9 January 1990 Income Tax Severed Letter ACC89896 - Form T691 - Calculation of Minimum Tax

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.

Assessing & Enquiries                        Technical
Directorate                                    Interpretations
J.M. Legault                                   Division
Director - Returns Processing                G.D. Middleton
  Division                                    957-9230

Nancy Kelly

Subject: Form T691 - Calculation of Minimum Tax

In accordance with your request of October 25, 1989, we have reviewed the above-mention form and confirm our draft comments sent to you on November 28, 1989.

Our comments are summarized in the attached appendix and are based on the provisions of the Income Tax Act as amended by Bill C-28 and Bill C-52 (first reading, December 13, 1989). Unless otherwise indicated, the references to sections, subsections, etc., are of the Income Tax Act (the "Act"). We are also enclosing a mock-up copy of form T691 which contains other handwritten comments which you may wish to consider.

This form is not a form prescribed by the Income Tax Act or Income Tax Regulations and there is no indication on the form that it is "authorized by the Minister". Accordingly, the taxpayer is not obliged to use this form. If you want taxpayers to complete this form, the form should indicate that it is authorized by the Minister. There is no reference to the Privacy Act or Personal Information Bank on the form.

If you have any questions, please contact us.

Richard Buetow Acting Director Technical Interpretations Division Legislative and Intergovernmental Affairs Branch

Re:  Form T691                               Appendix

1. In the comments for the line 28 Explanatory Note, change the year "1988" to "1989" throughout.

2. With respect to line 56, the instruction should be reworded for clarity to ensure that the correct amount is calculated.

49.5% x Basic Federal Tax (line 55) x Income not earned in a Province / Total Net income =

Similarly, with respect to line 76, reword the calculation as follows:

"49.5% x Basic Federal Tax (line 74) x Income not earned in a Province / Total Net Income = *

*Where an allocation of minimum tax is required, insert the amount entitled "Federal Surtax" at line 1 of Part II of Form T691A.

3. Area (A) at the top of page 2 is intended to cover the legislation in paragraph 127.52(1)(a) of the Act. As a result of the proposed amendments for pension reform, as contained in Bill C-52, it is our view that a detailed explanatory note should be provided for line 1 to ensure that the correct amount is entered on that line.