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: Ruling request on a proposed arrangement.
Position: File closed. No ruling issued.
Reasons: Requested information has not been received. A draft ruling was sent to the taxpayer for the sole purpose of verifying that the facts and proposed transactions were correctly stated. It has come to our attention that the draft ruling has been used as a marketing tool. From our perspective this course of action is unacceptable.
XXXXXXXXXX 2006-020332
XXXXXXXXXX, 2007
Dear XXXXXXXXXX:
Re: Advance Income Tax Ruling Request
XXXXXXXXXX
As discussed, we are closing our file with respect to your request for an advance income tax ruling dated XXXXXXXXXX. We want to re-iterate that the draft ruling sent to you on XXXXXXXXXX was sent for the sole purpose of verifying that the facts and proposed transactions were correctly stated. At the time the draft ruling was sent, we understood that you would be providing us with the additional information that we requested and that the transactions would be implemented within a few days provided a favourable ruling was issued.
The requested information has still not been received and the proposed transactions have not yet been implemented. However, the draft ruling has and is being used as a marketing tool. Had we known this, the draft ruling would not have been released. From our perspective this course of action is totally unacceptable. We do not issue draft rulings for circulation.
Your client should cease to make reference to a draft ruling in any of its correspondence as at present there is no binding ruling issued by the Canada Revenue Agency in respect of the proposed transactions. To suggest otherwise would be providing a claim that is unfounded.
As discussed, if your client is interested in pursuing a ruling with respect to the proposed transactions, a new request for a ruling will have to be submitted. Work on this request will not commence until we have been provided with all of the relevant information, including the identity of all parties and all agreements.
It should come as no surprise that if your client chooses to pursue another ruling request, a draft of the ruling will not be issued in connection therewith notwithstanding our usual practice in this regard.
An invoice for the time spent considering this ruling request will be forwarded to you under separate cover.
Yours truly,
XXXXXXXXXX
Manager
Charitable and Financial Institution Sectors
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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