Income Tax Audit Manual
Compliance Programs Branch (CPB)
This chapter was last updated November 2019.
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Chapter 12.0 Specific audit guidelines and checklists
Table of Contents
- 12.1.0 Taxpayer requests
- 12.2.0 Auditing employee benefits
- 12.3.0 Apply proposed legislative amendments
- 12.3.1 Background
- 12.3.2 Prospective vs retroactive law
- 12.3.3 Grandfathering provision
- 12.3.4 Effect of amendments on audit adjustments
- 12.3.5 Guidelines to deal with proposed legislative amendments
- 12.3.6 Presenting assessment details to taxpayers
- 12.3.7 Taxpayer agrees to pay amendment-related assessment
- 12.3.8 Application of penalty
- 12.3.9 Application of interest
- 12.3.10 Taxpayer does not agree to pay amendment-related assessment
- 12.3.11 Application of penalty and/or interest
- 12.3.12 For future use
- 12.3.13 Income Tax Act amendments
- 12.4.0 Auditing elections and applications
- 12.5.0 For future use
- 12.6.0 Specific income tax elections
- 12.7.0 Situations requiring an amended audit
- 12.8.0 For future use
- 12.9.0 For future use
- 12.10.0 Assessing GST/HST included vs extra
- 12.11.0 For future us
- 12.12.0 For future use
- 12.13.0 Dispositions of taxable Canadian property
- 12.14.0 Multiple jurisdictions and allocation of income – Under review
- 12.14.1 Introduction – Under review
- 12.14.2 Multiple jurisdictions – Definitions – Under review
- 12.14.3 Permanent establishment – Under review
- 12.14.4 Gross revenue, salaries and wages paid – Under review
- 12.14.5 Multiple jurisdictions – Risk assessing policy – Under review
- 12.14.6 Exception (Non-agreeing provinces and single permanent establishment) – Under review
- 12.14.7 Dispute resolution with non-agreeing provinces – Under review
- 12.14.8 Multiple jurisdictions – Documents and processing requirements for Headquarters – Under review
- 12.14.9 Reference material – Under review
- 12.15.0 Offsetting adjustments
- 12.16.0 Requesting a real estate appraisal or business equity valuation
- 12.17.0 Consultations with Excise Duties and Taxes Division
- Appendix 12.1.0 Letters
- Appendix 12.2.0 Forms, templates, and checklists
- Appendix 12.3.0 For future use
- Appendix 12.4.0 T2 CORTAX
- A-12.4.1 Introduction
- A-12.4.2 CORTAX definition
- A-12.4.3 T2 CORTAX Enquiry Menu
- A-12.4.4 Notes to financial statements not accessible online for paper filers
- A-12.4.5 Access the T2 CORTAX Enquiry Menu
- A-12.4.6 CORTAX, related systems, and profiles
- A-12.4.7 Glossary of terms
- A-12.4.8 CORTAX information sources on InfoZone
- A-12.4.9 Coordinators
12.0 Specific audit guidelines and checklists
Taxpayers often ask for changes to returns already filed. Most of these requests must be reviewed by Audit. The most important risks of taxpayer requests (TPRs) include that the changes:
- may not be according to legislation or CRA policy;
- may affect prior year or subsequent year returns;
- may affect discretionary amounts or deductions.
In some cases, requests for change are to correct amounts originally reported. If the risk of loss is material, an audit may be needed to make sure that the request is according to legislative requirements and CRA policies.
The taxpayer relief provisions give the authority to adjust filed returns. For more information, go to 3.0, Taxpayer rights and taxpayer relief.
Taxpayers ask for changes to previously filed returns or their obligations under the Income Tax Act (ITA) for many reasons, including:
- changes to income and/or expenses;
- circumstances for revising capital cost allowance (CCA), business-use-of-home expenses, and permissive deductions;
- amending losses;
- change of year-end;
- deemed changes in year-end;
- change of tax services office (TSO);
- charter surrender or revival;
- destruction of books and records;
- amended elections;
- request for clearance certificates;
- voluntary disclosures;
- business enquiries; or
- revocation of a waiver.
Changes to income and/or expenses
Income and expenses can be revised because of errors in original calculations, as well as for changes in losses, more CCA, or other permissive deductions.
Circumstances for revising capital cost allowance and permissive deductions
CCA and other permissive deductions can be revised in many circumstances, including:
- upward reassessment of tax and the taxpayer has not claimed the maximum CCA or business-use-of-home expenses;
- property was expensed instead of capitalized - the taxpayer can ask for more CCA on the cost of the property that should have been capitalized, if the claimed expense is disallowed under paragraph 18(1)(b);
- transfers of CCA between classes of property;
- errors in classes of depreciable property (incorrect CCA class);
- changes in classes for property subject to certification;
- CCA revised with offsetting adjustments in other permissive deductions for taxable years; and
- CCA revised for a tax year with a nil assessment, if additional tax is not assessable, including statute-barred years that may be affected by the revision.
Changes to permissive deductions are not permitted for a year if the taxpayer has filed a notice of objection.
For more information, go to:
- Income Tax Information Circular IC84-1, Revision of Capital Cost Allowance Claims and Other Permissive Deductions; and
- 11.4.2, Filing a waiver.
Taxpayers may ask what to do to determine or redetermine losses.
When losses for a tax year are revised by the minister to reduce or eliminate the loss, the taxpayer is informed on the notice of reassessment that their losses can be determined should the taxpayer want to object to the reassessment. The taxpayer cannot appeal losses in dispute until those losses are determined. Once the determination is made, the taxpayer can file an objection to the loss and usual assessing rules take effect. Requests for determination of losses are sent to the director of the TSO.
Verify the losses by reviewing the system and income tax returns. The procedure to process these requests may vary from one TSO to another. Form T67AM, Notice of Determination/Redetermination of a Loss, is issued to the taxpayer by the tax centre (TC), sent to the assistant director, Audit (ADA) for approval and signature, and then returned to the TC.
The taxpayer may choose to wait and apply the original losses to another tax year. When the CRA reassesses that return to adjust that year's claim, the taxpayer can file a notice of objection to that assessment.
For more information, go to 11.5.10, Loss determination, and 29.0, Losses.
Change of year-end
Under subsection 249.1(7), the fiscal year-end of a taxpayer cannot be changed without the minister’s permission and can only be changed for sound business reasons, such as:
- a change in the corporation's year-end to the same year-end as a related, associated, or affiliated corporation;
- to coincide with the usual operating cycle of the business; or
- property used in carrying on a business is transferred to or sold to another corporation under section 85(1) or partnership under section 97(2).
Retroactive changes in year-end, changes in year-end for the personal convenience of the taxpayer, and changes to defer taxes are not permitted.
Changes in year-end trigger a deemed year-end. As a result, certain amounts, such as losses that may be carried forward for specific time periods, will expire more quickly.
Deemed changes in year-end
A deemed year-end may result when:
- a sole proprietor dies;
- a partnership ceases to exist;
- an individual or company is bankrupt;
- an estate or a trust is wound up;
- taxable Canadian corporations are amalgamated;
- a Canadian corporation is wound up under subsection 88(2); or
- control of a corporation is acquired and paragraph 249(4)(d) applies.
There is no change in year-end when a company charter expires, but the company is later reinstated.
Change of tax services office
When the taxpayer asks for a change in TSO, the request is sent to the TSO where the taxpayer has previously filed returns. The taxpayer may not arbitrarily select a TSO to file a return; the location of the books and records determines the TSO where returns are filed. It is possible that taxpayers also registered for GST/HST will file returns in different TSOs because the mailing address determines the TSO where GST/HST returns are filed.
The TC may change a taxpayer’s TSO without approval from Audit when a master is created from gazette information and:
- no return has been filed and a change of address is later received from the gazette or from the corporation, that now requires a change in TSO code; or
- the first return filed shows a change of address that requires a change of TSO.
Specific situations also unique to the TSO where returns are filed include:
- Deceased taxpayer returns stay in the TSO of record at the time of death.
- If a taxpayer filed a notice of objection, it may be transferred to another TSO; however, the original TSO keeps control of the appeal.
- The TSO keeps a bankrupt account from the time of the bankruptcy. If the trustee has been discharged from the duties as trustee, but the taxpayer has not been discharged, the account may be transferred to the TSO serving the taxpayer's new place of residence. When both parties have been discharged, the account is no longer active; any transactions entered into by the bankrupt account under a new corporation are dealt with separately from the original bankruptcy.
