"quiet disclosure" - what if I filed FBAR?

[nelsona]

Since you made the election in the past, all that is missing, for your RRSPs, is the yearly 8891 form. The election has already been made, so, unless you wiothdrew funds, there is no income to report. You are submitting 8891 to satisfy the yearly disclosure of the trust (instead of form 3520) which is allowed.

It does not satisfy FBAR or any other requirement however.

[rohitkn@gmail.com]

@nelsona:

Your point is subtle but finally understood. Thanks

One indeed can back file 8891 but MUST not choose to elect later (in a later year). So they have to pay taxes instead - provided there will be no penalties for under reported income

All taxable income from an RRSP (not elected to defer) seem to be from line 10a - 10e. It looks like that Contributions are NOT taxed.

What if someone took losses in a particular year?
What about contributions (line 9)? are they taxed?

Your response is appreciated.

[gpancio]

Let me take a step back.
Why not do an offshore voluntary disclosure?
In my case, I'm 99% sure I would qualify for the 5% penalty. I think that would be roughly $1500-2000. Plus owed taxes and interest, which are insignificant.

But then there are provisions listed in the faq about getting a decision and then opting out, if it benefits you. This would mean, just pat the owes tax, interest, and maybe a 20% fee (I can't remember what they called it)

That's the situation I would like to be in... pay my tax, interest, and if a bit more, I don't care.

Why would I not do this?

[rohitkn@gmail.com]

OVDP may be overkill in both our cases.

It probably likely requires a lawyer, too. Unless the process is straightforward and you can talk to someone who's been through it, or someone who can talk about it, it's a very risky option.

Penalties could add up over and over. If you feel you are safer doing that, take your chance. The 5% is your interpretation. Maybe you're better off calling their hotline and asking them what the best course is, first.

[rohitkn@gmail.com]

I called an expensive CPA today. And he said that in my case he can retroactively submit 8891 with 1040x and make the late deferred election.

It'll cost me a pretty penny but because I only missed it for 1 year, and I am a canadian citizen who's also been paying taxes in Canada, I can submit a reasonable cause letter which he'll prepare.

Does it sound like something credible? Or should I file back taxes for 8891 instead? OVDP doesn't seem all that great an option since I haven't done anything wrong.

[nelsona]

This is known as the "streamlined method" which is available to Cdns, but not to US residents.

[nelsona]

Of course this would have only cost you $2.00 in postage 3 years ago. See how creative CPAs cabn be when they smell a cash cow?

[Junoon123]

Interesting Nelson always a wealth of knowldge

[rohitkn@gmail.com]

Well I have decided to show 2012 RRSP losses on backfiled 8891s. I might change that. But I don't know yet.

I also don't know if I should file 8621 for mutual funds in one TFSA and one RRSP.

But with the losses in RRSPs and TFSA income and wife's interest income for 2012 all added in, I overreported my income. So no tax due. Hopefully that'll take care of things. I'll post updates.

[rohitkn@gmail.com]

I made a mistake in the above comment. You can't report RRSP losses especially even if you have not elected to defer. So that puts me in a bind.

[nelsona]

RRSP are specifically exempt from PFIC.

[gpancio]

rohitkn, did you end up talking to someone in Toronto?

what about your delinquent 3520s, 3520-A's? Do you know what to do about those?

[rohitkn@gmail.com]

@gpancio

I did talk to someone in Toronto. He'll write a letter in substitute for 3520-a.

Here's my situation.
I filed taxes in the US for 2012 on all US income. I was a US resident - married joint.

I filed taxes in Canada on worldwide income by Canadian tax code for 2012. I paid 7k in taxes to canada.

I did underreport income in the US (not counting RRSPs) by about $11500 but no tax due.

Since I was not hiding anything, any CPA I've spoken to says you file an amended tax return showing foreign tax credits and the IRS will not even bother with you.

For any missing forms - 8938, 3520, 3520-a (and 8621 if applicable), I've been told that all will be prepared except 3520-a (for which the CPA will write a letter). He will also make an 8891 late election. Says it's been working for him.

For 2013 I've filed an extension 4868. I am going to re calculate everything, and if I owe anything, pay it online before apr-15. Then file after my 1040X clears (..or not). Can't stay stressed out forever.

[rohitkn@gmail.com]

Even my RRSP gain in 2012 was $380 but the 7k I paid in Canada more than makes up for my $12,000 in under reported income.

I'll leave the US if it gets me in trouble. Talking to my employer about it. Not worth it. I can't believe other work permit holders and immigrants aren't in the same situation as me (and don't even know it).

[gpancio]

did you decide on having someone prepare the 3520's for you because they are crazy complicated?

I also under-reported (very little) income for years 2009-2012. The IRS told me to just amend the returns, so I will. The person I spoke to at IRS was pretty nice about it- he said with such little $ involved, it is not a big deal.

But the 3520s can be trouble, apparently. I've been looking at those forms and have no idea how to fill them out, even looking for advice on this forum. They aren't straight forward.
I am considering hiring help. One place seems to list fees in the $300-$400 range for each account. So that's nearly $1k per year for me.