United States Tax Court

T.C. Memo. 2023-31

GEORGE B. DENGIN,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

—————

Docket No. 5822-17. Filed March 14, 2023.

—————

Jonathan I. Reich and Michael C. Cohen, for petitioner.

Gregory Michael Hahn and Amy Chang, for respondent.

MEMORANDUM OPINION

BUCH, Judge: George B. Dengin was the owner and beneficiary 

of three Canadian Registered Retirement Savings Plans (RRSPs) during

2006 through 2011, the years in issue. Two of those plans closed in 2006 

and the third plan was opened in May 2006 and remained open 

throughout the years in issue.

Although Mr. Dengin is a Canadian citizen and lived in Canada 

for most of his life, he was a U.S. citizen by birth and until his formal 

expatriation in 2016. Unaware of his U.S. tax filing obligations, he failed

to file U.S. federal income tax returns for the years in issue until after 

he was already under examination. 

Earnings from Canadian retirement plans are included in income 

for U.S. tax purposes as they accrue, but a taxpayer can elect to defer 

that income until a distribution is made from a plan. During the years 

in issue, a taxpayer could make this election by attaching Form 8891, 

U.S. Information Return for Beneficiaries of Certain Canadian 

Registered Retirement Plans, to a timely filed return. Mr. Dengin made 

Served 03/14/23
2

[*2] such an election as to one of his three accounts on untimely returns

filed in 2013. Thereafter, the Commissioner issued Revenue Procedure 

2014-55, §§ 4.02, 9, 2014-44 I.R.B. 753, 754–55, which eliminated the 

timeliness requirement and was retroactive to 1996. That revenue 

procedure also rendered Form 8891 obsolete as of December 31, 2014, 

after Mr. Dengin had filed his returns. See id. § 5.02, 2014-44 I.R.B. 

at 755.

Pending before the Court is the Commissioner’s Motion for 

Partial Summary Judgment, asking the Court to conclude that Mr. 

Dengin failed to make a proper election. Mr. Dengin substantially 

complied with Revenue Procedure 2014-55 as to the accounts opened 

and held during the tax years for which he filed returns. That revenue 

procedure was retroactive to the years in issue and eliminated the 

timely return requirement. Because he did not file returns for tax years 

earlier than 2006, he failed to make an election with respect to the plan 

opened before 2006.

Background1

Until 2016, George Dengin was a dual citizen of the United States 

and Canada. He was born in the United States but moved to Canada in 

1965 when he was approximately 10 years old. Mr. Dengin became a 

naturalized Canadian citizen in 1970 and has resided in Canada since 

his move. He married in 2003. His wife, Inessa Dengin, is a citizen and 

resident of Canada.

In 1980, Mr. Dengin became a licensed stockbroker and 

investment adviser in Canada. He worked as a licensed stockbroker 

from 1980 to 1985 and 1990 to 2000. During this time, he also began 

investing in stocks for his own accounts. By 2000, his investments were

so lucrative that he retired from being a stockbroker and concentrated 

solely on his personal investments.

Mr. Dengin was the beneficiary and owner of several RRSPs.

Before 2006, Mr. Dengin’s retirement funds were held in an RRSP 

account with Graydon Elliot Capital (RRSP Account 1). RRSP Account 

1 was closed in February 2006, and the assets in the account were 

1 Unless otherwise indicated, all statutory references are to the Internal 

Revenue Code, Title 26 U.S.C., in effect at all relevant times, all regulation references 

are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant 

times, and all Rule references are to the Tax Court Rules of Practice and Procedure. 

All monetary amounts are shown in U.S. dollars and rounded to the nearest dollar.
3

[*3] transferred to another RRSP account with Graydon Elliot Capital 

(RRSP Account 2). RRSP Account 2 was closed in May 2006, and its

assets were transferred to an RRSP account with Union Securities, Ltd. 

(RRSP Account 3). RRSP Account 3 remained open until Union 

Securities went out of business in 2012.2

During the time Mr. Dengin owned the RRSP accounts, their fair 

market value increased because of his investment activities. He did a 

substantial amount of stock trading within and between these accounts. 

Under Canadian law, the gain earned in Mr. Dengin’s RRSP accounts

did not result in taxable income until he received a distribution. See

Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), § 146(8). Mr. Dengin began

taking withdrawals from RRSP Account 3 in 2011. That year, he 

received a distribution of $3,548,252.

In 2012, the Commissioner commenced a federal income tax 

examination for Mr. Dengin’s 2006 through 2011 tax years. When the 

examination began, Mr. Dengin did not have a Social Security number, 

nor had he ever filed a U.S. individual income tax return. He was 

unaware of his U.S. tax filing requirements, and as a result, had not

sought advice about those requirements from his longtime accountant. 

