18 June 2010 Internal T.I. 2010-0359111I7 - Requirement to issue T1204 Slip

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: Whether federal bodies are required to issue T1204 slips to non-public servants who are not compensated for their services, such as volunteers and job applicants, but receive a reimbursement for their expenses.

Position: No.

Reasons: Recipient is not a "Payee" for purposes of Regulation 237 such that there is no requirement to issue a T1204.

XXXXXXXXXX 			2010-035911
				Renee Sigouin
				(613) 957-2128
June 18, 2010

Dear XXXXXXXXXX :

Re: Requirement to issue T1204 Slip

We are writing in response to your letter of March 3, 2010, wherein you asked for our comments on the requirement to issue a T1204, "Government Service Contract Payment" information slip ("T1204") in a particular situation. Specifically, you have asked whether XXXXXXXXXX (the "Federal Agency") is required to issue a T1204 slip to individuals performing volunteer services for the Federal Agency (such as volunteer advisory committee members) and job applicants, who receive reimbursement for their travel expenses but are not remunerated in respect of any services provided. We have contacted you on various occasions to request additional information concerning your enquiry and have not received a reply. We are therefore providing our general comments in respect of your enquiry.

Paragraph 153(1)(g) of the Income Tax Act (the "Act") imposes a withholding and reporting requirement on every person paying at any time in a taxation year fees, commissions or other amounts for services. Where paragraph 153(1)(g) applies, subsection 200(1) of the Income Tax Regulations (the "Regulations") requires the person making such a payment to issue an information return in prescribed form (i.e., Form T4A) in respect of the payment unless an information return in respect of the payment has been made under sections 202, 214, 237 or 238.

Subsection 237(2) of the Regulations requires a "federal body", such as a federal government department, agency or Crown corporation, that pays or credits an amount (that would have generally been subject to reporting under the above-noted subsection 200(1) of the Regulations) to a "payee" to report the amount on Form T1204 instead of Form T4A. For purposes of subsection 237(2) of the Regulations, a "payee" means a person or partnership to whom an amount is paid or credited in respect of services rendered, by or on behalf of the person or the partnership.

Whether an amount paid is in respect of a contract for services is a question of fact that can only be determined by reviewing the facts in the particular circumstances. However, where an individual receives no remuneration for services provided and is simply being reimbursed or paid an allowance for actual and reasonable out of pocket travel expenses, it is our view that the federal body making such a payment would not be required to file an information return with respect thereto. It is our view that this would also be the case where, in addition to the reimbursement of expenses, the individual received a nominal stipend or honorarium, as long as the individual did not regularly provide services or advice to federal bodies or other persons for compensation as part of an ongoing business.

We trust that these comments will be of assistance.

Yours truly,

Renée Shields
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch