On Jan. 7, 2016, the IRS added new frequently asked questions (FAQs) to its website on the streamlined offshore compliance program, which includes guidance to participants in Canadian registered retirement savings plans (RRSP), registered retirement income fund (RRIF) or other similar Canadian retirement plans. Generally, an individual who is a citizen or resident of the US and a beneficiary of a Canadian retirement plan may be subject to US tax on accrued income in the plan even though the income is not currently distributed to the beneficiary. However, under Article XVIII (7) of the US-Canada income tax treaty, an individual may elect to defer taxation until the funds are distributed from the plan. Even though the earnings are not reportable until the funds are distributed from the plan, the beneficiary of the plan may still be required to file a FinCEN 114, Report of Foreign Bank and Financial Accounts (FBAR) or a Form 8938, Statement of Specified Foreign Financial Assets.
The FAQs address situations under the Streamlined Domestic Offshore Procedures (SDOP) in which individuals have not reported their Canadian retirement funds on a FBAR or Form 8938 under the following situations:
The updated FAQs act as a good reminder that if you are a beneficiary of an RRSP, RRIF or a similar Canadian retirement plan, there are potential FBAR or Form 8938 filings that may be required. Penalties for not filing the required forms can be severe, starting at $10,000 per occurrence of non-filing.
You're Invited! Not-For-Profit CFOShare
Tuesday December 10, 2019
4:00 PM - 6:00 PM
You're Invited! Annual Accounting & Business Conference
Wednesday December 4 2019
Hosted at the MSU Management Education Center in Troy, MI
You're Invited! Construction Update
Thursday November 21, 2019
Detriot Athletic Club
241 Madison Avenue
Detriot, MI 48226