Mr. Dengin applied for and received a Social Security number,

and in March 2013, he submitted tax returns for the years under 

examination. He attached a Form 8891 to each return, indicating that 

he had made an election under Article XVIII(7) of the United States’ tax 

treaty with Canada3 to defer U.S. tax on income earned in RRSP 

Account 3 until a distribution was made from that account. He did not

attach Form 8891 for RRSP Account 1 or RRSP Account 2 to any return.

2 When Union Securities went out of business, the assets in RRSP Account 3 

were transferred to an RRSP account with PI Financial Corp. In 2014, Mr. Dengin 

transferred the assets from PI Financial Corp. to an RRSP account with Global 

Securities Corp. He eventually closed his RRSP account with Global Securities Corp.

in 2015, withdrawing all funds from the account. In addition to the accounts above, 

Mr. Dengin opened and closed an RRSP account with the Bank of Montreal in 2006

without any activity having taken place in the account.

3 Convention With Respect to Taxes on Income and on Capital, Can.-U.S., Sept. 

26, 1980, T.I.A.S. No. 11,087, as Amended by the Protocols signed on June 14, 1983, 

T.I.A.S. No. 11,087 (Protocol 1), and March 28, 1984, T.I.A.S. No. 11,087 (Protocol 2), 

1986-2 C.B. 258. It was further amended by Protocols signed on March 17, 1995, 

T.I.A.S. No. 97-1216 (Protocol 3), July 29, 1997, T.I.A.S. No. 97-1216 (Protocol 4), and 

September 21, 2007, T.I.A.S. No. 08-1215.2 (Protocol 5). We refer to the Convention 

and the Protocols collectively as the U.S.-Canada Income Tax Treaty or Treaty.
4

[*4] On his 2011 return, he reported the $3,548,252 distribution from 

RRSP Account 3 as taxable income from pensions and annuities. 

In 2016, Mr. Dengin relinquished his U.S. nationality. He made 

a formal renunciation of his U.S. nationality on October 3, 2016, which 

the U.S. State Department approved on November 3, 2016. Mr. Dengin 

notified the IRS of his expatriation in 2017. 

On December 8, 2016, the Commissioner sent Mr. Dengin a notice 

of deficiency for 2006 through 2011. The adjustments in that notice were 

based on the Commissioner’s determination that Mr. Dengin was 

subject to U.S. tax on undistributed earnings in his RRSP accounts for 

the years in issue because he failed to make the election to defer taxation

under Article XVIII(7).4 The determinations are as follows:

Year Deficiency

Additions to Tax / Penalties

§ 6651(a)(1) § 6662(a)

2006 $6,170,062 $1,542,516 $1,234,012

2007 7,003,016 1,750,754 1,400,603

2008 5,701,781 1,425,445 1,140,356

2009 3,295,133 823,783 659,027

2010 7,450,688 1,862,672 1,490,138

2011 3,075,585 768,896 615,117

While residing in Canada, Mr. Dengin timely petitioned the Tax 

Court. In the Petition, he alleges that the Commissioner erred in 

including income accrued in his RRSP accounts as taxable income for 

each year in issue. 

Pending before us is the Commissioner’s Motion for Partial 

Summary Judgment asking us to decide whether capital gain and 

interest income that accrued in Mr. Dengin’s RRSP accounts is

includible in his taxable income for the years in issue. The 

Commissioner argues that Mr. Dengin did not make a proper election to 

defer U.S. tax on undistributed earnings in his RRSP accounts pursuant 

to Article XVIII(7). Mr. Dengin objects to this Motion, alleging that the 

income is not includible in his taxable income for the years in issue 

4 Because the Commissioner took the position that the undistributed income 

was taxable when earned, the Commissioner made a corresponding determination that

the 2011 distribution of $3,548,252 was not includible in Mr. Dengin’s taxable income

at the time of distribution.
5

[*5] because he met or substantially complied with the requirements to 

make the tax deferral election. 

Discussion

I. Summary Judgment Standard

We grant summary judgment when there is no genuine dispute 

as to any material fact and a decision may be rendered as a matter of 

law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 

(1992), aff’d, 17 F.3d 965 (7th Cir. 1994). The moving party bears the 

burden of showing that there is no genuine dispute as to any material 

fact. Sundstrand Corp., 98 T.C. at 520. When a motion for summary 

judgment is properly made and supported, an opposing party may not 

rest on mere allegations or denials. Rule 121(d). Rather, the party’s 

response, by affidavits or declarations, or as otherwise provided in Rule 

121, must set forth specific facts showing there is a genuine factual 

dispute for trial. Id. In deciding whether to grant summary judgment, 

we view the facts and make inferences in the light most favorable to the 

nonmoving party. Sundstrand Corp., 98 T.C. at 520. For the purposes of 

this Motion, we make factual inferences in the light most favorable to 

Mr. Dengin, the nonmoving party.

II. Overview of Deferral Election from U.S.-Canada Income Tax 

Treaty

The U.S.-Canada Income Tax Treaty was negotiated in 1980. 

