Dear Mr. Ingram:
I am writing to get some information about your services and fees.
Below is some background about my situation and the help I seek.
I am a 36-year-old US citizen who moved to Canada in 1990 and worked
as a landed immigrant until departing Canada in February 1999. I hold
an RRSP account in Canada valued at roughly $100,000 Cdn. For reasons
including the current favorable Cdn/US exchange rate, my desire to
have the funds to use as a down payment to purchase a home and the
unlikelihood of my ever returning to Canada to live, it appears to be
a good time to cash out my RRSP account.
I have reported holdings of my foreign account(s) to the US Department
of the Treasury for the years I have held my RRSP, both when I lived
in Canada and after returning to the US. Upon returning to the US, I
lived in California from February 1999 until December 2000; I moved to
Illinois in January 2001 and resided there until June 2002; Since
August 2002, I have lived in New Jersey. The only reporting I have
made to the IRS is in checking off “Yes” in the box on Schedule "B"
(Form 1040) under Part III - Foreign Accounts and Trusts and in
checking "No" immediately below indicating that I did NOT collapse any
of my RRSP account.
In considering cashing out my RRSP, I just discovered via the Internet
that in 2003 new IRS rules were implemented that required me to
provide information to the IRS, not just treasury, related to my RRSP
account (Rev Proc 2003-25). I further understand that I could face
severe penalties/fines for not doing this. Before I touch my RRSPs, I
want to be sure that I have provided the IRS with documentation they
require (Form 3520A etc.).
Even though I do my own taxes, I am seeking professional tax counsel
for completing the necessary forms, as I want to be sure that I avoid
any potential problems/penalties with the IRS. Can you tell me what
it would cost to have you prepare the appropriate documents needed to
send to the IRS about my RRSP? I believe 2002 is the farthest back I
would need to go. Thank you for your help. I look forward to your
reply.
C xxxxxxxxxxx
-----------------------------------------------
david ingram replies:
The law about internal reporting was originally passed by REV-PROC
1989-45 and was in existence until the more heavily handed REV-PROC
2002-23 came out. Technically and legally, you should have been
reporting each year since you went to the USA. However, you are
correct, 2002, 2003 and 2004 are the important years.
Our usual fee for catching these up is $300 CDN per year for one RRSP
and $100.00 more for each extra RRSP.
To do the catch up we need copies of pages 1, 2 and schedule A of your
2002, 2003 and 2004 returns.
We also need the Dec 31, 2001, Dec 31, 2002, Dec 31 2003 and Dec 31
2004 year end statements for each RRSP.
I agree with you. It would likely be a good time to cash out and buy
a house in the USA.
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 Dundee
Wealth Management and I, David Ingram host a 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
Local calls are taken at (604) 280-0600 and Long Distance calls (BC
only) are taken at 1( 866) 778-0600
Callers to the show are invited to attend free seminars on financial
planning with such specialities as deductible mortgage interest. They
are held at Fred Snyder's Office at 1764 West 7th in Vancouver - (604)
731-8900 for more information.
=========================================
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321 Fax (604) 980-0325
Email to taxman at centa.com
www.centa.com www.david-ingram.com
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