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QUESTION:
I was not made aware of the new reporting requirements under Rev.Proc. =
2002-23 until February 2004 when I started receiving the IRS's 1099 =
forms for interest income and dividend income that I was receiving on my =
RRSPs. My husband & I have lived in the US for 5 years but have left =
our RRSPs in Canada. We no longer contribute and the distributions are =
left in the RRSPs.
In doing research I found that I should have made the election discussed =
under Proc.2002-23, but missed the deadlines.
My questions are, can I make the election now and not include the 1099 =
interest and dividend income on my 1040 Form? If I am allowed to do =
this do I follow Notice 2003-75, section 2 issued by the IRS? Lastly, =
if I do not do any withdrawals from the RRSPs do I have to file Form =
3520?
Your answers would be GREATLY appreciated.
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
david ingram replies:
You are safe: 2003-75 really does not say anything more than was asked =
for on 2002-23. The reason that 2003-75 came out was bulletin 2003-25 =
which was murderous and caused all sorts of problems for many people.
You can see 2003-25 at: http://www.irs.gov/pub/irs-drop/n-03-25.pdf
and you can read comment in the National Post by going to www.centa.com =
and clicking on (reading) the two parts of the August 2003 newsletter.
To really go back, when you moved to the US, you were subject to =
REV.PROC 1989-45 which was almost identical to 2002-23.
File your election. You do NOT have to do a 3520. The new form cited =
in 2003-75 has NOT been released. Just answer their questions on a =
piece of paper and send it in for each RRSP you have in Canada.
Incidentally, if you have been constrained from dealing with your RRSP =
accounts because you are a non-resident, I have an individual in =
Vancouver who can look after your accounts in the US. I do NOT give his =
name out willy-nilly because he is too busy to deal with very small =
accounts (which should likely be cashed in). However if your combined =
accounts are in the $50,000 range, I would be pleased to give you his =
name.
Please note that if you missed the RRSP reporting, the odds are =
that you missed the really big one, the deadly TD- F-90.22 form which =
deals with foreign (in the USA, a Canadian account is foreign) financial =
accounts and has penalties of up to $500,000 PLUS 5 up to 5 years in =
jail for failure to report.
You can find the questions at the bottom of Schedule B of your =
1040.
See form TD F-90 at http://www.irs.gov/pub/irs-fill/f9022-1.pdf - =
look at the fine print at the bottom
=20
Internal Revenue Bulletin: 2003-50 =20
December 15, 2003 =20
Notice 2003-75=20
RRSP and RRIF Information Reporting=20
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Table of Contents
a.. SECTION 1. BACKGROUND.=20
b.. SECTION 2. NEW REPORTING REGIME.=20
c.. SECTION 3. SECTIONS 6048 AND 6677 ARE NOT APPLICABLE=20
d.. SECTION 4. EFFECT ON OTHER DOCUMENTS.=20
e.. SECTION 5. EFFECTIVE DATE.=20
f.. SECTION 6. PAPERWORK REDUCTION ACT.=20
g.. SECTION 7. DRAFTING INFORMATION.=20
SECTION 1. BACKGROUND.=20
Notice 2003-25, 2003-18 I.R.B. 855, and Notice 2003-57, =
2003-34 I.R.B. 397, provided guidance to taxpayers regarding their 2002 =
taxable year information reporting obligations with respect to Canadian =
registered retirement savings plans (=93RRSPs=94) and registered =
retirement income funds (=93RRIFs=94). These Notices stated that =
Treasury and the IRS intended to develop an alternative, simplified =
reporting regime for these Canadian retirement plans for future taxable =
years.=20
