I guess the IRS person is not clear here. He/she may have assumed you already made an election for deferal.
Even if you did, every year you still need to file 8891 only can skip item 10
RRSP with ovdi 2011
Moderator: Mark T Serbinski CA CPA
From the instrunction of form 8891:
[b]Form 8891 also can be used to make an election pursuant
to Article XVIII(7) of the U.S.-Canada income tax treaty to
defer U.S. income tax on income earned by an RRSP or an
RRIF that has been accrued, but not distributed. Taxpayers
who have not previously made the election can make it on
this form by checking the box on line 6c.[/b]
My understanding is RRSP has accrued income but it is not distribution if you do not take money out of RRSP.
It also says "[b]For purposes of this form, an annuitant of an
RRSP or RRIF is an individual who is designated pursuant to
the RRSP or RRIF as an annuitant and is not also a
beneficiary as defined above[/b]".
It looks like if we check annuitant, we can not choose to defer the undistributed earnings/gain. maybe the IRS staff means the earning is automatically defered for annuitant? But as beneficiary, one has to fill in the form to defer tax?
[b]Form 8891 also can be used to make an election pursuant
to Article XVIII(7) of the U.S.-Canada income tax treaty to
defer U.S. income tax on income earned by an RRSP or an
RRIF that has been accrued, but not distributed. Taxpayers
who have not previously made the election can make it on
this form by checking the box on line 6c.[/b]
My understanding is RRSP has accrued income but it is not distribution if you do not take money out of RRSP.
It also says "[b]For purposes of this form, an annuitant of an
RRSP or RRIF is an individual who is designated pursuant to
the RRSP or RRIF as an annuitant and is not also a
beneficiary as defined above[/b]".
It looks like if we check annuitant, we can not choose to defer the undistributed earnings/gain. maybe the IRS staff means the earning is automatically defered for annuitant? But as beneficiary, one has to fill in the form to defer tax?
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tsanah
I think the assumption is an election has been made --then earning (not cashing out) can be tax defered. That is all about our topic that how to back file to make such an election.
Another story to share. In order to prove that I have never cashed out money from RRSP, I can show my RRSP quarterly statement. But the bank (TD bank for example) only keeps up to 7 years record. I have lost all my statements (due to frequent moving), and paid $60 to get last 7 years statement. How can I prove to IRS that RRSP has never been cashed out ? For this, I talk to CRA and learned that CRA will notify any cash out event of RRSP for a US resident. But it will take about 3-4 years to get there (what a joke !). So, just in case you are in such a situation with IRS (in OVDI, the burden of proof is on taxpayer, it is not in courts). So you can present last 7 years statements ---then ask IRS to get the notice from their files as CRA should have sent them.
Another story to share. In order to prove that I have never cashed out money from RRSP, I can show my RRSP quarterly statement. But the bank (TD bank for example) only keeps up to 7 years record. I have lost all my statements (due to frequent moving), and paid $60 to get last 7 years statement. How can I prove to IRS that RRSP has never been cashed out ? For this, I talk to CRA and learned that CRA will notify any cash out event of RRSP for a US resident. But it will take about 3-4 years to get there (what a joke !). So, just in case you are in such a situation with IRS (in OVDI, the burden of proof is on taxpayer, it is not in courts). So you can present last 7 years statements ---then ask IRS to get the notice from their files as CRA should have sent them.
sorry I did not write down the ID#. But the IRS person who answered my phone call sounds very knowledgeable and knew 8891 very well. I was finally transferred to her as nobody knew much about 8891. I know a couple of people who recently called IRS about 8891 and got same answers as I got. Maybe you can call IRS to confirm.
http://www.hrinfodesk.com/Articles/fina ... rifwww.htm
IRS is not one person as I said before. Need to make election. Don't be hurt by stupid IRS guys. Write down the name and ID# to protect yourself.
Anyway, I still believe Nelsona's previous position is correct.
IRS is not one person as I said before. Need to make election. Don't be hurt by stupid IRS guys. Write down the name and ID# to protect yourself.
Anyway, I still believe Nelsona's previous position is correct.
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tsanah
You should ask your bank to get your RRSP statement. TD only keeps up to 7 years but Scotiabank keeps much longer. It may cost some money... you should keep them anyway. I was stupid to throw them away when moving and now paid $60 just for 40 pages.
If the bank does not have the early years bank record, your only hope is CRA, they keep recording on T4RSP (when you take out money from RRSP, bank will withhold and 25% ? and send a T4RSP to CRA. So if you have even taken mony our from RRSP, there is a record -- this is for long time.
Now the problem is if you have never taken out money from the plan, there is no record, and the CRA person whom I talked with told me that "We do not write a letter or statement on your record of T4RSP, we can tell you there is none. It is not our job to verify your record to third party" Then I told her that I will look at the laws and to see if I can ask court to enforce this information disclosure. She told me that every time they have T4RSP they will notify IRS. So I think it is better to keep recent years (say 3-4) and ask IRS to check their own files... if there none, that is none.
If the bank does not have the early years bank record, your only hope is CRA, they keep recording on T4RSP (when you take out money from RRSP, bank will withhold and 25% ? and send a T4RSP to CRA. So if you have even taken mony our from RRSP, there is a record -- this is for long time.
Now the problem is if you have never taken out money from the plan, there is no record, and the CRA person whom I talked with told me that "We do not write a letter or statement on your record of T4RSP, we can tell you there is none. It is not our job to verify your record to third party" Then I told her that I will look at the laws and to see if I can ask court to enforce this information disclosure. She told me that every time they have T4RSP they will notify IRS. So I think it is better to keep recent years (say 3-4) and ask IRS to check their own files... if there none, that is none.
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tsanah
[quote="ikeaidea"]No need to prove.
If IRS really don't clear 8891 and tdf for RRSP, it is good for us. File the previous TDF normal way as I said before. Most possible that no one will care of you.
Good Luck to every RRSP owner![/quote]
Thanks for this link, it proves that we are not stupid to skip an election rather it is the form confuses us -:).
that will make back filing so much easier
If IRS really don't clear 8891 and tdf for RRSP, it is good for us. File the previous TDF normal way as I said before. Most possible that no one will care of you.
Good Luck to every RRSP owner![/quote]
Thanks for this link, it proves that we are not stupid to skip an election rather it is the form confuses us -:).
that will make back filing so much easier
Dual citizen living in Canada. I emailed FBAR & they responded that RRSPs are reportable. I have reported some RRSPs too in the past, but not 2 that are spousal RRSPs. Do I need to report amended FBARs for 6 years or is it sufficient to add now. Same for 8891s. Or can I just add them this year.
May end up needing ovd (but hope not) because have long owned Cdn mutual funds. This is all getting insane. I do not see why after 40 years in Canada I have to do so. It makes me a second class citizen. What good does it do for the US govt. to know about all my bank accounts for example if they don't have similar information for all the other Canadians not so burdened.
May end up needing ovd (but hope not) because have long owned Cdn mutual funds. This is all getting insane. I do not see why after 40 years in Canada I have to do so. It makes me a second class citizen. What good does it do for the US govt. to know about all my bank accounts for example if they don't have similar information for all the other Canadians not so burdened.