Income Tax Severed Letters - 2009-05-29


2009 Ruling 2008-0290331R3 - Underground exploration program - CEE

Unedited CRA Tags

Principal Issues: Whether expenses relating to a proposed underground exploration program will qualify as Canadian exploration expenses under paragraph (f) of the CEE definition.

Position: Yes

Reasons: Based on the facts presented and a written opinion received from Natural Resources Canada.

2009 Ruling 2009-0319331R3 - Supplemental Ruling

Unedited CRA Tags

Principal Issues: Changes to Ruling 2007-024945

Position: Ruling modified

Reasons: Changes do not affect validity of rulings given

Technical Interpretation - External

22 May 2009 External T.I. 2009-0311241E5 F - Compensation reçue pour harcèlement psychologique

Unedited CRA Tags
56(1)a)(ii) 248(1)

Principales Questions: Est-ce qu'une compensation reçue par un employé dans le cadre d'une plainte pour harcèlement psychologique contre son employeur est imposable? Le cas échéant, est-ce que le montant doit faire l'objet de retenues à la source?

Position Adoptée: Si le particulier a été victime de harcèlement pendant qu'il occupait son emploi et que la compensation reçue à l'égard de ce préjudice n'a aucun rapport avec la perte de l'emploi, l'Agence du revenu du Canada sera généralement d'avis que le montant de la compensation n'est pas imposable.

Raisons: Position émise au paragraphe 12 du bulletin d'interprétation IT-337R4.

21 May 2009 External T.I. 2009-0313341E5 - Deduction for Moving Expenses

Unedited CRA Tags
62 248(1) "eligible relocation"

Principal Issues: How should a taxpayer and the taxpayer's spouse or common-law partner claim the deduction for moving expenses where each has an eligible relocation in respect of the same move?

Position: General comments provided.

Reasons: Question of fact.

19 May 2009 External T.I. 2009-0319341E5 - Stem cell therapy not available in Canada

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

Principal Issues: Will the cost of stem cell therapy not available in Canada qualify for the METC.

Position: Question of fact, but likely yes.

Reasons: Amounts paid to a medical practitioner or a licensed private hospital qualify as a medical expense under paragraph 118.2(2)(a) of the Act. Also, transportation expenses to travel not less than 40 km to obtain medical services qualify under paragraph 118.2(2)(g) of the Act and other travel expenses qualify under paragraph 118.2(2)(h) of the Act if the individual travels not less than 80 km to obtain medical services and it is reasonable for the individual to have done so, the route taken was reasonably direct and substantially equivalent medical services were not available in the individual's locality.


20 May 2009 Roundtable, 2009-0322511M6 - Assignment of a T2 Refund

Unedited CRA Tags
159(2), 220(6) & (7) ITA

Principal Issues: Whether a U.S. resident corporation can assign its anticipated large T2 refund. XXXXXXXXXX .

Position: A refund may be assigned at the discretion of the Minister, but, in this case, it is unlikely to

Reasons: The size of the refund XXXXXXXXXX may warrant an in-depth review prior to the issuance of the refund which would entail delay. An option to overcome XXXXXXXXXX delay concerns would be to issue the refund to the corporation's legal counsel under an escrow agreement pending the issuance of a clearance certificate.

Technical Interpretation - Internal

19 May 2009 Internal T.I. 2009-0313311I7 - Part I.3 - Central Banking Arrangement

Unedited CRA Tags
181(3 181.2

Principal Issues: Whether cash transfers, made within a corporate group subject to a Central Banking Arrangement, satisfy the criteria for offset presentation under GAAP, and as such, should be reflected in a balance sheet pursuant to subsection 181(3) of the Act.

Position: Whether transactions are required to be reflected in financial statements presented in accordance with GAAP remains a question of fact. However, where cash transfers are reflected in a balance sheet presented in accordance with GAAP, the net amount resulting from the operation of the Central Banking Arrangement will represent the carrying value of that item for Part I.3 purposes.

Reasons: The netting of assets and liabilities is generally permissible in situations where there exists a legal right of offset, and where the relevant parties intend to act upon that right.

12 May 2009 Internal T.I. 2009-0320991I7 - Directors' Liability

Unedited CRA Tags
227.1 ITA; 242(1)(c)

Principal Issues: Liability of directors where a corporation has been involuntarily dissolved for over two (2) years.

Position: The directors may be assessed provided the corporation is revived and the directors are reinstated as if they had never ceased to hold office.

Reasons: Subsection 227.1(4) provides that directors cannot be assessed more than two (2) years after they ceased to hold office. Based on the jurisprudence in two (2) jurisdictions, directors cease to hold office once a corporation is dissolved and revival of the corporation does not reinstate the directors unless it is so provided in the Revival Order.