9 February 1993 Income Tax Severed Letter 9208924 - Fairness Package

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

XXXXXXXXXX

February 9, 1993

Dear XXXXXXXXXX

I am writing in response to your letter of March 2, 1992,
addressed to Mr. Remi McCoy, Departmental Assistant to the
Honourable Otto Jelinek, Minister of National Revenue,
regarding the time limit for filing a designation under the
provisions of paragraph 88(1)(d) of the Income Tax Act
(Canada) (the "Act"). I apologize for the delay in
responding.

In your letter you expressed the opinion that there
should not be any time limit for filing a designation under
paragraph 88(1)(d) of the Act. Your view is based on certain
administrative concessions which appear to be available with
respect to filing amended returns, apparent inconsistencies in
the Act itself and the recently enacted Fairness Package. In
the event that the Department believes that a time limit
exists for filing a designation under paragraph 88(1)(d), you
have recommended that consideration be given to including
designations, such as those under paragraph 88(1)(d) of the
Act, in the Fairness package.
While I can appreciate your position concerning apparent
inconsistencies in the legislation, the Department is
responsible for administering the legislation as enacted by
Parliament. The provisions of paragraph 88(1)(d) of the Act
clearly provide that a designation must be filed in the
taxpayer's return of income for the year in which the
subsidiary is wound up. The Courts have held that these words
are clear and unambiguous and require that the designation
must be made in the original return of income which is filed
by the taxpayer.

You have proposed that the Fairness legislation be
expanded to include late filed designations pursuant to
paragraph 88(1)(d) in certain circumstances. As you are aware
presently the legislation provides only for certain late filed
elections and it would require a change in the law to cover
designations.

I wish to thank you for bringing your concerns to my
attention and I will communicate your views to the Department
of Finance as this is a tax policy issue.

Yours sincerely,
R.M. Beith
Senior Advisor to the
Deputy Minister