29 November 2011 Roundtable, 2011-0426291C6 - Income Tax Folio Initiative Update

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: The CTF requested an update regarding which Interpretation Bulletins had been identified as priorities for update.

Canadian Tax Foundation
National Conference 2011
November 27 – 29, 2011
ROUNDTABLE QUESTION # 13

Q.13. Status of review of Interpretation Bulletins

The CRA has recently undertaken a consultation with taxpayers and their advisors in order to prioritize the update of interpretation bulletins. Could the CRA indicate which interpretation bulletins have been identified as being a priority to update in the short and medium term?

A.13. Status of review of Interpretation Bulletins

Being able to consult an authoritative source of technical tax information and the CRA's interpretation of the legislation it administers is of unquestionable benefit to taxpayers, their advisors and CRA staff. In recognition of this, the Income Tax Rulings Directorate has undertaken to review and improve the income tax technical publications product.

There are two main aspects to this initiative: format and content

Format
From a format perspective, several improvements will be made. Related information will be consolidated into more comprehensive publications. Furthermore, as an exclusively electronic publication, the resulting product will capitalize on the advantages offered by the internet, such as by including links to statutory references, jurisprudence and related publications. In light of this significant make-over, the product will be re-branded. Each updated technical income tax publication will be known as an "Income Tax Folio". Each Folio will be published on an "as completed basis." At the same time, the Bulletin or Bulletins that a Folio replaces will be cancelled.

Content
Accuracy of published tax information is obviously a priority. Although much of the information contained in the 272 active Interpretation Bulletins is out of date, it is impossible to update 272 Bulletins all at once. The process is expected to take a number of years. Necessity and practicality suggest that the initial focus be on the topics that are the most important to our various stakeholders. To make this determination, a number of indicators were considered. We checked the number of hits each Bulletin received over the past several years on the CRA website. We also gathered similar data from the various commercial tax publishers. Officials at numerous areas within the CRA as well as members of tax professionals' organizations in the private sector were consulted. All of this feedback and data permitted the identification of Bulletins to be reviewed and updated in the first several phases.

Among the publications that emerged as the most in demand were those related to:

• the medical expense tax credit,
• education and tuition tax credits, along with scholarships and bursaries,
• interest deductibility,
• foreign exchange gains and losses,
• legal and accounting fees,
• health and welfare trusts,
• determining residency,
• residence of a trust,
• employee stock options and
• damages & settlements.

Among the publications that were identified as being in the next level of priority were those related to:

• principal residence,
• eligible capital expenditures
• foreign tax credit
• CCA
• losses of a corporation,
• meaning of the term "corporation",
• support payments,
• retiring allowances and
• amalgamation of Canadian corporations

This initiative is a challenging one on many levels. But with the planned enhancements and a revised process for updating technical content, we are confident that the effort is well worth it. Income Tax Folios will be a valuable resource for years to come.

Renée Shields
2011-042629