PLR 200751012: U.S. citizen gets more time for Canadian retirement plan elections

Plain-English summary

A U.S. citizen held two Canadian Registered Retirement Savings Plans but did not know he needed to elect to defer U.S. tax on income accruing in them and file Form 8891 for each plan. He said the IRS had not contacted him about the plans. The IRS found that he met the standards for late election relief and gave him 60 days from the ruling letter to make the elections and file the forms for the specified tax years. He must continue filing a Form 8891 for each elected plan through its final distribution. The ruling does not decide whether he otherwise qualifies for the elections.

Ruling snapshot

• Question: May the taxpayer elect deferral and file the Canadian retirement plan forms after the deadline?
• Outcome: Approved; 60 days from the ruling letter to elect and file Forms 8891.
• Key authorities: Rev. Proc. 2002-23; Treas. Reg. §§ 301.9100-1 and 301.9100-3.

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 200751012
Third Party Communication: None
Release Date: 12/21/2007
Date of Communication: Not Applicable
Index Number: 9100.22-00, 9114.03-06
Person To Contact:
----------------------
----------------------, ID No. -------------
------------------------
Telephone Number:
------------------------------
---------------------
Refer Reply To:
CC:INTL
PLR-132478-07
Date:
September 19, 2007

A = ----------------------
------------------------

Tax Years = ---------------

Year 1 = -------

Dear ---------------:

This is in reply to a letter dated July 12, 2007, requesting an extension of time under Treas. Reg. § 301.9100-3 for A to elect the provisions of Rev. Proc. 2002-23, 2002-1 C.B. 744, and file Forms 88911 for Tax Years. The information submitted for consideration is substantially as set forth below.

The ruling contained in this letter is predicated upon facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. This office has not verified any of the material submitted in support of the request for a ruling. Verification of the factual information, representations, and other data may be required as a part of the audit process.

A was a U.S. citizen for Tax Years. A established two Canadian Registered Retirement Savings Plans (RRSPs) prior to Year 1. A did not learn about the need to make an election to defer taxation of income accruing in his RRSPs or to file Forms 8891 for his RRSPs until he was preparing his tax return for -------.

A states that the Internal Revenue Service has not communicated in any way with him regarding his RRSPs. 1 U.S. Information Return For Certain Canadian Registered Retirement Plans.
PLR-132478-07
2

Treas. Reg. § 301.9100-1(c) provides that the Commissioner has discretion to grant a taxpayer a reasonable extension of time, under the rules set forth in Treas. Reg. § 301.9100-3, to make a regulatory election under all subtitles of the Internal Revenue Code, except subtitles E, G, H, and I.

Treas. Reg. § 301.9100 -1(b) provides that an election includes an application for relief in respect of tax, and defines a regulatory election as an election whose due date is prescribed by a regulation, a revenue ruling, revenue procedure, notice, or announcement.

Treas. Reg. § 301.9100-3(a) provides that requests for relief subject to this section will be granted when the taxpayer provides the evidence (including affidavits described in Treas. Reg. § 301.9100-3(e)) to establish to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good faith, and the grant of relief will not prejudice the interests of the Government.

In the present situation, the election provided in Rev. Proc. 2002-23 is a regulatory election within the meaning of § 301.9100-1(b). Therefore, the Commissioner has discretionary authority under § 301.9100–1(c) to grant A an extension of time, provided that A satisfies the standards set forth in § 301.9100-3(a).

Based on the facts and circumstances of this case, we conclude that A satisfies the standards of § 301.9100-3. Accordingly, A is granted an extension of time until 60 days from the date of this ruling letter to elect the provisions of Rev. Proc. 2002-23 and file Forms 8891 for Tax Years.

Pursuant to section 4.07 of Rev. Proc. 2002-23, the election once made cannot be revoked except with the consent of the Commissioner. For Tax Years and all subsequent tax years until the tax year in which a final distribution is made from the RRSP, A must file a Form 8891 for each RRSP for which the election is made.

As provided in § 301.9100-1(a), the granting of an extension of time is not a determination that A is otherwise eligible to make the above-described election.

No ruling has been requested, and none is expressed, as to the application of any other section of the Code or regulations to the facts presented.

A copy of this ruling letter should be associated with A’s and his wife’s amended tax returns for Tax Years.
PLR-132478-07
3

This ruling is directed only to the taxpayer who has requested it. I.R.C. § 6110(k)(3) provides that it may not be used or cited as precedent.

Sincerely,

___
M. Grace Fleeman
Senior Technical Reviewer
CC:INTL:Br1

Enclosure:
Copy for 6110 purposes