- The TSO may not be changed for a corporation with a balance owing or if the corporation has clearly ceased operations and is without assets.
Taxpayers are informed in writing of changes of the TSO.
Charter surrender or revival
The TC refers charter surrenders and revivals to the TSO for Audit’s review to determine if there are any deemed dividends to be assessed or any other adjustments of unusual expenses that have to be assessed before granting the charter surrender.
The auditor determines if there has been any activity beyond the struck-off record or dissolution date for GST/HST and source deductions. Assessments can only be made up to a specified period of time according to provincial or federal corporations acts involved after the charter surrender date regardless of when the returns were filed, unless the corporation can be revived.
In the case of amalgamation, the old corporations are deemed to carry on under the name of the new corporation.
For more information, go to 16.1.0, Clearance Certificate Program.
Destruction of books and records
Taxpayers are required to keep books and records for certain time periods. Taxpayer Services usually receives and grants requests for destruction of books and records, unless the request is for destruction of records for the last six tax years. Audit reviews these requests.
The designated authority in Audit will usually approve requests to destroy records when:
- the request is beyond the normal reassessment period;
- there are no audits in progress;
- all appeals have been completed.
Requests are denied if the request for destruction is for books and records within the normal reassessment period. If the request does not specifically state that it relates to taxes under the ITA or the Excise Tax Act (ETA), the request will be deemed to relate to both taxes.
For more information, go to 10.2.0, Books and records.
Taxpayers may be allowed to amend elections (for example, Forms T2057, T2058, and T2059) according to income tax information circulars:
- IC07-1R1, Taxpayer Relief Provisions, Part III; and
- IC76-19R3, Transfer of Property to a Corporation Under Section 85.
Requests to amend elections are reviewed for tax implications. If there are significant questions or problems about the revised elections, the request may be referred for audit. The auditor should inform the taxpayer if the amended election request has been approved or denied and give the reason if the request is denied.
Request for clearance certificates
Taxpayers or their representatives may ask for clearance certificates for deceased taxpayers, estates, trusts, or corporations. Send all requests for clearance certificates to the responsible TSO area.
For more information, go to 16.0, Clearance certificates, estates, and trusts.
Requests from taxpayers to increase taxable income are handled as a usual TPR, unless the taxpayer specifically states that the request is a voluntary disclosure. Refer voluntary disclosures to the Voluntary Disclosures Program Section. Interest and penalties, if they apply, are retroactive to the date of filing of the original return and are calculated by the TC. If losses are applied to taxable years, the interest is calculated from the date of the request.
For more information, go to:
- Income Tax Information Circular IC00-1R5, Voluntary Disclosures Program; and
- 3.3.0, Voluntary Disclosures Program.
Auditors that deal with TPRs may also get tax questions, which should be referred to the business enquiries telephone service. If the question is beyond the scope of the business enquiries agent, it will be referred to a central mailbox using the designated procedures.
For more information, go to 10.11.14, Referrals to Technical Applications Section and Valuations Section.
Revocation of waivers
Designated auditors may handle the revocation of waivers as a TPR. Revocations are date stamped when they are received. The auditor determines the status of the file and if the file is charged out, the auditor of record is informed by round trip memorandum (RTM) that the revocation will be processed for the taxpayer. If the file has not been charged out, the auditor should get the tax returns, verify if there is a reassessment on the system, and determine if the reassessment has been processed before granting the revocation. The auditor informs the taxpayer in writing that the request has been granted or denied. If the request is denied, the auditor gives the reasons in the letter to the taxpayer.
For more information, go to:
- 11.3.0, Normal reassessment period; and
- 11.3.7, Assessment after the normal reassessment period and penalty for false statements or omissions.
Risks associated with taxpayer requests
The risks with making changes to filed income tax returns include:
- The taxpayer may try to obtain relief from tax, not available through other methods of recourse. If the request is granted, the taxpayer may get relief that is contrary to legislation or CRA policy.
- The taxpayer may try to abuse the system by asking for changes to elections or returns, thereby taking advantage of retroactive tax planning.
- The effect of the changes to related persons. For example, a spouse or common-law partner may ask for a change to increase income, possibly reducing the spouse or common-law partner amount claimed by their spouse or common-law partner.
- Losses carried forward or back may affect CCA or other permissive deductions, which result in incorrect net income calculated.
- The taxpayer may ask for a discharge from tax when sending a final return for charter surrender, bankruptcy, or clearance certificates. Examine more if audit issues are identified in the review stage.
Additional undepreciated capital cost
If losses carried forward or back affect CCA, the undepreciated capital cost (UCC) is also affected. Later claims of CCA are based on the revised UCC.
General requirements of taxpayer requests
The general requirements for all taxpayer requests (TPRs) are:
- T1 – The taxpayer sends a T1-ADJ or signed letter with the details of the adjustment to the TC. The taxpayer gives their social insurance number (SIN), address, telephone number, and years involved in the request.
- T2 – The taxpayer sends the amended T2 return to the TC or notes changes in a letter with the business number (BN), corporate name, address, tax years involved, and any supporting information.
- T3 – The representative sends a letter to the TC with the trust account number, details of changes, tax years involved, and any supporting information.
- Other forms – The taxpayer sends any amended forms and supporting information to the TC. Relevant information such as taxpayer name, BN, and address must be given.
Taxpayers, other than public corporations, have three years to file amendments to assessed returns and generally have six years to amend losses. Public corporations have four years to file amendments to assessed returns and seven years to amend losses.
For more information, go to 29.0, Losses.
Processing taxpayer requests
The TC can process amended income tax returns unless:
- the effect of the change is more than the limit and the TPR is referred to the TSO; or
- the file is now under review or has been selected for review.
TPRs are sent to the Audit Division or, if the return is under audit, to the auditor assigned to the file. A TPR for a file designated as a large file case is directed to the auditor in charge of the case. A TPR for a return now under objection or appeal is directed to Appeals Division in the TSO.
Note that the T2 Case Management System allows the TC to electronically refer files and related TPRs to the TSO.
These audit procedures apply to TPRs:
- The taxpayer's request is sent to the TC and then sent to the TSO for review.
- The request is logged into inventory control if an inventory control system is in place in the TSO. The designated auditor uses correct time codes to track the time involved to resolve the TPR.
- The request is assigned to an auditor in a TPR group or to the original auditor if an audit was done for that period.
- The auditor determines the purpose of the TPR. If the request can be processed without any documents, the request is allowed, allowed in part, or denied.
- The auditor gets necessary returns and determines if more work is needed.
- The auditor considers the implications of requests for statute-barred years.
- The auditor considers the implications of requests on balances carried forward and back.
- The auditor considers the implications of requests for changes to amounts that are allocated with other taxpayers such as Canadian-controlled private corporation (CCPC) association allocations.
- For T1 returns, there may be taxpayer relief considerations that relate to the request that the auditor must address, particularly processing delays. The taxpayer relief requests are referred to the taxpayer relief unit.
- If needed, ask for more information from the taxpayer and review. If the reviewer decides that more audit work is required, the file is referred for audit or is reviewed by the auditor.
- If the taxpayer indicates that their preferred language is different from the language on file in the CRA computer systems, ensure a correction is made so that all correspondence, including any notices of reassessment generated, are in the taxpayer’s preferred language.
- More research on technical topics may be required before a decision on the request can be made.
- If the request complies with the legislation, the TPR will usually be allowed in part or in full, respectively decision-coded partial or approved. If not in compliance, the TPR may be denied. If the request complies with the law, but the information received is incomplete, the taxpayer is asked for more information.
- The request is processed as a reassessment or included in an audit in process if the request is for years under audit. A letter is sent to the taxpayer with the course of action.
- Denied requests need no more action. The file is sent back to the TC with the relevant documents on the return along with the decisions and letters to the taxpayer stating that no action was taken. In the case of an audit, the request is decision-coded denied. If the request is allowed for a fast-track T1 return, Form T919, Request for online RAP, is prepared with other related processing documents and audit working papers. If the TPR is processed with an audit, any adjustment is included in the completed audit. Send the file for review to the team leader. The team leader’s final signature indicates that the audit case meets established policy, as well as procedural and legislative standards in all material respects.