Since then, it has been amended five times.5

Article XVIII(7) of the Treaty “provides a method to resolve 

conflicts between the Canadian and U.S. tax treatment of individual 

retirement accounts.” Treasury Department Technical Explanation of 

the U.S.-Canada Income Tax Treaty, as Amended by the Protocol Signed 

on June 14, 1983 and the Protocol Signed on March 28, 1984, as 

reprinted in 1987-2 C.B. 298, 324 (Treasury Technical Explanation of 

Protocols 1 and 2).6 Generally, a U.S. citizen who is a beneficiary of a 

5 These amendments are referred to as “protocols.” The relevant amendments 

in this case are Protocol 3 and Protocol 5. 

6 This provision initially appeared in Article XXIX(5), but Protocol 3 moved it 

to Article XVIII(7) and made it reciprocal for Canadian citizens and residents, whereas 

it was previously applicable only to U.S. citizens and residents. See Treasury Technical 

Explanation of Protocols 1 and 2; Treasury Department Technical Explanation of the 
6

[*6] Canadian retirement plan is taxed on plan earnings as they accrue 

for U.S. tax purposes and when they are distributed for Canadian tax 

purposes. Id. Article XVIII(7) enables consistent treatment in both the 

United States and Canada if an election is made by the taxpayer. 

The latest version of Article XVIII(7), as amended by Protocol 5, 

provides:

A natural person who is a citizen or resident of a 

Contracting State and a beneficiary of a trust, company, 

organization or other arrangement that is a resident of the 

other Contracting State, generally exempt from income 

taxation in that other State and operated exclusively to 

provide pension or employee benefits may elect to defer 

taxation in the first-mentioned State, subject to rules 

established by the competent authority of that State, with 

respect to any income accrued in the plan but not 

distributed by the plan, until such time as and to the extent 

that a distribution is made from the plan or any plan 

substituted therefor.[7]

Essentially, this article provides that a U.S. citizen or resident can elect 

to defer U.S. tax on income that accrues in a Canadian retirement 

account until a distribution is made from that account. While Article 

XVIII(7) enables taxpayers to elect deferral, it does not inform them how 

to make this election. Instead, it grants each country the power to 

establish rules for making an election. In the United States this power 

is vested in the IRS. The IRS has issued several revenue procedures and 

notices detailing the requirements an individual must satisfy to make 

this election.

Protocol Amending the U.S.-Canada Income Tax Treaty, as Amended by the Protocols 

Signed on June 14, 1983 and March 28, 1984.

7 Article XVIII(7) was not modified in Protocol 4, and it is substantially the 

same under Protocol 5 as it was under Protocol 3. Protocol 5 replaced the word “under” 

with “subject to” to clarify “that an election to defer taxation with respect to 

undistributed income accrued in a plan may be made whether or not the competent 

authority . . . has prescribed rules for making an election.” See Department of the 

Treasury Technical Explanation of the Protocol Done at Chelsea on September 21, 

2007 Amending the U.S.-Canada Income Tax Treaty, as Amended by the Protocols 

Done on June 14, 1983, March 28, 1994, March 17, 1995, and July 29, 1997; U.S.-

Canada Income Tax Treaty. 
7

[*7] III. Requirements to Obtain Treaty Benefits

A. Revenue Procedure 89-45

In 1989, the Commissioner issued Revenue Procedure 89-45, 

1989-2 C.B. 596, which provided the original requirements for making 

the deferral election under the Treaty. The revenue procedure required 

taxpayers to attach a written statement to a timely filed Form 1040, 

U.S. Individual Income Tax Return, for the respective year. Id. § 3.01, 

1989-2 C.B. at 596. The statement had to include the following 

information: the name of the plan trustee and plan account number; the 

total amount of earnings the plan derived in the current year; the total 

amount of contributions made to the plan while the beneficiary was a 

resident of Canada as of the end of the taxable year; the total amount 

contributed to the plan in all years; the amount of earnings that will be 

deferred under the Treaty for the current year; and the plan balance at 

the end of the current year. Id. If a taxpayer wanted to continue making 

this election in subsequent years, the taxpayer was required to attach a 

statement to his or her federal tax return for that year that showed

(1) an election was made under the revenue procedure for the prior year 

and (2) the plan balance at the end of the return year. Id. § 3.04, 1989-2 

C.B. at 596.

B. Revenue Procedure 2002-23

The IRS modified the requirements for making the deferral 

election when it issued Revenue Procedure 2002-23, §§ 1, 7, 2002-1 C.B. 

744, 744–45, which superseded Revenue Procedure 89-45 and became 

effective for tax years ending on or after December 31, 2001. However, 

if the tax year ended before that date and began on or after January 1, 

1996, the taxpayer could make the deferral election by satisfying either 

Revenue Procedure 89-45 or Revenue Procedure 2003-23. Rev. Proc. 

2002-23, § 7.

