PLR 1336011: IRS grants more time to elect relief for a Canadian retirement plan

Plain-English summary

A U.S. citizen who had lived in Canada since childhood established a Canadian registered retirement savings plan and did not know that a U.S. election was needed for the plan. After learning that U.S. returns were required, the taxpayer asked for more time to elect the relief provided by Rev. Proc. 2002-23. The IRS found that the taxpayer satisfied the standards for relief and granted an extension until 60 days after the ruling date. The ruling required amended returns and Form 8891 filings for open years and continuing Form 8891 filings through the year of final distribution.

Ruling snapshot

• Question: May the taxpayer receive additional time to elect the provisions of Rev. Proc. 2002-23 for the listed tax years?
• Outcome: Approved, with an extension until 60 days from the ruling date.
• Key authorities: Treas. Reg. §§ 301.9100-1 and 301.9100-3; Rev. Proc. 2002-23.

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 201336011 [Third Party Communication:
Release Date: 9/6/2013 Date of Communication: Month DD, YYYY]
Index Number: 9100.22-00, 9114.03-06
Person To Contact:
---------------------- ---------------------, ID No. ------------------
-------------- Telephone Number:
--------------------------------------------- ----------------------
------------------------------ Refer Reply To:
CC:INTL:BR1
PLR-139837-11
Date:
May 31, 2013

              TY: ---------------

Legend

Taxpayer = -------------------------

RRSP = ----------------------------

Date = -----------------------

Year 1 = -------

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

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

This is in reply to a letter dated September 9, 2011, supplemented by a FAX dated May
9, 2013, requesting an extension of time under Treas. Reg. § 301.9100-3 for Taxpayer
to elect the provisions of Rev. Proc. 2002-23, 2002-1 C.B. 744, for Tax Years.

The rulings contained in this letter are based upon information and representations
submitted by Taxpayer and accompanied by penalty of perjury statement executed by
an appropriate party. While this office has not verified any of the material submitted in
support of the request for rulings, it is subject to verification on examination.

FACTS
PLR-139837-11 2

Taxpayer is a U.S. citizen and she has been a Canadian resident since childhood.
Taxpayer established RRSP after moving to Canada and all contributions were made
when she was a Canadian resident. Taxpayer filed her Canadian income tax returns
and paid the required taxes in Canada for Tax Years. The Taxpayer had no U.S.
source income and she was unaware of the need to file U. S. income tax returns until
Date. She then engaged a representative to prepare her U.S. returns for Tax Years and
was advised of the need to elect the provisions of Rev. Proc. 2002-23. The
representative requested this private letter ruling.

As of the date of the ruling request, Taxpayer represents that the Internal Revenue
Service had not communicated with the Taxpayer in any way regarding her RRSP.

RULING REQUESTED

Whether Taxpayer may receive an extension of time under Treas. Reg. § 301.9100-3 to
elect the provisions of Rev. Proc. 2002-23, 2002-1 C.B. 744, for Tax Years.

LAW AND ANALYSIS

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 Treas. Reg. § 301.9100-1(b). Therefore, the
Commissioner has discretionary authority under Treas. Reg. § 301.9100–1(c) to grant
Taxpayers an extension of time, provided that Taxpayers satisfy the standards set forth
in Treas. Reg. § 301.9100-3(a).

Based solely on the information submitted and representations made, we conclude that
Taxpayer satisfies the standards of Treas. Reg. § 301.9100-3. Accordingly, Taxpayer is
PLR-139837-11 3

granted an extension of time until 60 days from the date of this ruling letter to make an
election for Tax Years under Rev. Proc. 2002-23. As provided in Treas. Reg.
§ 301.9100-1(a), the granting of an extension of time is not a determination that
Taxpayers are otherwise eligible to make the above-described election.

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 each open year of Tax
Years, Taxpayer must file Form 1040X (Amended U.S. Individual Income Tax Return),
and attach a Form 8891 (U.S. Information Return for Beneficiaries of Certain Canadian
Registered Retirement Plans) for RRSP. For each subsequent tax year through the tax
year in which the final distribution is made from RRSP, Taxpayer must attach a Form
8891 for RRSP to her U.S. income tax return.

Except as expressly provided herein, no opinion is expressed or implied concerning the
tax consequences of any aspect of any transaction or item discussed or referenced in
this letter.

This letter ruling is directed only to the taxpayers who requested it. Section 6110(k)(3)
provides that it may not be used or cited as precedent.

Pursuant to a power of attorney on file with this office, a copy of this letter will be sent to
your authorized representative.

A copy of this letter must be attached to any income tax return to which it is relevant.
Alternatively, taxpayers filing their returns electronically may satisfy this requirement by
attaching a statement to their return that provides the date and control number of this
letter ruling.

                                    Sincerely,


                                    Elizabeth U. Karzon
                                    Chief, Branch 1
                                    Office of the Associate Chief Counsel
                                    (International))

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