11 October 1994 External T.I. 9410675 - NISA

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.

NISA Administration
P. O. Box 6100
Winnipeg, Manitoba	941067
R3C 3A4		A. M. Brake

Attention: Mitch Davies

October 11, 1994

Dear Sirs:

Re: Western Grain Stabilization Account ("WGSA")

This is in reply to your letter of April 18, 1994, concerning a situation where in 1989 funds were incorrectly overpaid to a producer from WGSA. The overpayment was recovered in 1993 by reducing the amount otherwise payable from the Net Income Stabilization Account ("NISA") and paying only the net amount from the producer's NISA Fund 2. By this we assume that, for example, the overpayment was $500 and the 1993 payment was to have been $1200 but was reduced to $700.

The amount in question was paid, incorrectly or otherwise, in 1989 and was taxable in that year 1989 under paragraph 12(1)(p) of the Income Tax Act (the "Act") and presumably was reported as income by the producer in the 1989 year. Subsection 12(10.2) of the Act requires that payments made in a year be included in income in the year of payment and, therefore, that paragraph would serve to tax only $700 in 1993. Hence, 1989 will stand as reported and the 1993 information slip should reflect only the net amount paid.

We trust that you will find our comments helpful and apologize for the delay in making our reply.

Yours truly,

R. Albert
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch