Canadian Citizen with US Green Card Living in US -

Sent: Saturday, January 07, 2006 7:01 PM
To: taxman at
Subject: Canadian Citizen with US Green Card Living in US -
Question about CDN RRSP's and IRS filings
My question is: US Specific
Subject:  Canadian Bank/RSP Account Balances and IRS filing
I have a couple of questions, after reading one of your recent
email newsletters about Canadian Bank/RSP account balances.
About 5 years ago, I moved to US from Vancouver to work for a US
based company and obtained a US Greencard.  I have filed Form
1040 with the IRS for the last 5 years and declared myself
non-resident in Canada when I left.  At that time, I had (and
still do have) RSPs in Canada with balances over $20,000CDN.  I
do not receive any income distributions from the RSPs and have
not made any sales/purchases of investment within the RSPs.  What
is the reasoning/purpose for TDF90-22.1 and Form 8891?  I have
never filed either forms with my US income tax.  If I file these
forms, will the IRS tax me for holding RSPs in Canada?
Also, should I be filing a W-9 with the banks and brokerage firms
that hold my RSPs?  What is the purpose of a W-9?
david ingram replies:
At the moment, you are liable for fines of up to $500,000 plus
five years in jail for not filing the form(s) T D F 90-22.1.  The
record that I have seen is $10,000 for a 105 year old woman and
$60,000 plus 6 months for a 68 year old woman.  This is OLD
legislation and clearly referred to on the bottom of schedule B
of your 1040.
Failure to file form 8891 is only one year old.  However, BEFORE
form 8891, the penalty for failure to report the Canadian RRSP's
earnings to the IRS was (and still is) 35% of the amount plus 5%
for every year you fail to report.  TGhe truth is that I
personally have never seen this penalty applied.  However, it is
there as a parking meter type possibility.
The good news is that NO client of ours has ever been fined for
filing the T D F 90-22.1 forms late and obviously, no client has
ever been fined or penalized for bringing the RRSP info up to
The reporting reasons have always been to stop US citizens from
hiding money in offshore accounts.  In a recent case involving
Vancouver's own Jerome Schneider, over $1,000 US residents are
being fined for failure to file the TDF 90's after been turned
over to the IRS as part of Schneider's plea bargain.
 David Ingram expert income tax help and preparation of US Canada
Mexico non-resident and cross border returns with rental dividend
wages self-employed and royalty foreign tax credits
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa
US / Canada Real Estate Specialists
Home office at:
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Calls welcomed from 10 AM to 10 PM 7 days a week (please do not
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email to taxman at
Disclaimer:  This question has been answered without detailed
information or consultation and is to be regarded only as general
comment.   Nothing in this message is or should be construed as
advice in any particular circumstances. No contract exists
between the reader and the author and any and all non-contractual
duties are expressly denied. All readers should obtain formal
advice from a competent and appropriately qualified legal
practitioner or tax specialist for expert help, assistance,
preparation, or consultation  in connection with personal or
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