This notice describes the new simplified reporting regime =
that Treasury and the IRS have developed for taxpayers who hold =
interests in RRSPs and RRIFs. The new reporting regime, which is =
effective for taxable years beginning after December 31, 2002, is in =
lieu of the filing obligations under section 6048 (Form 3520, Annual =
Return to Report Transactions With Foreign Trusts and Receipt of Certain =
Foreign Gifts, and Form 3520-A, Annual Information Return of Foreign =
Trust With a U.S. Owner) that otherwise apply to U.S. citizens and =
resident aliens who hold interests in RRSPs and RRIFs and to the =
custodians of such plans. The new simplified reporting regime is =
designed to permit taxpayers to meet their reporting obligations by =
using information that is readily available to them.=20
SECTION 2. NEW REPORTING REGIME.=20
.01. New Form. Under the authority of section 6001 of the =
Internal Revenue Code, Treasury and the IRS are designing a new form =
that a U.S. citizen or resident alien who holds an interest in an RRSP =
or RRIF must complete and attach to his or her Form 1040. The new form =
also will coordinate the reporting rules with the procedure set forth in =
section 4 of Revenue Procedure 2002-23, 2002-1 C.B. 744, for making the =
election under Article XVIII(7) of the U.S.-Canada income tax convention =
to defer U.S. income taxation of income accrued in the RRSP or RRIF.=20
.02. Interim Reporting Rules for Beneficiaries Making the =
Election to Defer U.S. Income Taxation on Income of an RRSP or RRIF. =
Until the form referred to in section 2.01 of this notice is available, =
any U.S. citizen or resident alien who is a beneficiary (as defined in =
section 2.06 of this notice) of an RRSP or RRIF and who has made the =
election described in section 4 of Revenue Procedure 2002-23 with =
respect to the RRSP or RRIF, or who is making such election effective =
for the 2003 taxable year and subsequent taxable years, must=20
1.. attach a copy of each such election to his or her Form =
1040;=20
2.. indicate the balance in each RRSP or RRIF at the end =
of the taxable year either on the copy of the election or by attaching a =
copy of a statement issued by the custodian of the RRSP or RRIF; and=20
3.. comply with section 2.05 of this notice if he or she =
has received any distributions during the taxable year from such RRSP or =
RRIF.=20
.03. Interim Reporting Rules for Beneficiaries Not Making =
the Election to Defer U.S. Income Taxation on Income of an RRSP or RRIF. =
Until the form referred to in section 2.01 of this notice is available, =
any U.S. citizen or resident alien who is a beneficiary (as defined in =
section 2.06 of this notice) of an RRSP or RRIF and who has not made the =
election described in section 4 of Revenue Procedure 2002-23 with =
respect to the RRSP or RRIF, and who is not making such election for the =
2003 taxable year, must attach a statement to his or her Form 1040 that =
includes the following information:=20
1.. The caption =93CANADIAN RRSP=94 or =93CANADIAN =
RRIF,=94 whichever is applicable;
2.. The taxpayer's name and taxpayer identification =
number;=20
3.. The taxpayer's address;
4.. The name and address of the custodian of the RRSP or =
RRIF and the plan account number, if any;
5.. The amount of contributions to the RRSP or RRIF during =
the taxable year;
6.. The undistributed earnings of the RRSP or RRIF during =
the taxable year in each of the following categories: interest, =
dividends, capital gains, and other;=20
7.. The total amount of distributions received from the =
RRSP or RRIF during the taxable year; and
8.. The balance in the RRSP or RRIF at the end of the =
taxable year.
