Never files 8891, but no income, dividend or distribution

[Quebecer]

I moved here in 2000 and just recently was made aware of 8891. I have a single RRSP which is composed of a single mutual fund. Since I moved here, it hasn't generated any capital gain, income or dividend. I have not taken any distribution or made contributions (I was told I couldn't while living in the USA without giving power of attorney to a Canadian resident).

Therefore, technically, my missing 8891's would be mostly blank. They wouldn't have generated any taxes either.

How should I rectify the situation? Just file 8891 this year, and make the election to differ US taxes now? Note that I have filed for an extension for 2012, since I realized I didn't know what to do with the missing 8891.

Thanks in advance! :)

Christian

[Taxpoor]

The fact that your RRSP has not generated any income, or contains one or mulitple mutual funds is a mute point, the fact that you have an RRSP is the issue and one must file an 8891 every year to identify the account and to either elect deferral of income or identify the distributions.

Having said this, it appears you have not filed an 8891 in all of your tax filings....

I am sure others will chime in here...but from my standpoint you might have to amend your past returns and include (with permission) the outstanding 8891's, then file a normal return for 2012 with the 8891 inclusion.

Although a very simple form to fill out...(if one is electing to defer), I don't believe the IRS is accepting back filed 8891's without a private letter ruling.

[Quebecer]

I just talked to the IRS. They only asked if I had taken any distributions. Since I hadn't, the nice lady told me to just start filing form 8891 this year (and make the election to defer taxes this year). Since I didn't owe any taxes on this RRSP, she said the IRS will contact me if they want more historical details. But, she didn't seem to think it was likely. The IRS is losing staff because of the budget sequestration after all.

I also just recently learned about FBAR. I called the FBAR Hotline (866-270-0733). Another nice lady told me: "Use the latest FBAR form (TD F 90-22.1) and just provide the RRSP details for the last 6 years. Include a letter explaining why this is only happening now. And you should be all set."

This is quite easy after all. I had contacted several lawyers who were ready to charge me thousands of $$ just for a consultation... Just to show that talking to the IRS is not such a bad thing. :)

[Taxpoor]

Good news Quebecer.

When I started this process a couple of years ago, there was a lot of fear and it was mostly fuelled by Accountant firms.

I don't think the IRS is the bear everyone makes them out to be.

[nelsona]

Indeed, the fear-mongering by desperate CPA's who have seen their cash cow of simple tax retunrs disapear to cheap software, was disgusting!!

I would never deal with any of these firms that suddenly becaame cross-border experts.