AICPA Comments on Form 3520-A, "Annual Information Return of Foreign Trust with a U.S. Owner"  

    Published June 24, 2005

    At the urging of the AICPA and other groups, the IRS issued Notice 2003-75, which created a simplified reporting regime for U.S. citizens and resident aliens holding interests in Canadian registered retirement savings plans (RRSPs) and registered retirement income funds (RRIFs), and the custodians of these accounts. [ See AICPA's June 2003 comments.] According to our Form 3520 Task Force, these new rules represent a significant improvement over the prior rules. Effective for 2003, the new reporting regime allows individuals to meet reporting requirements by relying on information already available.

    Until a new 1040-related form is created for the holders of RRSP and RRIF interests, beneficiaries who elect to defer U.S. income taxation under Rev. Proc. 2002-23, 2002-1 C.B. 744, must (1) attach a copy of that election to their returns; (2) indicate the year-end plan balance; and (3) report any plan distributions. Beneficiaries not making the election to defer RRSP/RRIF income and RRSP/RRIF annuitants must report (1) the name and address of the custodian and account number of each RRSP/RRIF; (2) any contributions made during the year; and (3) the year end balance of the plans plus total distributed and undistributed income earned during the year. 

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