- Once the request is approved, the TPR inventory control is updated.
- The request or completed audit is sent to the TC to process the reassessment.
Taxpayer requests and retroactive tax planning
Retroactive tax planning is the result of an event that occurs after initial planning was completed based on the facts available at that time. New information may cause the taxpayer to portray the events differently. Although taxpayers are allowed to arrange their affairs to decrease taxes payable, the intent of the taxpayer in making changes to previously reported transactions is important since retroactive changes may result in misuse or abuse of the acts.
TPRs are one method that a taxpayer may use to reach this objective. The auditor reviewing the TPR should exercise judgement to make sure that the request does not take advantage of retroactive tax planning to abuse the system. Examples of retroactive tax planning include:
- facts re-characterized;
- salary and/or management fee expenses;
- tax deferral;
- income diverted; or
a) Facts re-characterized
The original returns may be based on facts portrayed in a certain way and perhaps revised based on more or new information. Examples include capital losses converted to an allowable business investment loss (ABIL), capitalized costs converted to deductible expenses, and taxable income converted into exempt income.
b) Salary and/or management fee expenses
Salaries and/or management fees may be revised to increase the deductions from taxable income without any services actually being rendered.
c) Tax deferrals
In an effort to defer income tax, the taxpayer may revise current year expenses to include prior year expenses or include expenses for other entities.
d) Income diverted
There may be requests to divert income from one taxpayer to another that pays tax at a lower rate. This involves income splitting between the taxpayers that may not be allowable.
Taxpayers may ask for the transfer of losses from one entity that is in a loss position to another entity that is in a taxable position.
Taxpayers may file late or amended elections or revoke elections. Requests will not be accepted for retroactive tax planning that may take advantage of changes to law enacted after the due date of the election.
Taxpayer requests and tax protesters
Tax protesters may ask for adjustments that are peculiar to their situation. Auditors who have these types of requests should exercise due diligence in dealing with them.
For more information, go to Debunking tax myths.
Taxpayer requests and cross compliance
If the review of a TPR shows that there are implications for the other tax, refer the issue to make sure that the correct changes are made.
Taxpayer requests and remission orders
A remission order is an extraordinary measure that allows the federal government to give relief to a person when the desired result cannot be achieved within the legislation that applies, through assessing, or other action. Generally, all means available within the legislation should be exhausted before remission relief is considered, that is, filing a notice of objection and/or an appeal, or requesting any recourse under a tax convention. Therefore, a remission request will not be considered while a case is being reviewed through the objection process or is before the courts. However, take care not to insist that a person use the objection or appeal process first, when it is evident that the requested relief will not be available through such means.
Remission may be made of amounts paid or payable for:
- federal income tax;
- goods and services tax (GST);
- harmonized sales tax (HST) in the participating provinces;
- excise taxes or duties;
- interest; or
Other debts to Her Majesty may also be remitted in certain cases; for instance, non-tax amounts such as Canada Pension Plan contributions and employment insurance premiums.
Before remission is considered, examine the case to determine if other solutions are available, such as applying taxpayer relief.
Remission requests are initiated by the affected person directly or through a representative (including tax professionals and federal or provincial members of Parliament). It is also possible for an area within the CRA to initiate a remission request if circumstances are considered to warrant relief.
A TSO may be asked to guide and inform a person seeking tax relief. If, in the opinion of the TSO, the case clearly does not qualify for remission, the TSO should give the person information. If the person still wants to make a formal remission request, or if the TSO believes that remission may be warranted, the TSO should give the person information on the remission process, including how to send a written request for remission and the information to include with the request.
Caution the person, however, that remission is an extraordinary discretionary measure that will not necessarily be recommended once the request has been evaluated.
When a written request is received, the appropriate TSO usually conducts a thorough examination, reviews the history of the case and the sequence of events, detects any errors or discrepancies, and sends a recommendation to Headquarters, accompanied by a report with the information outlined in Section IV. The recommendation and report is signed by the TSO director and sent to the Legislative Policy Directorate of the Legislative Policy and Regulatory Affairs Branch for income tax requests. The person asking for the remission is not informed if a positive or negative recommendation has been made to Headquarters. This avoids raising false expectations since a positive recommendation may be overturned at any next level and a decision is not final until the Governor in Council has actually issued a remission order.
If a person wants to make more representations on a case, refer them to Headquarters.
Headquarters reviews recommendations from field offices. This includes a review of files, correspondence, collection diaries, reports, and court documents. Issues are researched and more information is sought as needed. The case is then presented to the Headquarters’ Remission Committee to consider. In some instances, Headquarters may consult with the Department of Finance or other interested parties before the Committee presents its final recommendation to the assistant commissioner, Legislative Policy and Regulatory Affairs Branch.
For more information, go to CRA Remission Guide.
Taxpayer requests and waiver of a taxpayer's right to object
When there is no misrepresentation or suspected fraud, accept an adjustment request for issues if the taxpayer previously waived objection rights, for example:
- the CRA did not reassess a waived issue according to the audit agreement and in the case of a TPR for a corporation, the requested adjustment is brought to the CRA's attention before the statute-barred date; or
- the taxpayer gives new or more facts to show that the reassessment was incorrect at the time it was made and, in the case of a TPR for a corporation, the requested adjustment is brought to the CRA's attention before the statute-barred date.
For more information, go to 11.2.8, Waiver of right of objection or appeal.
Employees often receive benefits from their employer as a result of their office or employment. Employees and shareholders are required to pay income tax on most benefits received.
If the employer, a GST/HST registrant, makes a property or a service available to an employee to be included in the employee's taxable income as a benefit, except if the benefit amount is for an exempt or zero-rated supply or if the registrant was denied an input tax credit (ITC) under section 170 of the ETA to have collected the GST for the benefit amount, the employee is not liable to pay the GST/HST to the registrant giving the benefit. Rather, an amount equal to the GST is included in the employee's income for income tax.
Some audits will involve only a few employees and no related, associated, or affiliated taxpayers. The auditor should assess employee benefits whenever possible. If significant problems are suspected or become evident during the audit, refer to Employer Compliance Audit.
Some of the more common taxable benefits include:
- personal use of employer assets such as vehicles, aircraft, vacation properties, or condominiums;
- certain allowances paid to employees;
- parking provided by the employer;
- interest-free or low interest loans;
- stock purchase options;
- incentives or prizes;
- relocation expenses;
- insurance premiums paid by the employer;
- wage loss replacement plans;
- rent-free or low-rent housing;
- retirement allowances;
- termination payments;
- employer contributions to retirement plans; and
- tuition fees, scholarships, and bursaries, if the primary beneficiary is the employee.
Use the checklist in Appendix A-12.2.2 to review taxable benefits.
For more information on specific benefits, go to:
- Income Tax Folio S2-F3-C2, Benefits and Allowances Received from Employment
- Income Tax Interpretation Bulletin IT63R5, Benefits, Including Standby Charge for an Automobile, from the Personal Use of a Motor Vehicle Supplied by an Employer – After 1992
- Income Tax Interpretation Bulletin IT432R2, Benefits Conferred on Shareholders
Collections and Verification Branch is functionally responsible for the Employer Compliance Audit (ECA) Program, located within the Employer Compliance Division of the Business Compliance Directorate. The ECA Program makes sure that all taxable benefits and employment income, including contracts for services, are reported and that correct source deductions have been remitted and will continue to be. This involves an in depth examination of the books and records of employers, including individuals, corporations, testamentary and inter vivos trusts, municipalities, universities, school boards and post-secondary institutions, and hospitals.
Employer compliance audits may be carried out independently or with an audit being done by large file case auditors. Consider limiting the interruption to the taxpayer and the availability of ECA employees.
In many audits, the business auditor can assess the employee benefits. If the auditor notices a benefit peculiar to the type of taxpayer being audited, contact an ECA auditor to discuss the situation to assess the audit potential for that particular industry or scenario. The auditor should get as much information as possible before contacting an ECA auditor, including the names of contact persons of the taxpayer being audited.
If taxable benefits are identified and have not been reported by the employees, add the amount of the benefits to the employees' income and reassess their T1 returns.
During an audit, get the trial balance, which shows all general ledger accounts and the balance in each account. By reading the chart of accounts with the trial balance, the auditor can identify where benefits might exist, plus the amount of questionable expenditures. This information should be discussed with a member of the ECA staff to determine non compliance risk.
After discussing with ECA, possible situations include:
- There is no obvious non-compliance. No more contact with ECA is necessary, unless once on site, the auditor has a situation that is different from what was originally clear. Inform ECA if more or new information becomes available.
- There are some questionable items that need to be clarified. Depending on the information gathered, it may be necessary to do a benefits audit. Decide if the benefit and income tax audits are to be done at the same time.
- There are significant problems, and an assessment for benefits is inevitable. Decide to have an employer compliance auditor audit at the same time as the income tax audit, or to postpone the audit and review the situation later. Inform the taxpayer that employee benefits are under review. Make arrangements to accommodate the ECA, if necessary.
For more information to determine benefits and the audit risk, go to Appendix A-12.2.2, Taxable benefits checklist.
Note: The ECA auditor will open a new case in the Audit Information Management System (AIMS) to record audit time and production results and follow the ECA policy and procedural guidelines accordingly.
Related, associated, or affiliated taxpayers
In some situations, particularly if the taxpayer being audited is a subsidiary of a larger group of companies, consider benefits as not necessarily accruing from the taxpayer being audited.
For example, employees may receive free parking at a parking lot owned by the parent company. Contact ECA to determine the risk and course of action. ECA may become directly involved now to assess the complete benefit situation, schedule an audit of benefits later, or direct the auditor to reassess benefits as required. Inform the taxpayer of a possible visit from ECA.
Informally consult ECA as a preliminary measure to make sure that benefit-related assessments are according to the related legislation and established ECA policies.
To refer the case for audit, prepare Form T133, Lead or Project Information. Follow instructions in Integras to create a referral and have it reviewed and approved by the team leader.
For detailed instructions on Integras, go to learning product TD1147-000, Integras eGuide. For a direct link to the Integras eGuide, select the Help menu at the top of the Integras Desktop screen.
- Guide T4130, Employers' Guide - Taxable Benefits and Allowances
- Guide RC4022, General Information for GST/HST Registrants
- GST/HST Memoranda Series Chapter 3, Tax on supplies
- GST Memorandum G400-3-2, Employee and Shareholder Benefits
- Income Tax Folio S2-F1-C1, Health and Welfare Trusts
- Income Tax Folio S2-F3-C2, Benefits and Allowances Received from Employment
- Income Tax Folio S3-F9-C1, Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from Crime
Income tax interpretation bulletins
- IT63R5, Benefits, Including Standby Charge for an Automobile, from the Personal Use of a Motor Vehicle Supplied by an Employer – After 1992
- IT76R2, Exempt portion of pension when employee has been a non resident
- IT124R6, Contributions to Registered Retirement Savings Plans
- IT148R3, Recreational Properties and Club Dues
- IT167R6, Registered Pension Funds or Plans – Employee's Contributions
- IT421R2, Benefits to individuals, corporations, and shareholders from loans or debt
- IT428, Wage Loss Replacement Plans
- IT432R2, Benefits Conferred on Shareholders
- IT456R, Capital Property – Some Adjustments to Cost Base
- IT456RSR, Capital Property - Some Adjustments to Cost Base
- IT499R, Superannuation or Pension Benefits
- IT508R, Death Benefits
- IT528, Transfers of Funds Between Registered Plans
- IT529, Flexible Employee Benefit Programs
To become law, all bills usually pass through a series of steps that are similar in both the Senate and the House:
- Introduction: the process begins when a bill is introduced.
- First reading: the bill is read for the first time without debate and printed.
- Second reading: the principle of the bill is debated; it is then voted on to decide if the bill is sent to a parliamentary committee.
- Committee stage: a committee hears witnesses, examines the bill clause by clause, and submits a report with or without amendments.
- Report stage: additional amendments to the bill may be moved, debated, and voted on.
- Third reading: the bill is debated a final time and voted on.
- Message: the bill is sent to the other House, where the process starts again from first reading.
- Royal assent: the Governor General or a deputy gives the bill royal assent in the Senate.
A bill that becomes law may come into force on the day of royal assent or on some later day provided for in the bill.
For more information, go to Parliament of Canada.
In general, a prospective law is a law that is applied to transactions and events only after its enactment, effective the date of royal assent.
A retroactive law is applied before its actual enactment, that is, it is deemed to be effective before the date of royal assent, or the language of the statute is expressed in terms that make it effective on a specific date, regardless of the date of enactment.
A retrospective law changes the law in the future, but has consequences that are prejudicial to completed transactions.
Tax legislation is often enacted retroactively, with many provisions that apply from the date they are announced by the minister of finance. There is no constitutional or legal limitation on the retroactivity of tax legislation. In some cases there may be a considerable delay between the date of announcement and the date of royal assent.
Amendments that may disadvantage a taxpayer generally have some type of a grandfathering provision that serves to lessen the impact of the amendment. Under a grandfathering provision, the amendment generally does not apply to agreements or transactions that precede the date of the announcement. In some cases, the grandfathering provision may also affect proposed arrangements, if they are completed by a specific date.
Auditors must consider proposed amendments covered in a Notice of Ways and Means Motion when presenting assessment details to a taxpayer. Proposed amendments have no legal effect until they receive royal assent and, as a result, cannot be imposed on the taxpayer. However, as the amendments are generally applied retroactively after royal assent, the taxpayer is responsible for applying the legislation according to the amended legislation after royal assent.
For example, an amendment is effective on the date it is announced, March 31, 2015, but it does not receive royal assent until February 29, 2016. Without the taxpayer's consent, the auditor cannot assess the taxpayer on an amendment-related issue until at least February 29, 2016. However, after royal assent, the taxpayer's consent is not required and the taxpayer is assessed from the date of announcement.
When a taxpayer files a return based on proposed legislation, do not reassess the taxpayer to deny a benefit only because the proposed legislation has not been enacted. On the other hand, if the proposed legislation is not beneficial to a taxpayer, the CRA cannot require them to file on the basis of proposed legislation. In such cases, inform the taxpayer that they are responsible to apply the legislation according to the enacted legislation after royal assent, and that they may be subject to interest on amounts owing.
If a taxpayer files a return based on existing legislation and later requests an adjustment to the return based on proposed legislation, the CRA will not allow the request. According to Income Tax Information Circular IC75-7R3, Reassessment of a Return of Income, it is not CRA policy to reassess if a previous assessment or reassessment is correct in law. In such instances, inform the taxpayer to file Form T2029, Waiver in respect of the normal reassessment period or extended reassessment period, to protect their interests.
When presenting assessment details to a taxpayer, explain that the part of the assessment for the proposed legislative amendments cannot be processed until after royal assent.
If the amendment-related assessment results in an increase in benefit or refund, do not process the assessment and keep the audit open until the legislation is enacted.
If the amendment-related assessment results in income tax owing, offer the taxpayer the opportunity to pay the amount now.
If the taxpayer agrees to pay the part of the assessment that relates to the amendment now, reflect that part in the notice of reassessment. Penalty and interest generally apply from the date the amendment was announced.
A log of cases when interest and/or penalty have been applied to proposed amendments should be kept in case the amendments do not receive royal assent and reassessment is necessary.
If the taxpayer does not agree to pay the amendment-related assessment now, if the entire assessment relates to the proposed amendments, keep the audit open and process after royal assent.
If the amendment-related assessment is only a part of the total assessment, prepare an Audit Report and process the part of the assessment that is not for the proposed amendments. The amendment-related adjustment is processed after royal assent.
A log of cases should be kept if more audit assessments are necessary after royal assent. The auditor takes the proper steps to complete these audits as soon as royal assent is received.
If the taxpayer does not agree to pay the amendment-related assessment now, send a letter to the taxpayer at the end of the audit. The letter should inform the taxpayer that penalty and interest, if they apply, are applied on any outstanding taxes payable after the date of royal assent.
If an amendment to the ITA is in the taxpayer's favour, the amendment is treated as if it were law effective on the date given in the announcement.
If an amendment to the ITA is not in the taxpayer's favour, there is no legal basis for an assessment relating to it until the amendment receives royal assent.
Elections and applications are choices available to taxpayers, which allow them to adapt the administrative requirements of the legislation to their own business activity. Some elections and applications are available to all taxpayers, while others are restricted to certain persons that meet the specified requirements of that particular election and/or application.
