n-03-75.pdf

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Part III - Administrative, Procedural, and Miscellaneous

RRSP and RRIF Information Reporting

Notice 2003-75

SECTION 1. BACKGROUND.

Notice 2003-25, 2003-18 I.R.B. 855, and Notice 2003-57, 2003-34 I.R.B. 397,
provided guidance to taxpayers regarding their 2002 taxable year information reporting
obligations with respect to Canadian registered retirement savings plans (“RRSPs”) and
registered retirement income funds (“RRIFs”). These Notices stated that Treasury and
the IRS intended to develop an alternative, simplified reporting regime for these
Canadian retirement plans for future taxable years.

This notice describes the new simplified reporting regime that Treasury and the
IRS have developed for taxpayers who hold interests in RRSPs and RRIFs. The new
reporting regime, which is effective for taxable years beginning after December 31,
2002, is in lieu of the filing obligations under section 6048 (Form 3520 (Annual Return to
Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts) and Form
3520-A (Annual Information Return of Foreign Trust with a U.S. Owner)) that otherwise
apply to U.S. citizens and resident aliens who hold interests in RRSPs and RRIFs and
to the custodians of such plans. The new simplified reporting regime is designed to
permit taxpayers to meet their reporting obligations by using information that is readily
available to them.

SECTION 2. NEW REPORTING REGIME.

.01. New Form
. Under the authority of section 6001 of the Internal Revenue
Code, Treasury and the IRS are designing a new form that a U.S. citizen or resident
alien who holds an interest in an RRSP or RRIF must complete and attach to his or her
Form 1040. The new form also will coordinate the reporting rules with the procedure set
forth in section 4 of Revenue Procedure 2002-23, 2002-1 C.B. 744, for making the
election under Article XVIII(7) of the U.S.-Canada income tax convention to defer U.S.
income taxation of income accrued in the RRSP or RRIF.

.02. Interim Reporting Rules for Beneficiaries Making the Election to Defer U.S.
Income Taxation on Income of an RRSP or RRIF. Until the form referred to in section
2.01 of this notice is available, any U.S. citizen or resident alien who is a beneficiary (as
defined in section 2.06 of this notice) of an RRSP or RRIF and who has made the
election described in section 4 of Revenue Procedure 2002-23 with respect to the
RRSP or RRIF, or who is making such election effective for the 2003 taxable year and
subsequent taxable years, must

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(i) attach a copy of each such election to his or her Form 1040;
(ii) indicate the balance in each RRSP or RRIF at the end of the taxable year
either on the copy of the election or by attaching a copy of a statement
issued by the custodian of the RRSP or RRIF; and
(iii) comply with section 2.05 of this notice if he or she has received any
distributions during the taxable year from such RRSP or RRIF.

.03. Interim Reporting Rules for Beneficiaries Not Making the Election to Defer
U.S. Income Taxation on Income of an RRSP or RRIF. Until the form referred to in
section 2.01 of this notice is available, any U.S. citizen or resident alien who is a
beneficiary (as defined in section 2.06 of this notice) of an RRSP or RRIF and who has
not made the election described in section 4 of Revenue Procedure 2002-23 with
respect to the RRSP or RRIF, and who is not making such election for the 2003 taxable
year, must attach a statement to his or her Form 1040 that includes the following
information:
(i) The caption “CANADIAN RRSP” or “CANADIAN RRIF,” whichever is
applicable;
(ii) The taxpayer’s name and taxpayer identification number;
(iii) The taxpayer’s address;
(iv) The name and address of the custodian of the RRSP or RRIF and the
plan account number, if any;
(v) The amount of contributions to the RRSP or RRIF during the taxable year;
(vi) The undistributed earnings of the RRSP or RRIF during the taxable year in
each of the following categories: interest, dividends, capital gains, and
other;
(vii) The total amount of distributions received from the RRSP or RRIF during
the taxable year; and
(viii) The balance in the RRSP or RRIF at the end of the taxable year.
The taxpayer must provide a separate statement for each RRSP or RRIF of which he or
she is a beneficiary. In addition to attaching the statement described in this section 2.03
to his or her Form 1040, the taxpayer must report the undistributed earnings for that
taxable year of all such RRSPs and RRIFs on Schedule B (Interest and Ordinary
Dividends) or D (Capital Gains and Losses), as appropriate, and on line 8a, 9, 13, or 21
of the Form 1040. The taxpayer must also comply with section 2.05 of this notice if the
taxpayer has received any distributions during the taxable year from such RRSP or
RRIF.