To elect deferral under this revenue procedure, taxpayers were 

required to attach a written statement to a timely filed tax return for 

the respective year. Id. § 4.02, 2002-1 C.B. at 745. The statement had to 

include the following information: a statement claiming the benefit of 

Article XVIII(7); the name of the plan trustee and the plan account 

number; and the plan balance at the beginning of the current year. Id.

§ 4.01, 2002-1 C.B. at 745. If the taxpayer wanted to continue making 

this election in subsequent years, each year the taxpayer would have to 
8

[*8] repeat this process until a final distribution was made from the 

plan. Id. § 4.02. 

Although this revenue procedure generally required taxpayers to 

attach their election statement to a timely filed return, it also allowed

an extension of time to make the election under procedures provided in 

Treasury Regulation §§ 301.9100-1 and 301.9100-3. Rev. Proc. 2002-23, 

§ 4.06, 2002-1 C.B. at 745.

C. Notice 2003-75

In 2003, the IRS issued I.R.S. Notice 2003-75, § 5, 2003-2 C.B. 

1204, effective for taxable years beginning after December 31, 2002. This 

notice established a simplified reporting regime for taxpayers who held 

interests in Canadian retirement plans. The notice coordinated certain 

reporting rules with the requirements for making a deferral election 

under Revenue Procedure 2002-23. Notice 2003-75, § 2.01, 2003-2 C.B. 

at 1204. Before Notice 2003-75, taxpayers who made the deferral 

election had to comply with Revenue Procedure 2002-23, were subject to 

section 6048 reporting requirements, and had to file Form 3520, Annual 

Return to Report Transactions with Foreign Trusts and Receipt of 

Certain Foreign Gifts, or Form 3520–A, Annual Information Return of 

Foreign Trust With a U.S. Owner, or both, annually. Rev. Proc. 2014-55, 

§ 2.04, 2014-44 I.R.B. at 753. Notice 2003-75, § 2.01, 2003-2 C.B. at 1204,

enabled such taxpayers to comply with all of these requirements by 

attaching a single form to a timely filed return. This form, Form 8891, 

was released in 2004. See Rev. Proc. 2014-55, § 2.07, 2014-44 I.R.B. at 

754.

D. Revenue Procedure 2014-55

In 2014, the IRS again modified the requirements for making the

deferral election through Revenue Procedure 2014-55, §§ 1, 8, 9, 2014-44 

I.R.B at 753, 755, which superseded Revenue Procedure 2002-23 and 

Notice 2003-75 and is effective for tax years beginning on or after 

January 1, 1996. This revenue procedure makes the election automatic 

in certain circumstances and no longer requires taxpayers to file 

statements with their returns. Rev. Proc. 2014-55, §§ 4.02, 4.06, 5.02, 9, 

2014-44 I.R.B. at 754–55. Its issuance rendered Form 8891 obsolete as 

of December 31, 2014. Id. §§ 5.02, 9.

Under Revenue Procedure 2014-55, a taxpayer who is an “eligible 

individual” who did not previously make a deferral election under the 

Treaty is automatically treated as having made the election in the first 
9

[*9] year in which the individual would have been entitled to elect the 

benefits with respect to the plan.8 Id. § 4.02. This means that the 

taxpayer does not have to comply with the reporting requirements 

provided in prior revenue procedures. Id. § 4.06. Any election made 

pursuant to this revenue procedure is made on a plan-by-plan basis. Id.

§ 3, 2014-44 I.R.B. at 754.

Revenue Procedure 2014-55, § 4.01, 2014-44 I.R.B. at 754, defines 

an “eligible individual” as a beneficiary of a Canadian retirement plan 

who:

A) Is or at any time was a U.S. citizen or resident 

(within the meaning of section 7701(b)(1)(A)) while a 

beneficiary of the plan; 

B) Has satisfied any requirement for filing a U.S. 

Federal income tax return for each taxable year during 

which the individual was a U.S. citizen or resident; 

C) Has not reported as gross income on a U.S. 

Federal income tax return the earnings that accrued in, but 

were not distributed by, the plan during any taxable year 

in which the individual was a U.S. citizen or resident; and 

D) Has reported any and all distributions received 

from the plan as if the individual had made an election 

under Article XVIII(7) of the Convention for all years 

during which the individual was a U.S. citizen or resident.

If the taxpayer is not an eligible individual, then the taxpayer 

must seek the Commissioner’s consent to make the deferral election. Id.

§ 4.04, 2014-44 I.R.B. at 755.

Additionally, certain taxpayers who are not eligible individuals 

may be able to defer tax on RRSP earnings through alternative methods. 

When Revenue Procedure 2014-55 was issued, the IRS had recently 

begun offering Streamlined Foreign Offshore Procedures (Streamlined 

Program) to taxpayers who certified that they nonwillfully failed to 

report and pay tax with respect to foreign assets. See Internal Revenue 

8 Mr. Dengin did not previously make the deferral election under Revenue 

Procedure 2002-23 because he failed to attach Form 8891 to a timely filed return. See

Kohli v. Commissioner, T.C. Memo. 2009-287, 98 T.C.M. (CCH) 572, 573 (“[T]he 

substantial compliance doctrine has no place in determining whether a timely election 

has been made.” (footnote omitted)).
10

[*10] Service, Streamlined Filing Compliance Procedures,

https://www.irs.gov/individuals/international-taxpayers/streamlinedfiling-compliance-procedures (last updated Oct. 12, 2022). The 

Streamlined Program provided procedures for filing amended or 

delinquent returns and terms for resolving tax and penalties. Id.

Relevantly, taxpayers participating in the program were sometimes 

offered relief consistent with Revenue Procedure 2014-55 if they failed 

to satisfy its requirements. For example, in the Streamlined Program 

frequently asked questions and answers for U.S. taxpayers residing 

outside the United States, the IRS stated that a taxpayer that is not an 

eligible individual because they failed to file a U.S. tax return for each 

year they were a U.S. citizen or resident, but met the other 

requirements, will still be afforded relief consistent with Revenue 

Procedure 2014-55 for the tax years included in their submission if they 

submit the tax returns through the streamlined program. See Internal 

Revenue Service, Streamlined Filing Compliance Procedures for U.S. 

Taxpayers Residing Outside the United States Frequently Asked 

Questions and Answers, Q&A-3, https://www.irs.gov/individuals/

international-taxpayers/streamlined-filing-compliance-procedures-forus-taxpayers-residing-outside-the-united-states-frequently-askedquestions-and-answers (last updated Nov. 18. 2022).

IV. The Commissioner’s Arguments

The Commissioner puts forth three arguments to support his 

Motion for Partial Summary Judgment. The first argument is that Mr.

Dengin is not entitled to automatic relief under Revenue Procedure 

2014-55 because he is not an eligible individual. The Commissioner

contends that Mr. Dengin is not an eligible individual because pursuant 

to section 4.01(B) of the revenue procedure he (1) did not timely file his 

U.S. tax returns and (2) did not file a tax return for each year he was a 

U.S. citizen and required to file. The Commissioner’s second argument 

is that because Mr. Dengin failed to attach Forms 8891 to timely filed

U.S. tax returns or request an extension to file the form with a late 

return under Treasury Regulation § 301.9100-2, he has not satisfied the 

deferral election requirements under Revenue Procedure 2002-23.

Lastly, the Commissioner argues that the doctrine of substantial

compliance does not apply in determining whether Mr. Dengin satisfied 

the deferral election requirements under Revenue Procedure 2014-55 or 

Revenue Procedure 2002-23. The Commissioner contends that strict 

compliance is required because the issue to be determined goes to the 

substance or essence of both revenue procedures. 
11

[*11] V. Revenue Procedure 2014-55, § 4.01(B)

In the Motion for Partial Summary Judgment, the Commissioner 

does not dispute whether Mr. Dengin satisfied requirements (A), (C), 

and (D) of Revenue Procedure 2014-55, § 4.01, which require that the 

taxpayer be a U.S. citizen or resident while a beneficiary of a plan, the 

taxpayer not report on a federal tax return undistributed income 

accrued in a plan during any year in which the taxpayer is a U.S. citizen

or resident, and the taxpayer report distributions received from a plan

for all years in which the taxpayer is a U.S. citizen or resident. The only 

requirement at issue is section 4.01(B)—namely, whether Mr. Dengin 

filed a U.S. federal income tax return for each taxable year during which 

he was a U.S. citizen or resident.

A. The Requirement to Timely File

The Commissioner argues that Mr. Dengin is not an eligible 

individual under Revenue Procedure 2014-55 because he did not timely 

file U.S. tax returns as required under section 4.01(B). Mr. Dengin 

argues that there is no timeliness requirement under that section. We 

agree with Mr. Dengin; there is no requirement in section 4.01(B) that 

the returns be timely filed.

Courts have generally used statutory interpretation principles 

when interpreting the text of revenue procedures. See, e.g., Ford Motor 

Co. v. United States, 768 F.3d 580, 591–93 (6th Cir. 2014) (applying 

statutory canons to assess competing interpretations of a revenue 

procedure before considering their consistency with its general policy 

and structure); Dillon, Read & Co. v. United States, 875 F.2d 293, 298 

(Fed. Cir. 1989) (applying the statutory canon of construction that looks 

at every material part of a statute to examine the parties’ interpretation 

of a revenue procedure). When faced with a question of textual 

interpretation, the starting point must be the text itself. Hawse v. 

