For most income, the taxes paid to CRA offset anything that might be due to the IRS. That’s why most US citizens living in Canada owe nothing when they file their US taxes. But interest income earned in RRSPs is tax-deferred in Canada, leaving many expats wondering how to report it to the IRS.
Jack Townsend has posted some information on how to properly report RRSP income to the IRS. The good news is that there seems to be a way to defer taxation on RRSP income.
The bad news is that the IRS is still unsure as to whether it will count RRSPs as part of total assets when claiming penalties for failure to file.