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April 29, 2012 - Phil Hodgen

How the IRS can make RRSP cleanups painless

I get two or three calls a week from Canadians living in the United States who learn — to their horror — that U.S. tax paperwork should have been filed for their RRSPs. At the moment, the only official solution is an expensive one: ask the IRS to issue a private letter ruling to allow you to file late Form 8891s to fix the problem.

There is a short-term and a long-term solution. I’m working on both.

Short-term solution

The short-term solution is that I will do a workshop in July. Ten people maximum. You will do your own private letter ruling.... continue reading

April 13, 2012 - Phil Hodgen

RRSP solution I am presenting to the IRS

I am making the trip in early May (06-09 May, 2012, to be precise) to Washington DC with the State Bar of California’s annual Tax Section pilgrimage to the IRS, Treasury Department, and Congress.  

Every year the Tax Section presents papers on various topics of tax law.  Basically, we’re saying “There oughta be a law” or “There shouldn’t oughta be a law” to the appropriate Federal body in order to solve persistent problems in tax law or tax procedure that we see in our day-to-day work.

RRSPs need fixing

This year, I have co-authored a paper with Steven Walker about RRSPs.  ... continue reading

October 9, 2011 - Phil Hodgen

Upton Sinclair comments on the IRS

It’s difficult to make a man understand something when his salary depends on him not understanding it.

Upton Sinclair in I, Candidate for Governor: And How I Got Licked (1935), ISBN 0-520-08198-6; repr. University of California Press, 1994, p. 109.

No, he wasn’t really talking about the IRS. But he could have been. If you screw up filing a piece of paper and the IRS has the power to fine you $10,000, it is exceedingly difficult for everyone in the IRS — from the Commissioner on down — to understand why this is a bad idea.

If you are an Accidental American who has lived most of your life in Canada and you don’t file a piece of paper with the U.S.... continue reading

Expatriation RRSPs Voluntary Disclosure
September 26, 2011 - Phil Hodgen

Has the IRS crossed the RRSP Rubicon?

Regular readers of this blog know that I talk frequently about RRSPs.  (For those of you who don’t know, RRSPs are Canadian “do-it-yourself” pension plan arrangements, like an Individual Retirement Account (“IRA”) in the United States.)  A whole bunch of OVDI participants are about to go down the rabbit hole to Alice-in-Wonderland tax logic, as the Commissioner tries to decide what to do with RRSPs.

Here is the problem in a nutshell.

  1. RRSPs are “foreign financial accounts” for purposes of the FBAR filing requirement (Form TD F 90-22.1).  No question about it.
  2. RRSPs are pension arrangements.  It is IMPOSSIBLE to do any skanky tax evasion games with an RRSP–in Canada or the United States.
... continue reading
RRSPs Voluntary Disclosure
September 23, 2011 - Phil Hodgen

Questions I answered for a reporter about RRSPs and OVDI

I got an email from a reporter, asking some questions about the OVDI and RRSPs.  Here is my email back to her.  I will be talking to her on the phone as well.


I am working on another OVDI article. This story is about foreign retirement plans, RRSPs in particular. I know that you have written about this topic on your blog, and I am hoping that you might have some insight into how these plans are likely to be treated within the context of the OVDI. Have you had any discussions with agents or the OVDI hotline regarding the treatment of RRSPs?

... continue reading
RRSPs Voluntary Disclosure