CRA recognizes that a partnership is transparent for statute-barring purposes

CRA is entitled to reassess three years beyond the normal reassessment period where the reassessment "is made as a consequence of a transaction involving the taxpayer and a non-resident person with whom the taxpayer was not dealing at arm's length."  CRA found that this requirement was satisfied where the transaction (being assessed under s. 17) was a loan made by the taxpayer to a partnership whose non-resident partners did not deal at arm's length with it.  It cited the statement in Klein that "the partnership itself does not have the capacity to be indebted. The debt of the partnership is owed by the partners... ."

Neal Armstrong.  Summary of 5 December 2012 Memorandum 2012-0439301I7 F under s. 152(4)(b)(iii).