The CRA reviews elections and applications when they are received or at the time of audit to determine if the taxpayer meets the eligibility criteria.
Make sure that all elections and applications that apply during the audit period are valid. Review the trailing documents and the audit file for preliminary information on the taxpayer’s elections and applications. Verify the effective date and expiry date of all elections and applications.
Some income tax elections are made by how income and/or expenses are reported. This becomes evident during the audit.
Verify elections during the audit to make sure:
- the taxpayer has not exercised any elective provisions without making the proper election or application;
- elections no longer valid or that no longer apply are not being used (for example, expired elections or required threshold is exceeded); and
- all the related elections or applications on file are current.
Actions for problematic elections and applications may include:
- For expired elections or exceeded thresholds that need to be renewed and/or amended, the taxpayer needs to re-apply.
- Revoke elections that no longer apply, but are still in effect.
- If the taxpayer has not filed an election, but has taken advantage of the benefits of the election, consider the revenue implications of the affected transactions. The auditor must make sure there is no revenue loss to the CRA as a result of the election.
- If there is potential revenue loss, follow the usual audit assessment process. If the election is still in effect, the auditor should make sure that the taxpayer still meets the necessary criteria and asks the taxpayer to fill in the correct form.
Examples of guidelines for problematic elections:
- If the transaction for which no election was filed would not result in any revenue loss to the CRA, get the proper election to keep the taxpayer's file up to date if the election is still being applied.
- If the unfiled election affects only a single transaction (for example, supply of business assets), a backdated election is not required. However, the audit file must include sufficient disclosure about the transaction.
Taxpayer relief legislation gives the CRA the discretion in certain circumstances when a taxpayer fails to meet the obligations if it can be shown that there were unusual circumstances or that the failure to meet the obligations was inadvertent. For more information, go to:
- 3.0, Taxpayer rights and taxpayer relief; and
- Income Tax Information Circular IC07-1R1, Taxpayer Relief Provisions, Part III, Guidelines for accepting late, amended, or revoked elections.
Requests to accept late-filed elections should be in writing.
Late-filed income tax elections
If the request for a late-filed election is accepted, the taxpayer is subject to a penalty of $100 for each complete month (from the due date of the election to the date the request is made) up to a maximum penalty of $8,000.
However, the full amount or any part of this penalty may also be waived or cancelled. Subsection 220(3.2) allows the minister to accept late, amended, or revoked elections that are prescribed. Prescribed elections subject to the taxpayer relief legislation are listed in Income Tax Regulation 600.
Taxpayers voluntarily file elections to qualify for special provisions under the ITA. The provisions are often used to eliminate or defer certain tax consequences that result from a specific type of transaction.
For more information, go to Guide 4012, T2 Corporation – Income Tax Guide.
The TSO or the TC may process elections. The Taxpayer Services Division processes elections at the TSO.
The request to correct a previous income tax audit is usually the result of a:
- completed audit when the notice of reassessment has already been made; or
- taxpayer request (TPR).
Conduct an amending or follow-up income tax audit based on the auditor’s and team leader’s judgment. An amending audit may be necessary if:
- an error was made when the audit was processed that resulted in an overstated reassessment; or
- the taxpayer gave more information, after the first audit was processed, to reduce the reassessment and Audit agrees to amend the reassessment rather than send the issue to Appeals.
If the taxpayer has filed a notice of objection and Audit has decided to amend the previous audit, the auditor must determine if the appeal is still necessary and communicate with Appeals to clarify the situation. An appeal may still be required if Audit does not agree with the taxpayer.
It is important to determine if there are concerns about statute-barred periods in the original audit before amending an audit. Under section 152, Audit cannot make, amend, or reverse a reassessment of a statute-barred year. If there were any incorrect adjustments in the original audit that have since become statute-barred, the auditor should inform the taxpayer to pursue the issue by filing a notice of objection.
If a reassessed year is not statute-barred, but will become statute-barred before the amended audit can be processed, the auditor should ask the taxpayer to fill in Form T2029, Waiver in respect of the normal reassessment period or extended reassessment period, for that year before taking any more steps in the amendment process. If the taxpayer declines to sign the waiver, Audit is unable to process any amendments to the earlier audit and the taxpayer will need to file a notice of objection.
Prepare the regular audit working papers, schedules, and forms. The major differences between an amended audit and a regular audit are:
- The Audit Report is generally shorter, since it only explains the amendments to correct the previous audit.
- The audit forms and schedules reflect a credit re-assessment.
- The letter to the taxpayer explains that a credit to reduce the prior reassessment is being issued.
- The previously assessed figures for the schedules are the assessed figures as a result of the first audit.
There are no direct income tax implications when assessing GST/HST extra vs GST/HST included. However, if the supplier and purchaser of a supply did not originally account for GST/HST, the amounts recorded in the supplier's books and records for sales or dispositions and in the purchaser's books and records for purchases, acquisitions, or expenses, will not include GST/HST. The amounts of a tax-included assessment of GST/HST will be incorrect. Adjustments to income tax returns and schedules may be necessary.
If a tax-extra assessment of GST/HST is made and the supplier is unable to collect the additional GST/HST from the purchaser, the supplier is not entitled to an income tax deduction for the GST/HST remitted to the CRA.
Taxable income earned in Canada for the year by a non-resident in Canada who has disposed of taxable Canadian property (except for treaty-protected property) is subject to Part I tax, under section 115. The taxable income is any portion of taxable capital gains over the deductible capital losses resulting from the disposition of taxable Canadian property or any interests in and options on this property. Dispositions of taxable Canadian property include deemed dispositions.
If the purchaser could or should have known that the vendor was a non-resident, the purchaser has certain obligations. In certain circumstances, the purchaser is liable to pay income tax for the vendor, under subsections 116(5) and (5.3). Income tax must be remitted to the Receiver General within 30 days after the end of the month in which the taxpayer acquired the property. Any purchaser who fails to remit the tax payable to the Receiver General may be liable to pay a penalty, the amount calculated under subsection 227(9).
Capital real property in Canada, capital property used in carrying on a business in Canada, and shares of capital stock for some corporations resident in Canada are included under taxable Canadian property. As well, under the ITA, this property also includes any interests in and options on such property.
| General information on vendor
| Name of vendor
| Address of vendor
| Vendor BN/SIN
| Description of property sold
| Reported proceeds of disposition
| Reported adjusted cost base
| Reported capital gains
|Taxable Canadian property|| Yes
|| WP Ref
|1.||Is the property sold or the interest in and options on the said property included in the definition of taxable Canadian property set out in subsection 248(1) of the ITA? Go to Income Tax Interpretation Bulletin IT176R2, Taxable Canadian property – Interests in and options on real property and shares, for examples of interests and options.|
|2.||Did the property sold become taxable Canadian property on April 26, 1995, after changes to the definition of taxable Canadian property as set out in the ITA?
If yes, calculate the gain with the formula under subsection 40(9).
|3.||Is taxable Canadian property of this type excluded property as defined in subsection 116(6)? If yes, the excluded property is not subject to the requirements set out in section 116.
|4.||Does the property become taxable Canadian property when one of these ITA provisions is applied:
|Vendor of taxable Canadian property
|5.||Is the vendor a non-resident in Canada or deemed to be under the ITA (for example, under subsection 250(5))? If yes, subsection 116 may apply.
|6.||Did the non-resident vendor sojourn in Canada in the tax year for 183 days or more? If yes, the vendor is deemed to be resident in Canada throughout the tax year, under paragraph 250(1)(a).
|7.||Is the vendor deemed to be a resident of Quebec? If yes, the vendor may be eligible for tax relief for non-residents and deemed residents of Quebec.
|8.||Was there deemed disposition after the death of a taxpayer under subsection 70(5)? If yes, section 116 does not apply.
|Disposition of taxable Canadian property
|9.||Did the vendor inform the CRA of the actual or proposed disposition of property?
|10.||Are the facts and amounts indicated in the notice of proposed disposition supported by the facts and amounts of the actual disposition?
|11.||Was the taxable Canadian property seized or repossessed under a conditional sale contract?