Commissioner, T.C. Memo. 2015-99, at *17. The text of Revenue 

Procedure 2014-55, § 4.01(B), does not include the word “timely,”

whereas Revenue Procedures 89-45 and 2002-23 both explicitly required 

taxpayers to timely file U.S. returns to make the deferral election. If the 

IRS wanted Revenue Procedure 2014-55 to include a timeliness

requirement, it could have clearly stated it. See Smith v. Commissioner, 

151 T.C. 41, 56 (2018) (“[W]here [a drafting authority] knows how to say 

something but chooses not to, its silence is controlling.” (first alteration 

in original) (quoting CBS, Inc. v. PrimeTime 24 Joint Venture, 245 F.3d 

1217, 1226 (11th Cir. 2001))). The Commissioner is asking this Court to 
12

[*12] insert a timeliness requirement in Revenue Procedure 2014-55 

even though it could have been written into the procedure as it was in 

Revenue Procedure 2002-23 and Revenue Procedure 89-45. We refuse to 

do so. 

Our conclusion is further supported by the IRS’s reasoning for 

issuing Revenue Procedure 2014-55. The IRS explained that Revenue 

Procedure 2014-55 was issued to make it easier for taxpayers to comply 

with the deferral election requirements under Article XVIII(7). See

I.R.S. News Release IR-2014-97 (Oct. 7, 2014). Reading Revenue 

Procedure 2014-55 as forgoing the timeliness requirement is consistent

with this reasoning. Therefore, we find that Revenue Procedure 

2014-55, § 4.01(B), does not include a timeliness requirement.

B. The Requirement to File for Each Taxable Year 

The Commissioner argues that Mr. Dengin is not an eligible 

individual under Revenue Procedure 2014-55 because he did not “[file]

a U.S. federal income tax return for each taxable year during which [he]

was a U.S. citizen” as required under section 4.01(B). We understand

the Commissioner to have interpreted “each taxable year” to include 

each year in which a taxpayer has received taxable income. The 

Commissioner therefore argues that because Mr. Dengin has filed 

returns only for 2006 to 2011, he does not satisfy this requirement. 

The Commissioner’s argument runs contrary to his own guidance 

issued contemporaneously with Revenue Procedure 2014-55. On the 

same day Revenue Procedure 2014-55 was issued, the IRS issued a news 

release that summarized the revenue procedure and its applicability. 

See I.R.S. News Release IR-2014-97. The news release stated that U.S. 

citizens and residents would automatically qualify for the tax deferral 

election “as long as they filed and continue to file U.S. returns for any 

year they held an interest in an RRSP . . . and include any distributions 

as income on their U.S. returns.” Id. This guidance provides a more 

lenient interpretation of “each taxable year.”

Mr. Dengin argues that he has satisfied this requirement for 

RRSP Account 2 and RRSP Account 3. He interprets “each taxable year” 

as “each taxable year in which the taxpayer had the RRSP account for 

which the deferral is requested.” He therefore argues that, because he is 

requesting deferral only for his RRSP accounts held from 2006 to 2011,

and he filed returns for those years, he has satisfied section 4.01(B). On 
13

[*13] the basis of the discussion below, we find that Mr. Dengin does not 

strictly satisfy this requirement for RRSP Account 1, 2, or 3. 

1. Mr. Dengin’s Arguments to Support His 

Interpretation of “Each Taxable Year”

Mr. Dengin puts forth three arguments as to why his 

interpretation of “each taxable year” includes only years for which 

deferral is requested. First, he argues that his interpretation 

harmonizes section 4.01(B) with section 4.01(A), which requires that the

taxpayer be a U.S. citizen or resident while a beneficiary of the plan.

This argument is unpersuasive. In our discussion above, we noted that 

when a drafting authority knows how to say something, but chooses not 

to, the silence informs the Court. See Smith, 151 T.C. at 56. If the IRS 

wanted section 4.01(B) to require taxpayers to file returns only for the 

years in which they held the RRSP account for which they request

deferral, it would have stated that. 

Next, Mr. Dengin argues that because Revenue Procedure 

2014-55 arose in the context of the Streamlined Program, terms of that 

program should inform our interpretation of “each taxable year.”9 But 

although the Streamlined Program provides relief consistent with relief 

available under Revenue Procedure 2014-55, it does not deem

participants to have satisfied the revenue procedure, and it does not 

inform us on how to interpret the requirements of Revenue Procedure

2014-55. Mr. Dengin is asking the Court to insert Streamlined Program 

guidance into the Revenue Procedure. We decline to do so.

Lastly, Mr. Dengin argues that because Revenue Procedure

2014-55 was intended to simplify the deferral election requirements, 

“each taxable year” should be interpreted in a way that is not 

burdensome. Mr. Dengin is correct in that the issuance of Revenue 

Procedure 2014-55 makes the deferral election requirements less 

burdensome for taxpayers. However, we must apply the revenue 

procedure as written. If we look strictly at the text in the revenue 

procedure, Mr. Dengin’s interpretation goes against the plain and 

ordinary meaning of “each taxable year.”

