tsanah:
Thanks your for sharing your story. I am in the same boat but you are way ahead of me.
Fortunately I don't have RRSP but I have three mutual funds in Canada. I was told by the mutual funds company that they had very little dividends in the past. So I think they don't account as income. However, if I am wrong, I hope someone will correct me.
the highest aggregate balance of the year
Moderator: Mark T Serbinski CA CPA
IRS has special rule on mutual fund -- as PFIC. It uses MTM calculation inside OVDI, and I don't know how it is treated outside.
My RRSP are all in mutual fund (TD Trust and Scotiabank). My non-RRSP was in mutual fund before 2005 but later all became GIC.
It is an indeed complicated problem for us -- and I wish I had never owned the money considering the penalty (either inside OVDI or later found by IRS on FBAR penalty).
For me, OVDI is an easy but expansive exit to this mess -- given the current IRS focus on offshore assets..
I hope the best (IRS will not include RRSP) and it will be 12.5% penalty --otherwise, the worst will be 25% penalty and it will hit me really hard for what my income level.
For my non-RRSP,
I have paid IRS income tax on these accounts once banks stopped withholding tax. Before that I only paid CRA tax through withholding..
My RRSP are all in mutual fund (TD Trust and Scotiabank). My non-RRSP was in mutual fund before 2005 but later all became GIC.
It is an indeed complicated problem for us -- and I wish I had never owned the money considering the penalty (either inside OVDI or later found by IRS on FBAR penalty).
For me, OVDI is an easy but expansive exit to this mess -- given the current IRS focus on offshore assets..
I hope the best (IRS will not include RRSP) and it will be 12.5% penalty --otherwise, the worst will be 25% penalty and it will hit me really hard for what my income level.
For my non-RRSP,
I have paid IRS income tax on these accounts once banks stopped withholding tax. Before that I only paid CRA tax through withholding..
tsanaha:
Thanks agains for your story.
This is becoming even more scary as I didn't know foreign mutula funds have to be reported as PFIC. The mutual fund company is also unaware of this and did not bother to send me any information. Now I have to ask about the yearly returns of these funds since 2003.
Thanks agains for your story.
This is becoming even more scary as I didn't know foreign mutula funds have to be reported as PFIC. The mutual fund company is also unaware of this and did not bother to send me any information. Now I have to ask about the yearly returns of these funds since 2003.
Canadians working in US are not the only ones in this boat. Indians are discussing FBAR too
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http://www.r2iclubforums.com/forums/sho ... ends/page1
Nstudent,
Residents are reqired to report global income by most countries (not only USA), however FBAR penalty seems very high and the reporting limit is very low (10K in US while 100K in Canada).
The OVDI's policy seems very unfair to most immigrants who happend to have some money left home (for whatever reason), not really as what IRS describe "hiding money offshore for tax evasion". IRS does not give any special consideration to immigrants inside OVDI.
If we decide to live this country, we have to get over with this FBAR problem (either doing OVDI or quiet disclosure) and it seems to me that if the violation is only a few years (say less than 3 years), quiet disclosure may be a good choice. It will be a stupid move for IRS to prosecute anyone who tries to correct mistake.
In your case, it should not be too difficult to do PFIC. All you need is your mutual fund Qt statements -- and you need to report two kind income, instead of doing capital gain, you need to calculate MTM gain (on yearly base).
Residents are reqired to report global income by most countries (not only USA), however FBAR penalty seems very high and the reporting limit is very low (10K in US while 100K in Canada).
The OVDI's policy seems very unfair to most immigrants who happend to have some money left home (for whatever reason), not really as what IRS describe "hiding money offshore for tax evasion". IRS does not give any special consideration to immigrants inside OVDI.
If we decide to live this country, we have to get over with this FBAR problem (either doing OVDI or quiet disclosure) and it seems to me that if the violation is only a few years (say less than 3 years), quiet disclosure may be a good choice. It will be a stupid move for IRS to prosecute anyone who tries to correct mistake.
In your case, it should not be too difficult to do PFIC. All you need is your mutual fund Qt statements -- and you need to report two kind income, instead of doing capital gain, you need to calculate MTM gain (on yearly base).
tsanaha:
I agree with that FBAR is a one-size-for-all approach.
Yesterday I attended a seminar by a lawyer from New York. He said IRS is now after small fishes too. His father, a taxi driver in NY city and made about $50K/year, was audited recently and asked to produce all receipts for expense. When he failed, IRS tried to give him a huge penalty. Fortunately his son helped him to settle the case and paid only $6k.
I agree with that FBAR is a one-size-for-all approach.
Yesterday I attended a seminar by a lawyer from New York. He said IRS is now after small fishes too. His father, a taxi driver in NY city and made about $50K/year, was audited recently and asked to produce all receipts for expense. When he failed, IRS tried to give him a huge penalty. Fortunately his son helped him to settle the case and paid only $6k.
Nstudent,
This laywer might be just doing marketing for himself. If it is small amount money (just a bit over 10K) and it is only short time (less than 3 years), i think quiet disclosure should be fine.
It is not cost effecitve for IRS going after real small fishies -- in court. And so far, all have been prosecuted/convicted are over 750K and all most of them using foreign entity (indicating willfulness and covering up).
Certainly, it will bring in peace in mind simply paying the penalty and moving on.
This laywer might be just doing marketing for himself. If it is small amount money (just a bit over 10K) and it is only short time (less than 3 years), i think quiet disclosure should be fine.
It is not cost effecitve for IRS going after real small fishies -- in court. And so far, all have been prosecuted/convicted are over 750K and all most of them using foreign entity (indicating willfulness and covering up).
Certainly, it will bring in peace in mind simply paying the penalty and moving on.
tsanaha:
The lawyer was certainly trying to marketing himself.
Could I ask you something? How did you get all the records from TD for the last seven years? I have a GIC/term deposit account with TD Canada Trust and the only records I can get is for the years 2005 -2010. Did you call the branch or did you go the branch in person?
The lawyer was certainly trying to marketing himself.
Could I ask you something? How did you get all the records from TD for the last seven years? I have a GIC/term deposit account with TD Canada Trust and the only records I can get is for the years 2005 -2010. Did you call the branch or did you go the branch in person?
In OVDI 2011, we can not use wide range (estimate value) for FBAR, because the penalty will be based on highest aggregated value of each account from 2003 to 2010.
IRS knows some taxpayers may not be able to keep records back to 6-8 years ago and is willing to help taxpayers to contact offshore banks. The hotline folks also say "just get as much as you can -- better with proof from bank with fact of missing early years records".
Nstudent, you may have to pay TD for this records (I paid $60)...
IRS knows some taxpayers may not be able to keep records back to 6-8 years ago and is willing to help taxpayers to contact offshore banks. The hotline folks also say "just get as much as you can -- better with proof from bank with fact of missing early years records".
Nstudent, you may have to pay TD for this records (I paid $60)...
People make mistakes, even Tim Geithenr, Tom Daschel just name a few --- do they know better what is income ?
Some choose to do it quiet (hope IRS will not see the mistakes), some choose to do it noisy -- so it can clean up mess and sleep well. It is not without decency for either one -- just a matter of choice.
People who lose money at least can afford losing money -- and losing it to a country in deep trouble that we have newly adpoted is not that bad at all...
Some choose to do it quiet (hope IRS will not see the mistakes), some choose to do it noisy -- so it can clean up mess and sleep well. It is not without decency for either one -- just a matter of choice.
People who lose money at least can afford losing money -- and losing it to a country in deep trouble that we have newly adpoted is not that bad at all...