|12.||Was there deemed disposition of taxable Canadian property after one of the following:
|Disposition by a non-resident person to a person not at arm's length
|13.||Were there no proceeds of disposition of the taxable Canadian property or were the proceeds of disposition less than the fair market value (FMV) of the property at the time of disposition? If yes, the proceeds of disposition may be considered to be equal to the FMV of the property under subsection 116(5.1).|
|14.||Did the vendor or the vendor's representative determine the valuation of the personal or real property? If yes, get a copy of the valuation report and give a copy to Business Equity Valuation, if necessary.
|15.||Did the non-resident dispose of shares of a Canadian corporation to another Canadian corporation not at arm's length? If yes, the amount of a deemed dividend, calculated under subsection 212.1(1), is taxable under subsection 212(2).
|Disposition for consideration over the fair market value
|16.||Did a non-resident shareholder transfer or sell taxable Canadian property to a corporation resident in Canada for consideration including shares of capital stock of the corporation? If yes:
|Gain or loss
|17.||Was the capital gain or loss correctly calculated after disposition of taxable Canadian property?
|18.||Was the property acquired before January 1, 1972? If yes, the median-amount rule described in subsection 26(3) of the Income Tax Application Rules, 1971 (ITAR) may apply to the gain calculated.
|19.||Is the gain exempt under paragraph 40(2)(b) or 40(2)(c)?
|20.||Did a capital loss result from the disposition of the taxable Canadian property? If yes:
|21.||Did the individual (except trusts) once again become a Canadian resident within five years after the date on which they emigrated and did the taxpayer make a specific election about taxable Canadian property, under paragraph 128.1(6)(a)? If yes, the individual is no longer deemed to have realized gains at the time of departure, under subsection 128.1(6).
|22.||Did the partnership, of which one or more partners are non-residents, realize a gain as a result of the disposition of taxable Canadian property? If yes, each of the partners must pay income tax on their share of the taxable capital gain.
|23.||Was the replacement property acquired after voluntary or involuntary disposition of taxable Canadian property? If the conditions set out in section 44 are taken as a whole, the gain realized from the disposition of the taxable Canadian property may be carried over.
|24.||Did an individual (except a trust) realize a loss after the actual disposition of taxable Canadian property within a year after emigrating from Canada? If yes, the loss may be deducted from the gains realized upon emigration, under subsection 128.1(7), subject to the loss-minimization rules (subsection 40(3.7) and section 112).
|25.||Does the deduction for net capital loss in the year relate to income determined on the basis of one of the paragraphs 115(1)(a) to (c)? If yes, this deduction may be allowed.
|26.||Is the income or gain realized on the disposition of property exempt from Part I tax under a tax convention?
|27.||Is the vendor of the taxable Canadian property deemed to be a non-resident under a tax convention?
|Capital gains deduction
|28.||Is the vendor an individual and a deemed resident in Canada? If yes, the vendor can claim the capital gains deduction for certain taxable capital gains.
|29.||Is the vendor an individual and a non-resident in Canada? If yes, the vendor is not entitled to the capital gains deduction.
|Foreign tax deduction
|30.||Did the non-resident taxpayer make the election under subparagraph 128.1(4)(b)(iv) after 1992 and before October 2, 1996? If yes, the taxpayer may be entitled to a foreign tax deduction, under subsection 126(2.2).
|31.||Was the individual who is a former resident of Canada required to pay income tax to another country on a gain already taxed in Canada in the year in which they emigrated? If yes, they may be entitled to a foreign tax deduction under subsection 126(2.21).
|32.||Is the non-resident individual, who is a Canadian trust beneficiary, required to pay income tax to another country on a gain that is already taxed in Canada in a distribution year? If yes, the foreign tax that the recipient paid may be deducted from Canadian income tax payable by the trust, under subsection 126(2.22).
|33.||Was the capital loss sustained by the non-resident individual reduced by paragraph 40(3.7)? If yes, a tax credit may be deducted in calculating income tax payable, under section 119.
|Certificate of compliance
|34.||Did the CRA issue a certificate of compliance in applying section 116?
|35.||Is the actual sale price of the taxable Canadian property different from the estimate stated on the certificate of compliance issued for a proposed disposition?
|The purchaser may be a resident or non‑resident
|Name of purchaser:
|Address of purchaser:
|| WP Ref
|1.||When the purchaser of taxable Canadian property is a non-resident:
|2.||Did the purchaser acquire excluded property, within the meaning of subsection 116(6)? If yes, withholding procedures do not apply.
|3.||Did the purchaser withhold the correct amounts? If no, the purchaser is liable for any income tax payable by the non-resident.
|4.||Did the purchaser remit or pay to the Receiver General an amount withheld under subsection 116(5) or 116(5.3)? If no, they may be liable to a penalty for failure to remit payment, under subsection 227(9).
|Acquisition for consideration less than the fair market value of the property
|5.||Did the shareholder acquire the taxable Canadian property from a non-resident corporation for consideration less than the fair market value of the property? If yes, is the shareholder required to pay income tax on a benefit under subsection 15(1)?
|6.||If Part I applied, would the non-resident shareholder be required to pay income tax on a benefit under subsection 15(1)? If yes, the shareholder is deemed to have received a dividend under paragraph 214(3)(a) and Part XIII tax applies.
|7.||Does the sale contract include a price adjustment clause?
|8.||Does subsection 15(1) apply because of a valuation by the CRA?
|9.||Can the taxpayer take advantage of the policy on refund of an amount that would be taxable under subsection 15(1)?
|Acquisition for consideration over the fair market value of the property|
|10.||Did the taxpayer acquire the taxable Canadian property from a person with whom the taxpayer was not dealing at arm's length and for an amount over the fair market value of the property? If yes, the taxpayer is deemed to have acquired the property at fair market value, under paragraph 69(1)(a).
|11.||Is consultation with any of these sections required:
References – Disposition of taxable Canadian property
- Income Tax Information Circular IC72-17R6, Procedures Concerning the Disposition of Taxable Canadian Property by Non-Residents of Canada – Section 116
- Finance Canada, News Release 98-134, Finance Minister releases migration and trust proposals along with court procedures proposal
- Explanatory Notes – Legislative Proposals and Explanatory Notes on Taxpayer
- Explanatory Notes – Notice of Ways and Means Motion, December 8, 1997
Income Tax Folios
- S3-F3-C1, Replacement Property
- S4-F5-C1, Share for Share Exchange
- S4-F7-C1, Amalgamations of Canadian Corporations
- S5-F2-C1, Foreign Tax Credit
Income Tax Interpretation Bulletins
- IT81R, Partnerships – Income of non-resident partners
- IT176R2, Taxable Canadian property – Interests in and options on real property and shares
- IT242R, Retired Partners
- IT262R2, Losses of Non-Residents and Part-Year Residents
- IT291R3, Transfer of Property to a Corporation Under Subsection 85(1)
- IT420R3, Non-Residents – Income Earned in Canada
- IT451R, Deemed disposition and acquisition on ceasing to be or becoming resident in Canada
Any reference to province in this document includes the territories.
The following policy and procedures apply only to the ITA.
Quebec and Alberta administer their own corporate income tax systems. Corporations that earn income in these provinces are required to file a separate provincial income tax return.
All the other provinces and territories adopt their own legislation for corporate income tax.
The CRA administers the corporate income tax for most provinces and territories (referred to as the agreeing provinces) under the Tax Collection Agreement, except Alberta and Quebec for corporations. Quebec is the only non-agreeing province for the taxation of individuals. The CRA collects the provincial and territorial income tax for all agreeing provinces.
To compensate corporations for the provincial income taxes they are required to pay, the ITA allows them to deduct from the tax otherwise payable an amount equal to 10% of the corporation's taxable income earned in the year in a province. The subsection 124(1) deduction, usually called the federal tax abatement, is granted without taking into account the taxes actually paid or payable by the corporation to a province. Section 124 also applies to the Northwest Territories, Yukon Territory, and Nunavut.
For this provision, the Newfoundland offshore area and the Nova Scotia offshore area are included in the definition of province. Therefore, income taxes paid on a corporation's income derived from the operation of oil and gas in these offshore areas are eligible for the 10% deduction, where tax on income earned in a province is concerned.
Under subsection 124(3), no deduction is granted to a prescribed federal Crown corporation that is an agent of Her Majesty or to a corporation that is not taxable under Part I.
