Now I'm really confused! It looks like we finally have the
long-awaited IRS Form 3520-A but now it looks like I may be
eligible to file the much simpler Form 8891 (U.S. Information
Return for Beneficiaries of Certain Canadian Registered
Retirement Plans) as I did for tax year 2004 instead of 3520? Do
I still file TD F 90-22.1 as it tells me on Schedule B of my tax
return? Last year, I thought Form 8891 took the place of TD F
90-22.1. Is it possible the IRS hasn't quite caught up with
itself, or am I just confused? Or both? I don't remember what
the very nice IRS person I spoke with last year told me - I do
remember he was impressed I was one of the first people to know I
was supposed to file anything at all!
I am a Canadian citizen (acutally dual so I can vote while I live
in this land of corporate greed and corrupt government - the
Liberals patronage scandal is a few minutes' pocket change for
the cronies here!). Anyway, I have RRSPs sitting in Canada that
I have dutifully been reporting since I first heard I needed to
from a friend who heard about it in your newsletter.
Thanks!
==================================
Hi David;
One question about the 8891 form. I elected Beneficiary status on
line 5 as per your email, but I wasn't sure which line to enter
the amount that the plan has appreciated for the year. Line 7a
says to enter Distributions received from the plan, include also
on line 16a on Form 1040, so I thought of putting it there, but
10e says other income, also enter on line 21 on Form 1040, and I
also thought that might be okay, so I'm confused.
Thanks
-----------------------------------------------------------
David - How do I report a RESP?
====================
david ingram replies:
I am combining two RRSP questions and an RESP question into one.I
f you have an RRSP, you should file the 8891 form and claim
yourself as a Beneficiary putting in the Dec 31, 2005 (or Dec
31st, 2004 for 2004) balance on line 8, The earnings or
undistributed earnings is another problem.
The 8891 form is to be found at:
http://www.irs.gov/pub/irs-pdf/f8891.pdf - Any US citizen or US
resident reading this with an RRSP in Canada should check out the
8891 - The official penalty for not filling in the form is 35%
of the amount in the RRSP plus 5% of the amount for each year the
RRSP is not reported. At this point, I have never seen the
penalty invoked.
Determining a profit and where it came from is a nightmare on the
form. What I have been doing is putting the PLUS or (usually)
minus amount on line 10 with an explanation beside it that
essentially says the following:
A combination of actual earnings from interest, dividends or
internal capital gains complicated by a change in exchange rates.
For 2004 I did NOT put the amount on Schedule B or on line 21 or
16a although 16a would allow it to be on the 1040 form without
its being taxable.
For 2005, I intend to use line 10 on the 8891 for the explanation
and put the amount on line 16a if a profit.
The form has not been well thought out. Those who were my
clients in the past will remember the rather attractive form I
devised myself which i thought was quite simple and reported the
figures in Canadian dollars with an exchange chart which
converted the figures to US dollars. I still understand it
better and we used the form from 1989 to 2003.
------------
The RESP is NOT covered by the 8891. I have it on good authority
that you should file the 3520 or 3520A. You can find the 3520
referred to in the last question at the bottom of schedule B of
your 1040.
======================
The T DF 90-22.1 form (referred to in the second last question on
the bottom of schedule B of your 1040) was NOT replaced by the
8891 -- The 8891 is filed with and is part of the 1040. The T
DF 90 form is NOT part of your 1040. They are sent to the
Department of the Treasury in Detroit and one must be filed for
every foreign (Canadian Egyptian, Iranian, Greek) account you
have when the total of all the accounts exceeds $10,000 US. The
form must be filed for all accounts that the individual has
"signing" authority over even if it is not your money or your
account. Therefore, you must report a joint account with your
mother or father, the union account you sign for, the PAC account
you have signing authority on, or (as in one case) all the
corporate accounts you sign for in your company,
An exception can be found in paragraph 20 on page 4 of the
instructions. If it turns out that you have signing authority
over more than 25 accounts, you just tell the Dept of Treasury
that fact and stop. If the Dept of the Treasury wants more
information, "they" will let you know.
The maximum penalty for not filing form T DF 90-22.1 is (drum
roll please) $500,000 PLUS FIVE years in Jail. Read all about it
at the bottom of the form which you can find at:
http://www.irs.gov/pub/irs-pdf/f9022-1.pdf
I have had two experiences with fines for not filing form TD F
90-22.1 - In one case a 105 year old lady received a $10,000 fine
for not reporting $38,000 in the Royal Bank of Canada in Edgemont
Village in North Vancouver.
In the other case, a 68 year lady received a $60,000 fine for
several hundred thousand dollars in Canadian RRSP accounts.
I also understand that some 1,000+ clients of Jerome Schneider
are about to be fined after not filing their T DF 90-22.1 forms
on his advice. Jerome also received a $100,000 fine and six
months in jail for giving the advice.
You can find out more about the whole Jerome Schneider fiasco at:
http://centapede.centa.com/Week-of-Mon-20050207/001614.html
Hope this all helps
david ingram
--------------------------------------------------
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa
Specialists
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Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US
This from "ask an income tax and immigration expert" from
www.centa.com or www.jurock.com or www.featureweb.com. David
Ingram deals on a daily basis with expatriate tax returns with:
multi jurisdictional cross and trans border expatriate problems
for the United States, Canada, Mexico, Great Britain, United
Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, 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, and any of the 43 states with state tax returns, etc.
Rockwall, Dallas, San Antonio Houston
Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and
Immigration Tips, Income Tax Immigration Wizard Antarctica
Rwanda Guru Consultant Specialist Section 216(4) 216(1) NR6 NR-6
NR 6 Non-Resident Real Estate tax specialist expert preparer
expatriate anti money laundering money seasoning FINTRAC E677
E667 105 106 TDF-90 Reporting $10,000 cross border transactions
Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US
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