The taxpayer must provide a separate statement for each RRSP =
or RRIF of which he or she is a beneficiary. In addition to attaching =
the statement described in this section 2.03 to his or her Form 1040, =
the taxpayer must report the undistributed earnings for that taxable =
year of all such RRSPs and RRIFs on Schedule B (Interest and Ordinary =
Dividends) or D (Capital Gains and Losses), as appropriate, and on line =
8a, 9, 13, or 21 of the Form 1040. The taxpayer must also comply with =
section 2.05 of this notice if the taxpayer has received any =
distributions during the taxable year from such RRSP or RRIF.=20
.04. Interim Reporting Rules for Annuitants of RRSPs and =
RRIFs. Until the form referred to in section 2.01 of this notice is =
available, if a U.S. citizen or resident alien is an annuitant (as =
defined in section 2.06 of this notice) under an RRSP or RRIF that has =
no beneficiary (as defined in section 2.06 of this notice), and the =
annuitant receives a distribution from the RRSP or RRIF, the annuitant =
must in the year of distribution attach a statement to his or her Form =
1040 that includes the following information:=20
1.. The caption =93ANNUITANT UNDER CANADIAN RRSP=94 or =
=93ANNUITANT UNDER CANADIAN RRIF,=94 whichever is applicable;
2.. The annuitant's name and taxpayer identification =
number;=20
3.. The annuitant's address;
4.. The name and address of the custodian of the RRSP or =
RRIF and the plan account number, if any;
5.. The total amount of distributions received from the =
RRSP or RRIF during the taxable year; and
6.. The balance in the RRSP or RRIF at the end of the =
taxable year.
The annuitant must provide a separate statement for each =
such RRSP or RRIF from which he or she has received a distribution =
during the taxable year. The annuitant must comply with section 2.05 of =
this notice with respect to such distributions.=20
.05. Distributions. A U.S. citizen or resident alien who has =
received any distributions during the taxable year from an RRSP or RRIF =
must report the total amount of distributions received during the =
taxable year from all such RRSPs and RRIFs on line 16a of the Form 1040 =
and the taxable amount of all such distributions (as determined under =
section 72) on line 16b of the Form 1040.=20
.06. Definition of Beneficiary and Annuitant. For purposes =
of the new simplified reporting regime described in this notice, a =
beneficiary of an RRSP or RRIF is an individual who is subject to =
current U.S. income taxation on income accrued in the RRSP or RRIF or =
would be subject to such taxation had the individual not made the =
election under Article XVIII(7) of the U.S.-Canada income tax convention =
to defer U.S. income taxation of income accrued in the RRSP or RRIF. For =
these purposes, an annuitant of an RRSP or RRIF is an individual who is =
designated pursuant to the RRSP or RRIF as an annuitant.=20
.07. Record Retention. Taxpayers must retain supporting =
documentation relating to information required by the new reporting =
regime, including Canadian Forms T4RSP, T4RIF, or NR4, and periodic or =
annual statements issued by the custodian of the RRSP or RRIF.=20
SECTION 3. SECTIONS 6048 AND 6677 ARE NOT APPLICABLE=20
The new simplified reporting regime, instituted under the =
authority of section 6001, provides the information needed for tax =
compliance purposes. Therefore, pursuant to section 6048(d)(4), no =
reporting will be required under section 6048 with respect to RRSPs and =
RRIFs that have beneficiaries or annuitants who are subject to the new =
simplified reporting regime. Accordingly, the associated penalties =
described in section 6677 do not apply to such RRSPs and RRIFs and their =
beneficiaries or annuitants. A beneficiary or annuitant of an RRSP or =
RRIF may, however, be subject to other penalties.=20
SECTION 4. EFFECT ON OTHER DOCUMENTS.=20
Notice 2003-25, Notice 2003-57, and section II.E of Notice =
97-34 (pertaining to reporting for certain transfers to RRSPs), 1997-1 =
C.B. 422, are superseded to the extent inconsistent with this notice.=20
SECTION 5. EFFECTIVE DATE.=20
This notice is effective for taxable years beginning after =
December 31, 2002.=20
SECTION 6. PAPERWORK REDUCTION ACT.=20
The collection of information contained in this notice has =
been reviewed and approved by the Office of Management and Budget in =
accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under =
control number 1545-1865.=20
An agency may not conduct or sponsor, and a person is not =
required to respond to, a collection of information unless the =
collection of information displays a valid OMB control number.=20
The collection of information in this notice is in section =
2. This information will be used to compute and collect the right amount =
of tax. The likely respondents are individuals.=20
The estimated total annual reporting burden under the new =
simplified reporting regime for taxpayers who hold interests in RRSPs =
and RRIFs is 1,500,000 hours. The estimated annual burden per respondent =
varies from 0.5 hour to 5 hours, depending on individual circumstances, =
with an estimated average of 2 hours. The estimated number of =
respondents is 750,000.=20
The estimated annual frequency of responses is once per =
respondent per plan.
