Renunciation

bruce · Post by **bruce** » Wed Nov 11, 2009 12:58 am

New guidance just issued by the IRS for expatriates/renunciants:

http://www.irs.gov/irb/2009-45_IRB/ar10.html

walter42 · Post by **walter42** » Wed Dec 16, 2009 6:13 pm

I am a dual US-Canadian citizen living in Canada. US tax filings are up to date. Have always claimed treaty protection for my RRSP tax deferral.

When and how would the US tax my RRSP if I renounce my US citizenship?

Thanks

nelsona · Post by **nelsona** » Thu Dec 17, 2009 6:29 am

I find the notion of a Cdn resident renouncing US citizenship so foolish, that I won't even entertain any questions on it. Free country right?

It's like the kid who gets beat up every day at school for his lunch money standing up and announcing that he is boycotting the cafeteria.

walter42 · Post by **walter42** » Thu Dec 17, 2009 9:55 am

[quote="nelsona"]I find the notion of a Cdn resident renouncing US citizenship so foolish, that I won't even entertain any questions on it. Free country right?

It's like the kid who gets beat up every day at school for his lunch money standing up and announcing that he is boycotting the cafeteria.[/quote]
Yawn. Does any informed person have a factual answer to my question or a link to a source that covers the matter in ordinary English rather than legalese?

nelsona · Post by **nelsona** » Thu Dec 17, 2009 10:32 am

Not here. Sorry you wasted your time joining this site.

Bye now.

JohnSt · Post by **JohnSt** » Fri Jan 08, 2010 12:40 pm

I'll offer a reply because I think it's a valid question. As far as I'm aware, there is no guidance on how RRSPs are treated at renunciation. However, the treaty allows you defer income until start to withdraw it. As such, at the moment someone expatriates, they are still in the "deferred" category.

If the IRS took an aggressive position, they could attempt to claim you owe back taxes on the otherwise deferred income (which is now, presumably, not deferred). However, I suspect they would need to pass some legislation to that effect, and they would also have to deal with the treaty. After all, at the moment someone renounces (assuming they met the threshold and filing conditions), they no longer have any obligations to the IRS for future events -- such as withdrawals from an RRSP. Just my interpretation...