns noting their RRSPs (a Canadian retirement account similar to a 401(k) or IRA). While the full details have not been released (the plan will go into effect on September 1st), it appears that the IRS has heard the complaints from tax professionals and others regarding the “one size fits all” voluntary disclosure plan.

Of course, the devil is in the details but they look reasonable at this point:
– Taxpayers will need to submit delinquent tax return for the last three years;
– Taxpayers will need to submit delinquent FBARs for the last six years; and
– Pay any tax and interest due with the submission.

Note that to qualify for the plan your unpaid taxes will need to be less than $1,500 per year.

Once the full details are announced (probably in late August) I’ll report on them.

More: Roth Tax Updates, Janet Novack