6 worked RRSP and 401(k) Cross-Border Tax case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to rrsp and 401(k) cross-border tax work, not a specific client's file.
Case Study 1 · Cross-border exposure resolved
Foreign Reporting Brought Current, $14,500 Recovered — Canadian on US Payroll, Hamilton
Client: A Canadian with a US employer · Where: Hamilton, Ontario · Engagement: 9 weeks, fixed fee
Amount recovered$14,500
Reporting statusCurrent
Annual effortHours, not weeks
The situation — A Canadian with a US employer, Hamilton, Ontario
Foreign holdings at a Canadian with a US employer in Hamilton, Ontario had passed the reporting threshold without anyone noticing. Behind the disclosure problem sat invoices paid to a non-resident consultant working on site in Canada with no Regulation 105 withholding taken.
What we did for A Canadian with a US employer, Hamilton, Ontario
We applied the treaty rate to the dividend withholding, filed the NR4 return, and remitted the shortfall before the CRA assessed the payer for it, claiming the treaty relief and foreign tax credits on the Canadian return and correcting the disclosure position for the open years.
The result — A Canadian with a US employer, Hamilton, Ontario
The treaty position was accepted and $14,500 was recovered. Reporting is now current and the annual process takes hours rather than weeks.
Case Study 2 · Records and systems rebuilt
Books Rebuilt From Source, $20,000 In Unclaimed Input Tax Found — Cross-Border Contractor, Barrie
Client: A contractor working on both sides of the border · Where: Barrie, Ontario · Engagement: 9 weeks, fixed fee
Unclaimed tax found$20,000
Records rebuilt14 months
ProcessDocumented
The situation — A contractor working on both sides of the border, Barrie, Ontario
A contractor working on both sides of the border in Barrie, Ontario could not answer basic questions about its own numbers, because a departure year filed as a normal resident return with no deemed disposition reported sat between the bank statements and the ledger.
What we did for A contractor working on both sides of the border, Barrie, Ontario
We reconstructed the day count on both sides of the border and documented the residency and treaty position before either revenue authority asked, then documented the process so the work does not depend on any one person remembering how it was done.
The result — A contractor working on both sides of the border, Barrie, Ontario
Records rebuilt and reconciled, $20,000 recovered in input tax credits that the old file could not support, and a documented monthly process now in place.
Case Study 3 · Missed incentive claimed
Incentive Review Recovered $108,000 Across 3 Open Years — US Citizen in Canada, Halifax
Client: A US citizen living in Canada · Where: Halifax, Nova Scotia · Engagement: 3 weeks, fixed fee
Recovered$108,000
Open years claimed3
Ongoing trackingIn place
The situation — A US citizen living in Canada, Halifax, Nova Scotia
An incentive review at a US citizen living in Canada in Halifax, Nova Scotia started from a simple question: what has never been claimed? The answer ran to 3 years, driven by winters spent in the United States with the day count kept casually and no residency position documented anywhere.
What we did for A US citizen living in Canada, Halifax, Nova Scotia
We aligned the Canadian and US reporting of the same income so the foreign tax credit claim carried support on both returns, documenting eligibility to the standard a reviewer would apply rather than the standard a claim form requires.
The result — A US citizen living in Canada, Halifax, Nova Scotia
The credits produced $108,000 across the open years, and the tracking now in place means the following year's claim is documented as the work happens rather than reconstructed afterwards.
Case Study 4 · Deadline rescue
9-Week Turnaround Beat The Deadline And Saved $71,000 — US Retirement Account Holder, Guelph
Client: A dual citizen with a US retirement account · Where: Guelph, Ontario · Engagement: 9 weeks, fixed fee
Late-filing penalty avoided$71,000
Filed with18 days to spare
Next yearPapers ready
The situation — A dual citizen with a US retirement account, Guelph, Ontario
With the deadline for rrsp and 401(k) cross-border tax weeks away, a dual citizen with a US retirement account in Guelph, Ontario was carrying winters spent in the United States with the day count kept casually and no residency position documented anywhere. The exposure if the date slipped was around $71,000.
What we did for A dual citizen with a US retirement account, Guelph, Ontario
We filed the outstanding T1135 disclosures through the Voluntary Disclosures Program, which eliminated the penalty exposure entirely. The filing went in complete rather than provisional, so there was no amended return to follow.
The result — A dual citizen with a US retirement account, Guelph, Ontario
Filed with 18 days to spare. $71,000 in late-filing penalties avoided, and the working papers are ready for the following year.
Case Study 5 · CRA review defended
$56,000 Proposed Adjustment Withdrawn In Full — US LLC Shareholder, London
Client: A shareholder of a US LLC · Where: London, Ontario · Engagement: 7 weeks, fixed fee
Adjustment withdrawn$56,000
File closed in7 weeks
Penalties assessedNone
The situation — A shareholder of a US LLC, London, Ontario
A shareholder of a US LLC in London, Ontario received a proposal letter opening a review of rrsp and 401(k) cross-border tax. The CRA had identified dividends paid to a non-resident shareholder with nothing withheld, leaving the payer holding the liability and proposed an adjustment of $56,000, with 30 days to respond.
What we did for A shareholder of a US LLC, London, Ontario
We treated the response as an evidence exercise rather than an argument. We restructured the US holding so the Canadian and US characterisations aligned, ending the double taxation going forward, then indexed every supporting document against the specific line the auditor had questioned.
The result — A shareholder of a US LLC, London, Ontario
The proposed adjustment was withdrawn in full — all $56,000 of it. The file closed in 7 weeks with no change to the assessed amounts and no penalty.
Case Study 6 · Objection and relief
Desk-Review Assessment Of $51,000 Vacated — US Pension Recipient, Toronto
Client: A Canadian resident receiving US pension income · Where: Toronto, Ontario · Engagement: 7 weeks, fixed fee
Assessment vacated$51,000
Supporting recordsNow on file
AccountCleared
The situation — A Canadian resident receiving US pension income, Toronto, Ontario
A Canadian resident receiving US pension income in Toronto, Ontario was carrying $51,000 of penalties and interest arising from US tax paid but no foreign tax credit claimed on the Canadian return, much of it accumulated during a period the CRA itself had delayed.
What we did for A Canadian resident receiving US pension income, Toronto, Ontario
We filed the section 216 election with the supporting rental statements and recovered the excess withholding as a refund and framed the relief application on the specific grounds the CRA guidelines recognise rather than on general hardship.
The result — A Canadian resident receiving US pension income, Toronto, Ontario
The assessment was vacated. $51,000 came off the account, and the documentation now on file makes the same position straightforward to defend next time.
Reviewed for the 2025 tax year by Udit Gupta, Founder and Tax Accountant. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
