26 October 2010 Internal Memo 2010-0378981A11 - Scope of "taxpayer" in subsection 169(3)

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.

Principal Issues: Whether the word "taxpayer" includes persons who are not a party to the court action

Position: "Taxpayer" is limited to persons who are a party to the action.

Reasons: The purpose and wording of the subsection.

October 26, 2010

Appeals Branch					HEADQUARTERS
							Income Tax Rulings
Attention: Milled Azzi, Director		  Directorate
Charities, Reorganizations,			Richard Aronoff
Resources and Projects Division		(613) 941-7239

							2010-037898

Scope of "taxpayer" in subsection 169(3)

This is in response to your memorandum of April 12, 2007, which you sent to the Legislative Policy Directorate and which was recently referred to us for reply. Your query concerns the scope of the word "taxpayer" as contained in subsection 169(3). Specifically, you inquire as to whether the word "taxpayer" is limited to the appellant or whether it is broad enough to allow the Minister to reassess other taxpayers, who are not a party to the appeal. Allowing the Minister to reassess other taxpayers who are not a party to the appeal would be for the purpose of disposing of the appeal of the taxpayer, who is a party to the court action.

Pursuant to subsection 152(1) the Minister is required, with all due dispatch, to examine a taxpayer's return of income for a taxation year and assess the tax. Subsection 152(4) provides that the Minister may make an assessment, reassessment, or additional assessment of tax for a taxation year, including interest and penalties, provided it is made within the normal reassessment period as defined in subsection 152(3.1), unless this period is extended pursuant to paragraphs 152(4)(a) or (b).

Section 169 deals with the ability of taxpayers to appeal their assessments to the Tax Court of Canada. To appeal an assessment the taxpayer must meet the requirements set forth in this section. Since an appeal of an assessment takes time and resources, subsection 169(3) allows the Minister to reassess tax, interest, penalties as well as other amounts payable beyond the period otherwise allowed in section 152, where both the appellant and Minister consent in writing.

Subsection 169(3) contains the words "the taxpayer" and not "a taxpayer" indicating that this provision is limited to the taxpayer, who is a party to the action. The objective of this provision is to facilitate the disposal of an appeal. At issue is the question of whether that objective could be extended to the reassessment of taxpayers beyond the normal reassessment period, where those taxpayers are not party to an appeal. Neither the wording nor the stated objective of subsection 169(3) lend support to such an interpretation; and there is no evidence to suggest that Parliament intended otherwise.

Hopefully, these comments will provide you with the clarification that you were seeking. Should you have any questions or require additional information, please do not hesitate to telephone Richard Aronoff at the number provided above.

B.J. Skulski
Manager
Insolvency and Administrative Law Section
Income Tax Rulings Directorate

c.c. Cornelis Rystenbil
Senior Policy Analyst
Legislative Policy Directorate