Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Did Bill C-48 amend subsection 152(4.2) to permit the CRA to reassess a corporate taxpayer's statute-barred year?
Position: No.
Reasons: Bill C-48 provided that subsection 152(4.2) could be read to allow a statute-barred year to be reassessed to the extent that the reassessment concerns the application of a provision included in Part V of the Bill. That was not the case in this situation.
October 15, 2013
Randy Albertini HEADQUARTERS
Accounts Receivable, Tax Programs Income Tax Rulings
TSDMB - Headquarters Directorate
395 Terminal Ave, 6th Floor Katharine Skulski
Ottawa, ON K1A 0L5 (613) 957-8585
2013-050109
Amendment to subsection 152(4.2) and statute barred T2 returns
We are replying to the email we received from Lori Craig on August 14, 2013, forwarding your enquiry regarding a request by a corporate taxpayer to amend a statute-barred year using subsection 152(4.2) of the Income Tax Act (the "Act").
You have explained that the CRA issued an arbitrary assessment under subsection 152(7) of the Act against the corporate taxpayer that had failed to file a return of income. After the normal reassessment period had expired, the taxpayer attempted to file a T2 return. The taxpayer's representative contends that Bill C-48, Technical Amendments Act, 2012 ("Bill C-48"), which received Royal Assent on June 26, 2013, amended subsection 152(4.2) to allow the CRA to reassess the taxpayer beyond the normal reassessment period.
Bill C-48 did not amend subsection 152(4.2) of the Act. Section 367 of Bill C-48 was an application provision that allowed subsection 152(4.2) to be read to allow the CRA to reassess a taxpayer beyond the normal reassessment period, but only to the extent that the reassessment concerns the application of a provision included in Part V of Bill C-48, "Other Amendments to the Income Tax Act and Related Legislation", none of which are applicable to the taxpayer's situation.
Given that, Bill C-48 did not modify subsection 152(4.2) as it applies to the taxpayer's statute-barred taxation year, we agree with you that it cannot be used to reassess the statute-barred year.
We trust that these comments will be of assistance.
Yours truly,
Terry Young, CPA, CA
Manager, Administrative Law Section
International Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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