Income Tax Severed Letters - 2009-05-08


2009 Ruling 2008-0290061R3 - Partner's pro corp services to partnership

Unedited CRA Tags
125(7) 56(2) 96(1)

Principal Issues: Whether the active business income earned by a partner's professional corporation from providing professional services to a partnership of which the partner is a member would be restricted under the rules for specified partnership income or personal services business.

Position: No, as long as facts and proposed transactions carried out according to the ruling request.

Reasons: The facts and proposed transactions, as described, conform to our requirements as set out in other similar rulings.

Ministerial Correspondence

30 April 2009 Ministerial Correspondence 2009-0312161M4 - Ministerial authority

Unedited CRA Tags
150(1); 152(1); 152(4); 165(1); 169(1)

Principal Issues: Ministerial authority to make a determination on a contractual relationship

Position: A determination on a contractual relationship may be made in the course of an assessment or a reassessment

Reasons: Under the voluntary system of tax administration a taxpayer is required to compute and report tax by filing tax returns. The Minister is required to assess the returns and where necessary to verify the accuracy of the returns. The taxpayer may object to or appeal from the Minister's determination.

Technical Interpretation - External

30 April 2009 External T.I. 2008-0290311E5 - Providing Charitable Donation Receipts

Unedited CRA Tags
149.1(1) 248(30) 248(31) 248(32)

Principal Issues: Can the Orchestra issue donation receipts for (1) fixed amounts paid by persons participating in an organized trip the Orchestra made to XXXXXXXXXX (the amount is meant to cover all expenses relating to the trip); and (2) for membership dues paid towards the general operations of the Orchestra.

Position: (1) A receipt can be issued for the "eligible' amount of the gift, if any. (2) A receipt can be issued for the "eligible' amount of the gift.

Reasons: Under the proposed split-receipting rules, any benefits to the donors or to persons with whom the donor does not deal at arm's length would result in an advantage under subsection 248(32) and would reduce the amount of the eligible gift.

30 April 2009 External T.I. 2008-0296721E5 F - Late filed election 85(7) - Amending transactions

Unedited CRA Tags

Principal Issues: An individual transferred real property to his corporation for non-share consideration only. Whether the CRA would accept a late filed election under subsection 85(7) where the election would be based on a contract that would be modified after-the-fact by the taxpayer and the corporation in order to include share consideration for the transfer of the real property.

Position: No.

Reasons: CRA assesses on the basis of the legal documents and the legal rights that they create. Auditors have no choice but to assess on the facts present at the time of assessment or audit. The CRA does not have authority to amend contracts between parties. CRA's position is that it cannot agree to abide by after-the-fact changes to a contract to change the basis of an assessment without the benefit of a court order.

30 April 2009 External T.I. 2009-0312171E5 - Taxable Benefits

Unedited CRA Tags
6(4) 6(1)(a)

Principal Issues: Taxation of employer-paid premiums for life insurance.

Position: General information provided.

Reasons: Question of fact.

29 April 2009 External T.I. 2009-0311331E5 - Substituted Property - Paragraph 88(1)(c.3)

Unedited CRA Tags
88(1)(c.3) 88(1)(c.2) 88(1)(c.4)

Principal Issues: Whether proposed subparagraph 88(1)(c.3)(vii) would apply in a particular fact situation.

Position: Yes. Proposed subparagraph 88(1)(c.3)(vii) would apply on the assumption that the amendments to paragraph 88(1)(c.3), particularly the introduction of proposed subparagraph 88(1)(c.3)(vii), are reintroduced and enacted into law in substantially the same form as proposed in Bill C-10.

Reasons: Wording of the proposed amendment and previous position.

27 April 2009 External T.I. 2009-0314751E5 - Medical expense tax credit - air conditioner

Unedited CRA Tags
118.2(2)(m); R.5700(c.3)

Principal Issues: Whether an individual suffering from a mobility impairment and other health conditions including COPD (chronic obstructive pulmonary disease), insulin dependent diabetes, obesity and osteoarthritis, could claim the cost of installing a central air conditioner for the METC.

Position: Question of fact.

Reasons: The taxpayer must meet all of the conditions set out in paragraph 118.2(2)(m) of the Act and paragraph 5700(c.3) of the Regulations.

27 April 2009 External T.I. 2009-0307921E5 - Medical Digital Infrared Thermal Imaging

Unedited CRA Tags
118.2(2)(o); 118.2(2)(a)

Principal Issues: Whether Medical Digital Infrared Thermal Imaging ("DITI") qualifies as a medical expense for purposes of the METC.

Position: Question of fact.

Reasons: Medical DITI may qualify under paragraph 118.2(2)(o) or 118.2(2)(a), depending on the facts.

15 April 2009 External T.I. 2007-0221651E5 - Deduction for high-risk missions

Unedited CRA Tags

Principal Issues: Requesting clarification of previous letter 2006-021522. Is the deduction under subparagraph 110(1)(f)(v) available only to RCMP police officers, and only to those of commissioned rank?

Position: No

Reasons: The deduction is available to all members of the Canadian Forces and all police officers of the various police forces in Canada (including "peace officers" under the RCMP Act), providing they meet all the remaining criteria in that subparagraph.

9 December 2008 External T.I. 2007-0231311E5 - Employment Benefits - Vehicle

Unedited CRA Tags
6(1)(a); 6(1)(b)

Principal Issues:
Is the use of an employer-provided vehicle to travel between home and approximately XXXXXXXXXX Sites within a city by Employees considered personal in nature?

Question of fact but probably not.

It is our view that depending on the frequency of visits, the Sites would not constitute regular places of employment.

Technical Interpretation - Internal

5 May 2009 Internal T.I. 2009-0311211I7 F - Impôt payable par ailleurs en vertu de la Partie I

Unedited CRA Tags
117(1) 123.2 127(1)

Principales Questions: Est-ce que l'expression "impôt payable par ailleurs en vertu de la présente partie" contenue au paragraphe 127(1) de la Loi de l'impôt sur le revenu (La "Loi") comprend la surtaxe des sociétés prévue à l'article 123.2 de la Loi ?

Position Adoptée: Oui.

Raisons: Le paragraphe 117(1) de la Loi définit l'expression "impôt payable par ailleurs en vertu de la présente partie". Les règles de calcul de l'impôt applicables aux sociétés se retrouvent à la sous-section b de la section E de la Partie I de la Loi de l'impôt sur le revenu et celles applicables à l'ensemble des contribuables se retrouvent à la sous-section c de la section E de la Partie I.