.04. Interim Reporting Rules for Annuitants of RRSPs and RRIFs
. Until the form
referred to in section 2.01 of this notice is available, if a U.S. citizen or resident alien is
an annuitant (as defined in section 2.06 of this notice) under an RRSP or RRIF that has
no beneficiary (as defined in section 2.06 of this notice), and the annuitant receives a
distribution from the RRSP or RRIF, the annuitant must in the year of distribution attach
a statement to his or her Form 1040 that includes the following information:
(i) The caption “ANNUITANT UNDER CANADIAN RRSP’ or “ANNUITANT
UNDER CANADIAN RRIF,” whichever is applicable;

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(ii) The annuitant’s name and taxpayer identification number;
(iii) The annuitant’s address;
(iv) The name and address of the custodian of the RRSP or RRIF and the
plan account number, if any;
(v) The total amount of distributions received from the RRSP or RRIF during
the taxable year; and
(vi) The balance in the RRSP or RRIF at the end of the taxable year.
The annuitant must provide a separate statement for each such RRSP or RRIF from
which he or she has received a distribution during the taxable year. The annuitant must
comply with section 2.05 of this notice with respect to such distributions.

.05. Distributions
. A U.S. citizen or resident alien who has received any
distributions during the taxable year from an RRSP or RRIF must report the total
amount of distributions received during the taxable year from all such RRSPs and
RRIFs on line 16a of the Form 1040 and the taxable amount of all such distributions (as
determined under section 72) on line 16b of the Form 1040.

.06. Definition of Beneficiary and Annuitant
. For purposes of the new simplified
reporting regime described in this notice, a beneficiary of an RRSP or RRIF is an
individual who is subject to current U.S. income taxation on income accrued in the
RRSP or RRIF or would be subject to such taxation had the individual not made the
election under Article XVIII(7) of the U.S.-Canada income tax convention to defer U.S.
income taxation of income accrued in the RRSP or RRIF. For these purposes, an
annuitant of an RRSP or RRIF is an individual who is designated pursuant to the RRSP
or RRIF as an annuitant.

.07. Record Retention
. Taxpayers must retain supporting documentation
relating to information required by the new reporting regime, including Canadian Forms
T4RSP, T4RIF, or NR4, and periodic or annual statements issued by the custodian of
the RRSP or RRIF.

SECTION 3. SECTIONS 6048 AND 6677 ARE NOT APPLICABLE

The new simplified reporting regime, instituted under the authority of section
6001, provides the information needed for tax compliance purposes. Therefore,
pursuant to section 6048(d)(4), no reporting will be required under section 6048 with
respect to RRSPs and RRIFs that have beneficiaries or annuitants who are subject to
the new simplified reporting regime. Accordingly, the associated penalties described in
section 6677 do not apply to such RRSPs and RRIFs and their beneficiaries or
annuitants. A beneficiary or annuitant of an RRSP or RRIF may, however, be subject to
other penalties.

SECTION 4. EFFECT ON OTHER DOCUMENTS.

Notice 2003-25, Notice 2003-57, and section II.E of Notice 97-34 (pertaining to

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reporting for certain transfers to RRSPs), 1997-1 C.B. 422, are superseded to the extent
inconsistent with this notice.

SECTION 5. EFFECTIVE DATE.

This notice is effective for taxable years beginning after December 31, 2002.

SECTION 6. PAPERWORK REDUCTION ACT.

The collection of information contained in this notice has been reviewed and
approved by the Office of Management and Budget in accordance with the Paperwork
Reduction Act (44 U.S.C. 3507) under control number 1545-1865.

An agency may not conduct or sponsor, and a person is not required to respond
to, a collection of information unless the collection of information displays a valid OMB
control number.

The collection of information in this notice is in section 2. This information will be
used to compute and collect the right amount of tax. The likely respondents are
individuals.
The estimated total annual reporting burden under the new simplified reporting
regime for taxpayers who hold interests in RRSPs and RRIFs is 1,500,000 hours. The
estimated annual burden per respondent varies from 0.5 hour to 5 hours, depending on
individual circumstances, with an estimated average of 2 hours. The estimated number
of respondents is 750,000.

The estimated annual frequency of responses is once per respondent per plan.

The new simplified reporting regime substantially reduces the reporting burden of
taxpayers who hold interests in RRSPs and RRIFs. Under the prior regime, the
average estimated reporting burden was more than 50 hours per Form 3520 (more than
100 hours per respondent). In addition, the new simplified reporting regime eliminates
the requirement to file Form 3520-A, reducing the burden of a custodian by more than
40 hours per RRSP or RRIF.

Books or records relating to a collection of information must be retained as long
as their contents may become material in the administration of any internal revenue law.
Generally, tax returns and tax return information are confidential, as required by 26
U.S.C. 6103.

SECTION 7. DRAFTING INFORMATION.

The principal author of this notice is Willard W. Yates of the Office of Associate
Chief Counsel (International). For further information regarding this notice
contact Willard W. Yates on (202) 622-3880 (not a toll-free call).