22 May 1992 Income Tax Severed Letter 9214997 - Old at-risk rules — administrative position — Signum case

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. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

SUBJECT: OLD AT-RISK ADMIN. POSITION - SIGNUM CASE SECTION: 96(1)]

DRAFT
1992 VANCOUVER DISTRICT OFFICE ROUNDTABLE

QUESTION

Can Revenue Canada confirm that it will no longer apply its at-risk rules as they stood prior to the introduction of the statutory at-risk rules at subsections 96(2.1) to (2.7) given the Federal Court of Appeal's decision in The Queen v. Signum Communications Inc., [[1991] 2 C.T.C. 31] 91 DTC 5360?

RESPONSE

The Federal Court of Appeal ruled in the Signum case that losses from limited partnerships are to be treated on the same basis as those originating from general partnerships in the absence of statutory provisions to the contrary. Consequently, we confirm that Revenue Canada will not apply its administrative at-risk rules as they stood prior to the statutory at-risk rules.

Prepared by: John Chan
ISSUE SHEET

John Chan
7-921499
May 22, 1992

Administrative At-Risk Position After 1991 FCA Decision in Signum

On May 10, 1991. the Federal Court of Appeal ruled in the Signum case that losses from limited partnerships are to be treated on the same basis as those originating from general partnerships in the absence of statutory provisions to the contrary.

This led to Appeal's Decision # 89-9R dated July 9, 1991 which stated that the FCA's decision was final and binding and that any outstanding objections or appeals held in abeyance pending the outcome of this appeal must be processed. The Decision was issued by Mr. J.C. Boucher of Head Office Appeals.

I discussed the Roundtable question with Mr Boucher and he said that the question can be answered in the affirmative. He said that he has confirmed in both internal and external phone enquiries that the Department has abandoned the previous administrative at-risk position. Also, District Office Appeals have now processed their outstanding cases on the basis of the Department's loss in Signum.