9 Mr. Dengin did not request to participate in the Streamlined Program, and 

even if he had, he might not have been eligible. See Streamlined Filing Compliance 

Procedures, supra (“If the IRS has initiated a civil examination of taxpayer’s returns 

for any taxable year, . . . the taxpayer will not be eligible to use the streamlined 

procedures.”). 
14

[*14] Mr. Dengin does not point to any other IRS guidance to support 

his interpretation. Therefore, we reject his interpretation of “each 

taxable year” because it goes against the plain and ordinary meaning of 

the revenue procedure. Furthermore, a more lenient interpretation of 

“each taxable year” includes each year the taxpayer held an interest in 

an RRSP, not just the years in which the taxpayer held an interest in 

the RRSP for which deferral is requested, as Mr. Dengin argues. 

2. Whether Mr. Dengin Filed a Return for “Each 

Taxable Year”

We need not decide the precise meaning of “each taxable year” 

because under any reasonable interpretation of “each taxable year,” Mr. 

Dengin fails to strictly satisfy Revenue Procedure 2014-55, § 4.01(B), for 

RRSP Accounts 1, 2, and 3. The phrase “each taxable year” could be 

interpreted as either (1) for each year a taxpayer receives taxable income 

or (2) for each year the taxpayer holds an interest in an RRSP. We will 

consider the facts under both interpretations, but Mr. Dengin does not 

satisfy the requirements under either interpretation.

If we accepted the Commissioner’s argument that “each taxable 

year” means each year a taxpayer receives taxable income, Mr. Dengin 

would not satisfy this requirement because he failed to file a U.S. tax 

return for each year that he received taxable income. To qualify for relief 

under this approach, Mr. Dengin must have filed U.S. returns from at 

least 1980, when he began working as a stockbroker, until his 

expatriation in 2016; but for purposes of this opinion, he must have filed 

returns from 1980 until 2011, the last year in issue. He filed returns 

only from 2006 to 2011, so he would not satisfy this requirement. 

But Mr. Dengin also fails to satisfy the less stringent requirement 

that he have filed tax returns for each year he was a beneficiary of an 

RRSP account. To qualify for relief under this approach, Mr. Dengin 

must have filed a U.S. return for each year in which he was a beneficiary 

of an RRSP account. Because Mr. Dengin was a beneficiary of RRSP 

Account 1 before 2006, and he did not file a U.S. return before 2006, he 

does not satisfy this requirement.

C. The Doctrine of Substantial Compliance 

Because we determined that Mr. Dengin failed to strictly comply 

with section 4.01(B), we will consider whether he substantially 

complied. Under the doctrine of substantial compliance, a taxpayer may 

satisfy regulatory and other requirements by “less-than-literal 
15

[*15] compliance” in certain circumstances. Am. Air Filter Co. v. 

Commissioner, 81 T.C. 709, 719 (1983).10

The Commissioner argues that the doctrine of substantial 

compliance should not apply to section 4.01(B) because the requirement

to file a return for each tax year that a taxpayer is a U.S. citizen is 

essential to taking advantage of the deferral election under the Treaty. 

The Commissioner therefore contends that Mr. Dengin must strictly 

comply with the requirement if he wants to make the deferral election 

for each of his RRSPs. 

Mr. Dengin argues that the doctrine of substantial compliance 

should apply to section 4.01(B). His main argument is that because the 

doctrine can be used to determine compliance with regulatory 

requirements, it should be applied more liberally to determine 

compliance with section 4.01(B), an administrative requirement from a 

revenue procedure. We conclude that Mr. Dengin has substantially 

complied with section 4.01(B) for RRSP Accounts 2 and 3, but he failed 

to substantially comply for RRSP Account 1. 

1. Applicability of the Substantial Compliance Doctrine

This Court has applied the doctrine of substantial compliance to 

regulations and other IRS guidance such as revenue procedures. See 

Coca-Cola Co., 155 T.C. at 287. The question we must ask in 

determining whether to apply substantial or strict compliance to a 

requirement is whether the requirement relates “to the substance or 

essence of the [governing law].” Bond v. Commissioner, 100 T.C. 32, 40–

41 (1993) (quoting Taylor v. Commissioner, 67 T.C. 1071, 1077–78 (1977)

and authorities cited therein). If the requirement is essential to the 

governing law, then it can be satisfied only by “strict adherence.” Id.

However, if the requirement is “procedural or directory in that [it is] not 

of the essence of the thing to be done,” it can be satisfied “by substantial

. . . compliance.” Id. 

The requirement at issue is Revenue Procedure 2014-55, 

§ 4.01(B), which was issued to provide guidance for applying Article 

XVIII(7) of the Treaty. Therefore, we must consider the essence or 

10 We have held that a taxpayer may satisfy requirements for making various 

elections through substantial, rather than strict, compliance. See, e.g., Coca-Cola Co. 

& Subs. v. Commissioner, 155 T.C. 145, 287 (2020); cf. Hawse, T.C. Memo. 2015-99,

at *22–24 (finding that the requirements of Revenue Procedure 97-37 required strict 

compliance).
16

[*16] purpose of both Revenue Procedure 2014-55 and Article XVIII(7) 

of the Treaty to determine whether the section 4.01(B) requirement can 

be satisfied by substantial compliance. 