Taxable income earned in a province by a corporation
The expression taxable income earned in the year in a province denotes the amount determined under the prescribed rules. Section 402 of Part IV of the Income Tax Regulations (Regulations) has general provisions for determining the taxable income earned in a province by corporations. Under sections 403 to 413 of the Regulations, determine the taxable income earned in a province by certain specialty corporations, including:
- insurance corporations (section 403);
- banks (section 404);
- trust and loan corporations (section 405);
- railway corporations (section 406);
- airline corporations (section 407);
- grain elevator operators (section 408);
- bus and truck operators (section 409);
- ship operators (section 410);
- pipeline operators (section 411);
- divided businesses (section 412);
- non-resident corporations (section 413); and
- international banking centres (section 413.1).
Under the general provisions, taxable income earned in a particular province represents the portion of taxable income attributable to the particular province with a permanent establishment (PE). If a corporation has no PE in a particular province, no portion of its taxable income is deemed to have been earned in that province. Therefore, if the corporation has no PE outside a province, the whole of its taxable income is deemed to have been earned in that province.
If a corporation has a PE both in a province and outside that province, the taxable income is divided between the PEs based on the allocation formula.
Permanent establishment (PE) is defined in subsection 400(2) of the Regulations for determining taxable income earned in a province. The same principles apply to foreign corporations that carry on business through a PE and are taxed in Canada under a tax treaty
Permanent establishment generally means a corporation's fixed place of business, including an office, a branch, a mine, an oil well, a farm, a timberland, a factory, a workshop, or a warehouse.
A corporation having no fixed place of business in a province may however have a PE in that province if it satisfies any of the criteria listed in subsection 400(2) of the Regulations. If the corporation does not have any fixed place of business, the principal place in which the corporation’s business is conducted will be a PE.
A corporation is deemed to have a PE in a particular place if it carries on business through an employee or agent, established in that place, who has general authority to contract for the corporation or who has a stock of merchandise owned by the corporation from which orders are regularly filled. If the corporation makes use of a commission agent, broker, or other independent agent, examine all the facts to determine if it is carrying on business in a particular place through an agent. If it is, the corporation is deemed to have a PE in that place. It should be noted, that the CRA has concluded that the term agent in the context of paragraph 400(2)(b) of the Regulations, has a legal meaning.
For more information, go to February 9, 2012, memorandum, Provincial Income Allocation Technical Change regarding Permanent Establishment – meaning of “agent” (e.g. Public Warehouse).
A corporation that uses substantial machinery or equipment in a particular place in a province will be deemed to have a PE in that province. The corporation does not need to own the machinery or equipment that it uses. The size, quantity, and dollar value of machinery or equipment used in the particular place are some of the criteria to review in the determination of substantial. The CRA considers size the most important and significant factor. Administrative guidelines on the time required to create a deemed PE are outlined in the February 2010 Provincial Income Allocation Newsletter No. 2, Permanent Establishment – Substantial Machinery or Equipment.
The ownership of land will result in a deemed PE, if a corporation otherwise has a PE in Canada.
An interest in a partnership may also create a PE for the Regulations.
If a corporation is not carrying on a business and, as a result, does not have a PE, then a corporation is deemed to have a PE at the place designated in its incorporating documents or bylaws as its head office or registered office.
For more information, go to subsection 400(2) of the Regulations.
Under the general provisions set out in section 402 of the Regulations, a corporation has to allocate taxable income between PEs in different provinces in proportion to the gross revenues, and salaries or wages paid in the year and attributable to the PE in the province in question. Sections 403 to 413 of the Regulations have other provisions for establishing the taxable income earned in a province by specialty corporations.
Generally, the terms gross revenue and salary or wages for allocation, are defined in subsection 248(1) of the ITA.
Certain items are not included in gross revenue under subsection 402(5) of the Regulations:
- interest on bonds, debentures, or mortgages;
- dividends on shares of capital stock; and
- rentals or royalties from property that is not used in connection with the principal business operations of the corporation.
For more information on the treatment of interest, go to the February 2010 Provincial Income Allocation Newsletter No. 1, Gross Revenue – Exclusion of Interest.
For merchandise sold, the destination of the shipment of merchandise is an important point to examine when attributing gross revenue to a particular province. The place where the transfer of ownership takes place may correspond to the destination of the shipment, but this is not always the case. For gross revenue derived from services, the place where the service is rendered is relevant. In either case, should there be no PE in the particular province, then the gross revenue will be allocated to the PE with which the sale or contract was negotiated.
The salaries and wages paid by the corporation in the year are attributed to the PE to which the employee is attached (reports), even though the employee may sometimes be required to travel to other jurisdictions. The auditor should make sure that taxable benefits that are paid to an employee (such as gifts or incentives) are included in the salaries and wages. The inclusion of deemed or imputed benefits, including stock option benefits, is under review by HQ; therefore, the auditor should consult with HQ before proposing any related adjustments.
Fees paid to another person may be deemed to be salaries and wages paid under subsection 402(7) of the Regulations. The CRA interprets the word normally in this context, to have two conditions:
- The service or function must be one that is performed by an employee of the corporation.
- The need for the other person to perform the service or function is short-term.
The allocation of salaries paid through a central paymaster is subject to the deeming rules under section 402.1 of the Regulations. For more information on central paymaster, go to the October 11, 2012, memorandum, Provincial Income Allocation guidelines regarding the Central Paymaster regulation.
Corporations which are a member of one or more partnerships must include in reported gross revenue and salaries or wages, their share of both partnership amounts.
The audit of the provincial income allocation (PIA) formula, as set out in Schedule 5 of the T2 return or Form T2203 for the T1 return, is mandatory for every income tax compliance audit.
Since April 1, 2010, PIA audits are no longer mandatory for corporate taxpayers reporting:
- no taxable income; or
- gross revenue under $20,000,000
While the PIA audit may no longer be mandatory for these taxpayers, every file, including T1 returns, must be risk assessed from a PIA perspective.
For more information on the PIA risk assessment measures, go to May 31, 2012, memorandum, Frequently Asked Questions #2 on the revised Provincial Income Allocation Audit Policy.
If material PIA issues are identified, auditors should exercise professional judgment and do a PIA audit, as warranted. If the file is assessed as low PIA risk and no audit is done, the decision and rationale to forego a PIA audit must be clearly documented in section J of Form T20, Audit Report, and must refer to sections B and C of the Provincial Income Allocation Audit Plan (PIAAP). All factors supporting the decision taken must be well documented in the working papers.
A separate workload, entitled the PIA Audit Initiative for Small and Medium Enterprises, was launched for 2012-2013 and subsequent years. This initiative will maintain an audit presence for PIA files in the Small and Medium Enterprise (SME) population and will monitor the compliance level.
For more information, go to June 1, 2012, memorandum, Provincial Income Allocation Audit Initiative for Small and Medium Enterprises.
The Provincial Income Allocation Audit Plan (PIAAP) is mandatory for all PIA audits; however, if the auditor has verified that there is only a PE in one province or only PEs in the non agreeing provinces (T2 – Alberta and Quebec, T1 – Quebec), fill in only Sections B and C of the PIAAP.
For more information, go to Communiqué AD-02-03R2 Provincial Income Allocation Audits.
The CRA and non-agreeing provinces (NAPs), including the agreeing province of Ontario, entered into a Memorandum of Understanding for the Avoidance of Double Taxation of Corporations, MOU Ref. # B7.0.
The purpose of the memorandum of understanding (MOU) is to set up a process to:
- identify potential disputes between parties about the application of a taxpayer’s business operations allocation formula; and
- allow disputes between the parties to be resolved to avoid double tax.
Statute of limitations and waivers for non-agreeing provinces
The statute-barred dates normally differ for the CRA and each NAP.
Identification of the statute-barred dates is critical. The MOU signed by the CRA and the NAPs provides that no party may issue a proposal to adjust the allocation formula less than 120 days before the earliest statute-barred date of all the other affected parties.
The intention of this time limit is to make sure the affected party has enough time to verify the proposed reassessment.
However, the 120-day limitation does not apply if fraud or misrepresentation has occurred on the part of the taxpayer or if all affected parties agree not to apply this limitation. If a taxpayer has filed legally binding waivers with all affected parties, the 120 day limit will not apply.
When NAPs are involved, the auditor should ask for a copy of the related provincial assessment notice at the beginning of the PIA audit to identify any statute-barred issues. If the taxpayer delays or refuses to give a copy, the auditor should at once contact their large file case manager or team leader for help.
