2015-0583081I7 Refund Request - Normal Reassessment Period

Principal Issues: 1.Where a valid waiver is provided for a particular taxation year, whether a refund may be issued if the request is made beyond the date required by paragraph 164(1)(b) of the Act. 2. Would the answer change if there is a valid waiver for the same issues the refund request is based on?

Position: 1.No.

Reasons: 1. Paragraph 164(1)(b) of the Act does not provide for a refund beyond the period within which the Minister would be allowed under subsection 152(4) to assess tax payable, regardless of whether a waiver was filed for the taxation year. The application for the refund must be made within the time frames provided by 164(1)(b). Furthermore, a waiver does not extend the time frame to request a refund. 2. Where the details of the waiver also provide for a refund as a reasonable outcome of the audit, the refund request may be considered to have been made as part of the waiver and the Minister may issue the refund.

Author: Godson, Gillian
Section: 152(4), 152(3.1), 164(1)

                                                                                           June 15, 2015

      International and Large Business Directorate              HEADQUARTERS
      Large Business and Program Integration                     Income Tax Rulings
                                                                                                 Directorate
     Attention:  Leslie Bafia                                                  G. Godson

                                                                                            2015-058308

      Refund Request - Waiver

We are writing in reply to your email of April 23, 2015, requesting clarification of our views made in document 2012-0468081I7. The issue in our document was whether a refund may be made where the application for the refund was not made prior to the statute-barred date; however a valid waiver identifying specific issues was filed with the Minister within the normal reassessment period.

Our comments

In our document we provided the view that where a refund request is based on issues that are covered by a valid waiver, a refund may be issued notwithstanding that the refund request may have been made after the required time frame provided by paragraph 164(1)(b) of the Income Tax Act (the “Act”).

To clarify, it is clear from the provisions of paragraph 164(1)(b) of the Act that a waiver does not extend the period within which a taxpayer may request a refund. Nevertheless, where the facts of the case indicate it is reasonable to conclude the waiver also contains an implicit request for a refund for the particular issue outlined in the waiver, the waiver may also be accepted as a request for a refund for the purposes of this paragraph. The waiver should provide sufficient information to support this conclusion.

Furthermore, it is our view where a waiver does not identify the specific issue in dispute, and/or the specific issue may not result in an overpayment, the Minister would not issue a refund. A blanket waiver without sufficient details of the transaction or potential overpayment would not be considered a valid refund request. We trust these comments will be of assistance.

Yours truly,

Terry Young, CA, CPA
for Director
International Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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