To understand what these Notices are talking about, you have to go back to Internal Revenue Code
Section 6048 ("Information with Respect to Certain Foreign
Trusts"). Sub-paragraph c of this section says:
c) Reporting by United States beneficiaries
of foreign trusts.
If any United States person receives (directly or indirectly) during any taxable year of such person any distribution from a foreign trust, such person shall make a return with respect to such trust for such year which includes—
6048(c)(1)(A)the name of such trust,
6048(c)(1)(B)the aggregate amount of the distributions so received from such trust during such taxable year, and
6048(c)(1)(C)such other information as the Secretary may prescribe.
Form 3520 (Annual Return to Report Transactions
with Foreign Trusts and Receipts of Certain Foreign Gifts) and Form 3520A (Annual Information Return of a Foreign Trust with a US Owner) were orginally not required for Candian RRSP's, but IRS changed its position on this in 2003, so now U.S. citizens and residents with interests in Canadian RRSP's have to file 3520A every year, whether or not they take any distributions or make any contributions; and 3520 when they take distributions or make contributions to RRSP's.
on when income from the trusts is taxable has not changed, just the filing requirements.
Although the law provides for a penalty of 5% of the trust assets
for late filing, to the best of my knowledge, IRS will be lenient about accepting late filings for 2003.
These forms are a real hassle to fill out, and I'd love to see a flood of letters to Congress to do away with this law, but because not that many U.S. citizens have interests in RRSP's I don't expect Congress to do anything to help. This is part of the general effort of the U.S. government
to get more information about foreign transactions of U.S. citizens and residents.
You can find the forms online here:
Form 3520: http://www.irs.gov/pub/irs-pdf/f3520.pdf
You'll probably need to contact the custodian of the trust to get all the information asked for on the forms.
I hope this was helpful, but you still may have a tough job ahead, filling out the forms.