16 December 1999 External T.I. 9928535 - INDIANS

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.

Principal Issues:

1. Has the 1999 adverse decision by the FCTD in the Shilling case resulted in any change to the Indian Act Exemption for Employment Income Guidelines?

2. Has CCRA given a special exemption to Rachel Shilling and Indians in situations similar to hers?

Position:

1. No changes to the Guidelines.

2. No information provided.

Reasons:

1. Since the judgement in Shilling has been appealed by CCRA, no changes will be made to the Guidelines until the issues are resolved by the courts.

2. No information can be given on actions taken by CCRA in respect of Rachel Shilling and other Indians, without explicit consent of the affected taxpayer, because of the confidentiality provisions of section 241 of the Income Tax Act. CCRA applies the Income Tax Act and the Guidelines in a uniform manner.

XXXXXXXXXX 992853
S. Parnanzone
December 16 , 1999

Dear XXXXXXXXXX:

Re : Indian Act Exemption for Employment Income

We are replying to your letters of October 26 and 28, 1999, in which you ask whether the 1999 decision of the Federal Court, Trial Division in the Shilling case has resulted in any change to the Indian Act Exemption for Employment Income Guidelines and, as well, in any special tax exemption that would immediately apply specifically to Rachel Shilling and any other Indian in a situation similar to hers.

As you may be aware, the Guidelines were developed by the Canada Customs and Revenue Agency (the "Agency"), formerly the Department of National Revenue, after the decision of the Supreme Court of Canada in the Williams case (92 DTC 6320), which dealt with the approach to be used in determining whether income is situated on a reserve. The Agency has appealed the judgement in the Shilling case. Consequently, until such time as the matter is resolved by the courts, the Agency will apply the Guidelines as presently written.

With respect to your inquiry regarding any special tax exemption for Rachel Shilling and any other Indian in a situation similar to hers, we would mention that the confidentiality provisions of the Income Tax Act prevent us from disclosing a taxpayer's information to others without the explicit consent of the particular taxpayer. We would mention, however, that the Agency applies the provisions of the Income Tax Act and the Guidelines in a uniform manner. Accordingly, an individual can expect to receive similar treatment from the Agency as that accorded to other individuals in identical or substantially similar circumstances.

We trust that the forgoing comments are of assistance to you.

Yours truly,

Roberta Albert, CA
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

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