Income Tax Severed Letters - 2016-08-17

Ministerial Correspondence

20 July 2016 Ministerial Correspondence 2016-0646001M4 - Tax relief for the cost of organic food

Principal Issues: Whether there is tax relief to compensate for the added costs of organic foods and natural products.

Position: There are no specific provisions in the Income Tax Act for organic foods and natural products; however, there are other current tax measures to assist individuals.

Reasons: See below.

4 July 2016 Ministerial Correspondence 2016-0647181M4 - Service Animals and the METC

CRA Tags
118.2(2)(l)

Principal Issues: Does the cost of a service dog for people with Post-Traumatic Stress Disorder (PTSD) qualify as an eligible medical expense?

Position: Only if the conditions in paragraph 118.2(2)(l) of the Act are met.

Reasons: Legislation

Technical Interpretation - External

14 June 2016 External T.I. 2016-0647951E5 - Exempt Foreign Trust

Summary Under
Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Exempt Foreign Trust - Paragraph (d)
exempt foreign charitable trust must satisfy the Canadian common law tests

Principal Issues: General comments requested on the application of subparagraph (d)(ii) of the definition of “exempt foreign trust” in subsection 94(1).

Position: General comments provided on the meaning of the expressions “charitable purposes” and “created exclusively for charitable purposes” used in subparagraph (d)(ii) of the definition of “exempt foreign trust” in subsection 94(1).

Reasons: Based on our interpretation of the terms and consistent with our interpretation of the Canadian Court decisions in that matter.

Conference

26 May 2016 Alberta CPA Roundtable, 2016-0645001C6 - Failure to file Form T1135

CRA Tags
152(4), 152(3.1), 162(7), 220(3.1), 233.3
Summary Under
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(a) - Subparagraph 152(4)(a)(i)
onus to establish carelessness or neglect where failure to file a T1135
Summary Under
Tax Topics - Income Tax Act - Section 162 - Subsection 162(7)
failure to file a T1135 may not indicate carelessness or neglect

Principal Issues: Can the CRA assess a penalty against a taxpayer beyond the normal reassessment period for failure to file a Form T1135 on time? Can subparagraph 152(4)(a)(i) of the Act apply to assess a penalty under subsection 162(7) of the Act beyond the normal reassessment period?

Position: General comments provided.

Reasons: A penalty under subsection 162(7) of the Act is assessed under Part I and is subject to the same limitations as any other assessment under that Part. Whether a penalty under subsection 162(7) of the Act may be assessed in a given situation pursuant to subparagraph 152(4)(a)(i) of the Act is a question of fact that must be determined on a case-by-case basis.

26 May 2016 Alberta CPA Roundtable Q. 16, 2016-0645021C6 - Medical expense tax credit

CRA Tags
118.2

Principal Issues: Are amounts paid for modifications to a Segway, bicycle or tricycle eligible medical expenses?

Position: It depends on the facts.

Reasons: To the extent that the amounts paid for these modifications are for devices that are exclusively designed to allow a person with a mobility impairment to operate a Segway, tricycle or bicycle they would be eligible under paragraph 5700(n) of the Act, providing the requirements under 118.2(2)(m) have also been satisfied.