Income Tax Severed Letters - 2025-03-12

Technical Interpretation - External

31 October 2024 External T.I. 2024-1038061E5 F - Dedicated Carbon Storage

Unedited CRA Tags
Definition of dedicated carbon storage in s. 127.44(1)
Summary Under
Tax Topics - Income Tax Act - Section 127.44 - Subsection 127.44(1) - Dedicated Geological Storage
an underground rock deposit used for carbon capture can qualify for refundable tax credit purposes
Words and Phrases
geological formation

Principales Questions: Can carbon be stored in an underground mineral formation?

Position Adoptée: Yes.

Raisons: Accepted industry meaning of the term "geological formation" and legislative purpose.

Technical Interpretation - Internal

8 January 2025 Internal T.I. 2024-1032871I7 - Payee for purposes of paragraph 153(1)

Unedited CRA Tags
56(1)(a), (x) to (z), 56(2), 153(1), 153(1)(q), Regulations 100, 102 and 200

Principal Issues: Application of subsection 153(1) to the payment of an amount as a distribution out of or under a RCA that can reasonably be considered to have been received, in respect of an office or employment of the Taxpayer, by a Former spouse of the taxpayer, pursuant to the terms of a court order or a separation agreement.

Position: The Former spouse is the “payee” for purposes of subsection 153(1) and the “employee” for purposes of Part I of the Regulations in respect of the RCA Payment. Thus, for purposes of determining the amount to be withheld, the “employee” is the Former spouse, and any such amount withheld from the RCA Payment is to be remitted on account of the income tax of the Former spouse for the year. Under subsection 200(1) of the Regulations, a T4A-RCA Form is to be issued to the Former spouse in respect of the RCA Payment.

Reasons: Prior positions, wording of the Act and Regulations.

30 December 2024 Internal T.I. 2024-1031721I7 F - Notion de déclarant et statut d’Indien

Unedited CRA Tags
2(2); 81(1); 162(7); 162(10), (10.1); 233.3; 233.4; 87 of the Indian Act
Summary Under
Tax Topics - Income Tax Act - Section 233.3 - Subsection 233.3(1) - Specified Canadian Entity - Paragraph (a) - Subparagraph (a)(iii)
exemption of income under the Indian Act does not render the individual as exempt from Part I tax, so that T1135/ T1134 reporting is required
Summary Under
Tax Topics - Other Legislation/Constitution - Federal - Indian Act - Section 87
individuals whose income is exempted under the Indian Act nonetheless are subject to the general T1135 and T1134 reporting obligations
Summary Under
Tax Topics - Income Tax Act - Section 231.4 - Subsection 231.4(1)
Indians whose income happens to be exempted under the Indian Act nonetheless are subject to the general T1135 and T1134 reporting obligations

Principales Questions: Can an Indian, as defined under the Indian Act, whose income is fully exempt from tax under paragraph 81(1)(a), constitute a "reporting entity" for purposes of sections 233.3 and 233.4? If so, could such taxpayer be subject to penalties in case of failure to comply with such sections?

Position Adoptée: Yes. Yes.

Raisons: Wording of the Act and prior positions.

30 December 2024 Internal T.I. 2024-1032121I7 F - Pénalité pour omissions répétées

Unedited CRA Tags
163(1)
Summary Under
Tax Topics - Income Tax Act - Section 163 - Subsection 163(1)
per Whissell, where simultaneously filed returns for sequential taxation years, each return can be penalized for income omitted from the preceding (but simultaneously filed) return

Principales Questions: Whether the position enunciated in document 2005-0133411I7 reflects CRA's current position.

Position Adoptée: No.

Raisons: Wording of the Act and jurisprudence.