Note: “ij” is a regular on Townsend’s blog. He is, from what I gathered, originally from China (I think), spent some time in Canada, when he opened up an RRSP account, and then moved to the United States. He entered the 2009 OVDP and has been very worried that an RRSP in Canada would be hit with a 20% fine. To this day, the IRS has not given guidance on RRSPs. If IJ is correct, and RRSPs will not be subject to OVDP fines, this sets a kind of precedent for all registered retirement accounts in the world, or so it could be argued, under the Equal Protection Clause.
From Just Me:
Just saw this here, and thought some Canadians might be interested. Can’t vouch for it….
ijJan 11, 2012 08:29 AM
Just an update,
IRS is not going to impose penalty on RRSP. So the past rumor about penalty on RRSP is unfounded.
Great move on IRS, it is more reasonable than most of us have expected. However, I do hope they will treat other countries retirement plans with same kindness.
Just MeJan 11, 2012 10:53 AM
ij…. Regarding the RRSP…. That would be good news for Canadians. Do you have a reference that one could refer to, or is this just what your Examiner said…
ijJan 11, 2012 11:09 AM
I was told by my examiner this morning. Of course, each one has its own unique case. My RRSP has never been cashed out and has never been moved since becoming a US person. So there is no tax implication except missing the deferral election.
I would not be surprised penalty would be imposed to some RRSP owners (US residents) have cashed out RRSP but never reported as income in US return.
That is why IRS has never publicly stated what is the rule on RRSP inside OVDI, and even some OVDI hotliners have said that penalty would be imposed on RRSP.
ijJan 11, 2012 11:12 AM
This is a reference (sort of)