The essence or substance of Article XVIII(7) is to help resolve

inconsistent tax treatment of individual retirement accounts and thus 

avoid double taxation that can arise where timing of U.S. tax does not 

match the timing of foreign tax credits attributable to Canadian tax. See

Treasury Technical Explanation of Protocols 1 and 2, 1987-2 C.B. at 324; 

Rev. Proc. 2014-55, § 2.01, 2014-44 I.R.B. at 753. The method allows U.S. 

taxpayers who are beneficiaries of Canadian retirement plans to make 

an election to defer tax on accrued earnings until they are distributed

(consistent with Canadian treatment), subject to rules provided by the 

IRS. Treasury Technical Explanation of Protocols 1 and 2, 1987-2 C.B. 

at 324. The purpose of Revenue Procedure 2014-55 is to provide U.S. 

taxpayers that hold interests in Canadian retirement plans with 

guidance on how to make a tax deferral election to avoid inconsistent

treatment beginning the year the taxpayer is a beneficiary of a given

plan. See Rev. Proc. 2014-55, §§ 1, 3, 4.03, 2014-44 I.R.B. at 753–55.

Consistent with the purposes stated above, we conclude that 

section 4.01(B) is merely procedural. Regardless of which interpretation 

of “each taxable year” is used, section 4.01(B) requires the taxpayer to 

file returns for tax years that are not relevant in informing the IRS 

whether income should have been reported from an RRSP account.

Therefore, substantial compliance with the requirement will suffice. 

2. Whether Mr. Dengin Substantially Complied

A taxpayer will be deemed to have substantially complied with 

IRS guidance if the requirement is procedural and the taxpayer has 

fulfilled all other essential purposes of the guidance. See Am. Air Filter 

Co., 81 T.C. at 719. Because we have found that section 4.01(B) is 

procedural, we need to determine only whether Mr. Dengin has fulfilled 

all other essential purposes of Revenue Procedure 2014-55. 

This Court has found taxpayers to have substantially complied 

with election requirements even though they failed to follow the strict 

procedures in making the election when the taxpayer has provided the 

IRS with enough information to show that they have made the election 

in substance. See Am. Air Filter Co., 81 T.C. at 720–21; Tipps v. 

Commissioner, 74 T.C. 458, 468 (1980) (holding that partnerships made 

section 167(k) elections even though they failed to provide all the 
17

[*17] information required but clearly identified the properties and 

expenditures as to which the elections were being made); Taylor, 67 T.C. 

at 1078–79 (holding that the taxpayer fulfilled the essential 

requirements of section 1251(b)(4) even though they failed to attach the 

election to their tax returns because their returns showed that they used

the accrual method of accounting).

However, in those cases, unlike the present case, the IRS required 

the taxpayer to provide some type of documentation to make the 

election. Here, the election automatically applies if the taxpayer is an 

eligible individual. Therefore, to comply with the section 4.01(B)

requirement in substance, the taxpayer must file tax returns for each 

year they are the beneficiary of the plan for which they are seeking 

deferral. The taxpayer does not have to provide information with the 

returns to alert the IRS that the election was made. Furthermore, as we 

conclude above, the filings do not have to be timely. We look to each

relevant RRSP account separately to determine whether Mr. Dengin 

substantially complied with this requirement.

a. RRSP Account 1

Mr. Dengin did not substantially comply with the section 4.01(B)

requirement for RRSP Account 1. RRSP Account 1 was opened before

2006, and Mr. Dengin failed to file a return for each year he was a 

beneficiary of that account.

b. RRSP Account 2

Mr. Dengin substantially complied with the section 4.01(B) 

requirement for RRSP Account 2. RRSP Account 2 was opened and 

closed in 2006, and Mr. Dengin filed a tax return for that year. 

c. RRSP Account 3

Mr. Dengin substantially complied with the section 4.01(B) 

requirement for RRSP Account 3. He filed a return for each year he was 

the beneficiary of the account. Furthermore, Mr. Dengin also attached 

Form 8891 with each return from 2006 to 2011, providing the name and 

number of the account, the address of the account, his name as the 

beneficiary, and the plan balance.
18

[*18] VI. Conclusion

Mr. Dengin substantially complied with Revenue Procedure

2014-55, § 4.01(B), for RRSP Accounts 2 and 3 when he filed his returns 

for 2006 through 2011. Because the Commissioner did not dispute any 

other criteria for being an eligible individual within the meaning of 

section 4.01, we will deny his Motion for Partial Summary Judgment in 

part for RRSP Accounts 2 and 3. However, because Mr. Dengin failed to 

substantially comply with section 4.01(B) for RRSP Account 1, we will

grant his Motion for Partial Summary Judgment in part for that 

account. 

To reflect the foregoing,

An appropriate order will be issued.