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 an assessment under subsection 152(7) for the 1996 to 1998 taxation years is statute-barred?
Position: No, if the taxpayer had never filed the return for those years.
Reasons: In the absence of the initial assessment for a particular taxation year, the time limitation for assessing a taxation year does not start to run. In this case, returns for the 1996 to 1998 taxation years were never assessed; consequently, the taxation years were open for assessment.
May 27, 2011
Toronto Centre Tax Services Office HEADQUARTERS
Income Tax Rulings
Attention: Roma Delonghi, Assistant Director Lindsay Frank
Taxpayer Services and Debt (613) 948-2227
The Operation of the Normal Reassessment Period
This is in reply to a request from Colin Knight for an interpretation regarding the operation of the normal reassessment period. The facts of the case presented involve a taxpayer who was originally assessed in 2010 under subsection 152(7) of the Income Tax Act (the "Act") in respect of the taxation years in the 1990's. At issue is whether such assessments were statute-barred.
Subsection 152(4) of the Act permits the Minister to raise an assessment at any time. Generally, however, a reassessment can only be raised within the normal reassessment period. The exceptions to this general rule are provided in paragraphs 152(4), (a), (b), and (c).
The normal reassessment period is defined in subsection 152(3.1). For a mutual fund trust or a public corporation, it is the period that ends within 4 years after the issuance of the initial assessment of a particular taxation year; for other taxpayers, it is three years. However, until an original notice of assessment has been issued for that year, the period does not start.
The Minister may assess a taxpayer under subsection 152(7) for a particular taxation year when a return for that year has not been filed. The time limitation for assessing that year has yet to start given that it only commences with the initial assessment. In the above case, the assessments were not barred. It is not necessary to refer to the rules that extend the reassessment period, because they are not applicable to an original assessment.
Should you have any questions or require additional information, please do not hesitate to contact Lindsay Frank at the number provided above.
International and Trusts Division
Income Tax Rulings Directorate
c.c. Colin Knight
Taxpayer Services and Debt Management Division
Toronto Centre Tax Services Office
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