The new simplified reporting regime substantially reduces =
the reporting burden of taxpayers who hold interests in RRSPs and RRIFs. =
Under the prior regime, the average estimated reporting burden was more =
than 50 hours per Form 3520 (more than 100 hours per respondent). In =
addition, the new simplified reporting regime eliminates the requirement =
to file Form 3520-A, reducing the burden of a custodian by more than 40 =
hours per RRSP or RRIF.=20
Books or records relating to a collection of information =
must be retained as long as their contents may become material in the =
administration of any internal revenue law. Generally, tax returns and =
tax return information are confidential, as required by 26 U.S.C. 6103.=20
SECTION 7. DRAFTING INFORMATION.=20
The principal author of this notice is Willard W. Yates of =
the Office of Associate Chief Counsel (International). For further =
information regarding this notice, contact Willard W. Yates at (202) =
622-3880 (not a toll-free call).=20
=20
Answers to this and other similar questions can be obtained free =
on Air every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of =
Cartier Partners and I will be hosting an INFOMERCIAL but LIVE talk show =
called "ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the =
internet at
www.600AM.com=20
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This from ask an income tax immigration planning and bankruptcy =
expert consultant guru or preparer from www.centa.com or www.jurock.com =
or www.featureweb.com. Canadian David Ingram deals daily with tax =
returns dealing with expatriate:
multi jurisdictional cross and trans border expatriate gambling =
refunds for the United States, Canada, Mexico, Great Britain, the United =
Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, =
Indonesia, Egypt, Antarctica, Japan, China, New Zealand, France, =
Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, =
Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, =
Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, =
Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, =
US, UK, GB, American and Canadian and Mexican and any of the 43 states =
with state tax returns, etc.
income tax wizard wizzard guru advisor advisors experts =
specialist specialists consultants taxmen taxman tax woman planner =
planning preparer of Alaska, Alabama, Arkansas, Arizona,=20
California, Colorado, Connecticut, =20
Delaware, District of Columbia, Florida,=20
Garland, Georgia, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Kentucky,=20
Louisiana, Maine, Maryland, =20
Massachusetts, Michigan, Minnesota, =20
Mississippi, Missouri, Montana, Nebraska, =20
Nevada, New Hampshire, New Jersey,=20
New Mexico,New York, North Carolina, =20
North Dakota, Ohio, Oklahoma, Oregon.=20
Paris, Rome, Sydney, Australia Hilton
Pennsylvania, Rhode Island, Rockwall,=20
South Carolina, South Dakota, Tennessee, =20
Texas, Utah, Vermont, Virginia,=20
West Virginia, Wisconsin, Wyoming,=20
British Columbia, Alberta, Saskatchewan,=20
Manitoba, Ontario, Quebec City,=20
New Brunswick, Prince Edward Island,=20
Nova Scotia, Newfoundland, Yukon and=20
Northwest and Nunavit Territories, =20
Mount Vernon, Eumenclaw, Coos Bay=20
and Dallas Houston Rockwall Garland=20
Texas Taxman and Tax Guru and wizzard=20
wizard - David Ingram's US/Canada Services
US/Canada/Mexico Tax Immigration & working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321=20
[email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed =
information or consultation and is to be regarded only as general =
comment. Nothing in this message is or should be construed as advice =
in any particular circumstances. No contract exists between the reader & =
the author and any and all non-contractual duties are expressly denied. =
All readers should obtain formal advice from a competent financial, or =
real estate planner or advisor & appropriately qualified legal =
practitioner, tax or immigration specialist in connection with personal =
or business affairs such as at www.centa.com. If you forward this =
message, this disclaimer must be included."
=20
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