I’m a US citizen living in Canada with an RRSP. I have filed all of my US 1040 tax returns, FBAR’s, 8891 forms, etc for all years up to 2011. I normally have no tax owing in the US. I would like to get caught up on my reporting requirements and need some advice on how to proceed.
I’ve done some research on the Streamlined Foreign Offshore Procedure and the changes to the 8891 filing requirements. Here is a summary of my research:
“Eligible individuals†are no longer required to file 8891 annually, but still have to file the FBAR and 8938 (if applicable). Form 3520 is still not required for RRSP’s. To be considered an “eligible individual†you have to satisfy “any “ requirement for filing a US Federal income tax return for “each†taxable year during which you were a US citizen or resident. So because I did not file a return for 2012, 2013 and 2014, it appears I’m not an “eligible individualâ€.
As a result, I must seek the consent of the IRS in order to elect deferral of the income generated by the RRSP. This basically involves paying a hefty fee of around $7K and satisfying a bunch of other requirements; which almost seem impossible to meet.
The steps to follow for the Streamlined Foreign Offshore Procedure seem reasonably clear on the IRS website. Essentially file the last 3 years of tax returns, 6 years of FBAR forms (submit them electronically), provide a written explanation of non-willful conduct on form 14653, write “streamlined Foreign Offshore†in red at the top of each return and form, and pay all tax and interest owing. A couple things are not clear to me.1) I assume you submit the FBAR’s electronically before you submit your returns? 2) How is the 8891 RRSP reporting handled?
As part of the streamlined procedure, it appears that I don’t have to worry about seeking consent from the IRS and paying the $7K, is that correct? Even if I’m not considered an “eligible individual†it appears that if I meet A) C) and D) of Rev. Proc 2014-55 (which I think I do), I can use the streamlined procedure for this as well. It looks like I can simply include a written declaration to request an extension and identify treaty provision XVIII(7) on the same form 14653 as I use for the other stuff. Is this correct?
Is there standard boiler plate language that I should use for any of this, or can I just summarize this in my own words? It also says that I need to include 8891 forms for each year. I think these forms were no longer required as of 2014. So do I just include an 8891 for 2012 and 2013 and nothing for 2014?
Anything else I’m missing? Any help with this would be greatly appreciated. I’ve been stressing about taking care of this for a few years.
Streamlined Foreign Offshore Procedure
Moderator: Mark T Serbinski CA CPA
There has been a lot written here on OVDI and streamline.
As to 8891, just before IRS issued 2014-55, they removed the right to back-file 8891 for the purpose of making the election.
You were still allowed to back-file 8891 simply to include the file. I would along simply back-file these, but only for 2012. The Rev proc removes the need to include this form for 2013 and later. On that form it will be clear that you ALREADY made the election.
Presumably, in these previous years of filing 8891, you had made the election , which was irrevocable, so I would not worry too much about now having to pay on RRSP internal income. You really only have FATCA and FBAR to worry about (and your returns of course).
Any particular reason you stopped filing so abruptly?
As to 8891, just before IRS issued 2014-55, they removed the right to back-file 8891 for the purpose of making the election.
You were still allowed to back-file 8891 simply to include the file. I would along simply back-file these, but only for 2012. The Rev proc removes the need to include this form for 2013 and later. On that form it will be clear that you ALREADY made the election.
Presumably, in these previous years of filing 8891, you had made the election , which was irrevocable, so I would not worry too much about now having to pay on RRSP internal income. You really only have FATCA and FBAR to worry about (and your returns of course).
Any particular reason you stopped filing so abruptly?
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Thanks so much Nelsona! I stopped filing because I had some major health problems. I'm finally feeling better and slowly stating to pick up the pieces to my life again.
Ok, so 1040 and FBAR's for all three years, complete and sign form 14653, and form 8891 only for 2012. Does this sound about right?
Anything specific I need to write on form 14653? Anything else I'm missing?
Ok, so 1040 and FBAR's for all three years, complete and sign form 14653, and form 8891 only for 2012. Does this sound about right?
Anything specific I need to write on form 14653? Anything else I'm missing?
Sounds fime to me. I assume you were under the FATCA limit all three years.
How about PFIC reporting, if you held Mutual funds or ETF outside an RRSP?
Did you have TFSA or an RESP?
How about PFIC reporting, if you held Mutual funds or ETF outside an RRSP?
Did you have TFSA or an RESP?
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best