Income Tax Severed Letters - 2012-10-03

Technical Interpretation - External

10 September 2012 External T.I. 2012-0449821E5 - Eligible dividend designation

CRA Tags

Principal Issues: Whether our position expressed in document 2006-0217891Z0 related to the designation of eligible dividends paid by a public corporation would still apply to the designation of a portion of a dividend.

Position: Yes.

10 September 2012 External T.I. 2012-0457171E5 - Guard Dog Expenses

CRA Tags
18(1)(a), 18(1)(h), 9(1), 67

Principal Issues: Whether guard dog expenses are deductible?

Position: Question of fact.

Reasons: General comments provided.

5 September 2012 External T.I. 2012-0445451E5 - Electronic filing by commercial tax preparer

CRA Tags
162(7.2), 162(7.3), 162(1), 150.1, 150(1)

Principal Issues: 1. Is a paper return, filed by a tax preparer, still considered a validly-filed return for the purposes of the taxpayer?
2. Would a subsection 162(7.3) penalty apply in various scenarios involving a tax preparer that prepares a return for consideration, but for some reason, the taxpayer decides to file that prepared return or a different return in paper format?
3. Could an unfiled return result in the imposition of penalties pursuant to 162(7.2)?

Position: 1. Yes.
2. Yes
3. No.

Reasons: 1. Taxpayers are required to file a return of income in prescribed form which includes electronic and paper filing. For the purposes of subsections 150(1) and 162(1), a return filed using either of these methods is acceptable.
2. Subsection 150.1(2.3) states that the tax preparer must file “any return of income prepared by the tax preparer” electronically. Therefore the tax preparer could be liable to the subsection 162(7.3) penalty where the return is submitted in paper format.
3. It is our opinion that a subsection 162(7.2) penalty only applies in respect of tax returns that are, in fact, filed. In other words, in order for a subsection 162(7.2) penalty to apply, a tax return would have to be submitted in a method other than by way of electronic filing. The taxpayer may still be subject to late filing penalties pursuant to subsection 162(1).

21 August 2012 External T.I. 2012-0458851E5 - Request for Comments - Corporate Structure

Principal Issues: The taxpayer has described various scenarios and is requesting our comments in what appears to be tax planning.

Position: No comments provided as we do not offer tax planning advice.

Reasons: IC 70-6R5

31 July 2012 External T.I. 2012-0442381E5 - Motor Vehicle Expenses

CRA Tags
8(1)(h.1)(iii), 6(1)(b)

Principal Issues: Whether an employee is entitled to deduct motor vehicle expenses on a per kilometre basis?

Position: No.

Reasons: The CRA does not allow an employee to deduct motor vehicle expenses on a per kilometre basis.

Technical Interpretation - Internal

17 July 2012 Internal T.I. 2012-0454701I7 F - Arrière-arrière-grand-père

CRA Tags
110.6(1), 110.6(1.3), 70(10), 252(2)
parent in s. 110.6 context includes great-grandparent but not great-great-grandparent
Words and Phrases

Principal Issues: 1) Est-ce que la mention de "père" aux paragraphes 110.6(1) et 110.6(1.3) peut s'entendre d'un arrière-arrière-grand-père? 2) Est-ce que le contribuable se qualifie pour la déduction pour gains en capital relativement aux biens agricoles admissibles?

Raisons: 1) Ceci irait à l'encontre de l'intention du législateur et la Loi se limite à un arrière-grand-père d'un contribuable; 2) Le contribuable ne rencontre pas les exigences prévues aux paragraphes 110.6(1) et 110.6(1.3).