As well, although NAPs have legislation that allows them to re-open a statute-barred year in PIA cases to reassess and avoid double tax, it is not an automatic or routine procedure. For CRA, only HQ will determine if paragraph 152(4)(d) will be applied case-by-case.
Requests for waivers, Form T2029, Waiver in respect of the normal reassessment period or extended reassessment period, should always be considered when there is a NAP involved. The request should be made to the taxpayer in writing and recommends that the taxpayer file a waiver with the NAPs to avoid double tax.
12.14.8 Multiple jurisdictions – Documents and processing requirements for Headquarters – Under review
Once a PIA audit is completed and reviewed by the large file case manager or the team leader, the PIA audit package will be sent to HQ. This package may include the:
- Provincial Income Allocation Audit Report (PIAAR);
- Provincial Income Allocation Audit Plan (PIAAP);
- Multiple Jurisdiction Income Reallocation (MJIR) schedule;
- gross revenue and salary and wages reconciliations; and
- all supporting electronic working papers.
For change files
The auditor must send a paper copy of the completed PIA audit package to the HQ address:
Canada Revenue Agency
PIA Control Administrator
The auditor must also email an encrypted electronic package to CP-PO_Provincial_Audit-Vérification_Provinciale.
Proposed adjustments affecting the allocation formula about the NAPs must be sent to these provinces, by HQ, at least 120 days before the provincial tax return becoming statute barred.
At the same time the file is referred to HQ, the taxpayer should be informed, by the CRA auditor, of the PIA audit referral process and that CRA is proposing adjustments to the components of the income allocation formula to the NAPs. The documents to support the PIA audit findings should be given to the taxpayer at this time. The taxpayer should be informed that the adjustments would be formally proposed to them at the end of the referral process.
Once the NAPs complete their review of the proposal, HQ will inform the TSO in writing and the auditor can complete the audit.
The PIAAR, PIAAP, and the related schedules should be updated to reflect any changes agreed to be made to the proposal and to reflect any more audit work that was done. The revised package should then be sent to HQ.
If the resolution of the proposed PIA audit adjustments will unduly delay the processing of other audit adjustments, if the taxpayer agrees, a reassessment may be issued. The taxpayer should be informed, in writing, that necessary adjustments to the allocation formula would be made once the outstanding issues have been resolved.
Note that auditors are responsible for managing the statute-barred dates for all change files until the PIA audit is closed.
For no-change files
A paper copy is no longer required for HQ for no-change files. However, the auditor must email all no-change files in an encrypted electronic format to CP-PO_Provincial_Audit-Vérification_Provinciale.
All no-change files must include, at least, the:
- Provincial Income Allocation Audit Report (PIAAR);
- Provincial Income Allocation Audit Plan (PIAAP);
- Multiple Jurisdiction Income Reallocation (MJIR) schedule; and
- gross revenue and salary and wages reconciliations.
Working papers should be kept at the TSO or with the T2 return, according to CRA retention policies.
In summary, PIA change files must still be sent in paper and electronic format, while no change PIA files only need to be sent electronically. For detailed procedures, go to memorandum, Changes to the audit processing procedures – PIA and M&PP deductions/credits, and the YMETC, dated July 22, 2011.
As well, when changes are made to the allocation amounts, the auditor fills in and attaches to the report the MJIR schedule.
Provincial Income Allocation Section – Reference Material is under review.
The auditor’s role is to address non-compliance and to establish the correct tax payable. An increase in income may result in income tax payable. If the taxpayer did not claim the maximum amounts allowable for items, such as CCA or business-use-of-home expenses, ask the taxpayer if they want to increase the deduction from income. Take into account other offsetting amounts uncovered during the audit, whether they relate to the proposed adjustments.
The CRA considers changes or adjustments to permissive deductions according to Income Tax Information Circular IC84-1, Revision of Capital Cost Allowance Claims and Other Permissive Deductions. This policy also applies to:
- special mortgage reserves under paragraph 20(1)(l);
- scientific research and experimental development expenditures of a capital nature, calculated under paragraph 37(1)(b); and
- taxable capital gains reserves calculated under subparagraph 40(1)(a)(iii).
A taxpayer may ask for an amendment or claim a discretionary deduction in a previous tax year for many reasons. For example, a taxpayer in a loss position may choose not to claim CCA in the loss year because unclaimed CCA can be carried forward indefinitely, while non-capital losses expire in twenty years. Two years later, the company reports a profit. The CCA for the previous year is claimed to increase the loss carry-forward. If claiming more CCA increases the loss, there is no change to income tax payable.
Amendments to previously filed returns are permitted, but there is no provision that gives the taxpayer the right to amend a return in all circumstances.
The Federal Court of Appeal in The Queen v Godfrey G.S. Moulds, 78 DTC 6068 at 6073, stated that:
"The principle invoked by Counsel for the Appellant that "a person may not appropriate and reprobate" has no application in this case because the Respondent never had the right to elect between two inconsistent courses of action. His only choice was to claim or not claim a capital cost allowance; once he had decided to claim it, he had to calculate its amount in the manner prescribed by the Statute."
The CRA is not obligated to accept amended returns. The Tax Court of Canada in James Stephenson v M.N.R., 86 DTC 1520 (TCC) verifies this principle. The taxpayer elected to use forward averaging (subsection 110.4(1)). The taxpayer later discovered that he had inadvertently not claimed certain expenses, which lowered his income. The CRA (Revenue Canada, at the time) reassessed for many of those expenses, but would not reassess to permit a new forward averaging election. The Court upheld the CRA's position in denying the new election stating:
"When assessing a taxpayer the Minister considers the information in the taxpayer's return of Income, and if he has good reason, disallows certain deductions claimed by the taxpayer. The Minister however has no authority to arbitrarily vary an election made by a taxpayer, even if his assessment cries out for revision.
Adverse tax consequences may flow to taxpayers who, like the appellant, file their income tax returns in good faith, but because of facts not known to them at the time, the returns filed are assessed tax differently from which they anticipated when they filed their returns and elections under subsection 110.4(1) of ITA. The inability to amend the election and the return of Income in such circumstances is a serious gap in the tax system."
Other cases include:
- Montreal Trust Co. (Lodestar Drilling Co. Ltd.) v M.N.R., 62 DTC 1242 (SCC); and
- Gerald J. Ryan v M.N.R., 67 DTC 5325 (Exchequer Court).
Generally, when a return is opened to process an upward adjustment beyond the normal reassessment period, the taxpayer is allowed any unrelated downward adjustments when the net of all changes is an increase. Review downward adjustments to make sure that the amounts comply with all requirements.
Do not process adjustments that result in a net credit, or credit adjustments alone under subparagraph 152(4)(a)(i).
Auditors must offset a debit adjustment or assessment with credits noted during the audit. Also, before calculating penalty and interest on an assessment, consider outstanding refunds and rebates filed in periods before the audit assessment period.
If credits are outstanding on other accounts, such as GST/HST, custom duties, source deductions, and excise tax, Collections will usually transfer the credit from one account to the account with the balance owing.
There are many sections of the ITA that refer to value and fair market value (FMV). FMV is commonly defined as the highest price, expressed in terms of money or money’s worth, obtainable in an open and unrestricted market between knowledgeable, informed, and prudent parties acting at arm's length, neither party being under any compulsion to transact.
As soon as the auditor or team leader identifies a valuation or appraisal issue, a request for assistance should be made to the proper business equity valuation or real estate appraisal section in the CRA. The Business Equity Valuation (BEV) program determines the value of ownership interests held in a private or public corporation, partnership, sole proprietorship, or franchise and the value of intangible assets such as goodwill, patents, copyrights, trademarks, licenses, and royalties. The Real Estate Appraisal (REA) program determines the value of real property including land, improvements and chattels, leasehold improvements, and other tangible property such as listed personal property and personal use property.
The BEV and REA programs are mandated to give regional service. To request assistance from BEV and REA, the auditor has to create a case in Integras and have it approved by the team leader. For detailed instructions on Integras, go to learning product TD1147-000, Integras eGuide. For a direct link to the Integras eGuide, select the Help menu at the top of the Integras Desktop screen. For more information, go to 10.11.4, Referrals for real estate appraisal or business equity valuation.
For information about the regional BEV sections, go to Business Equity Valuation Program contacts.
For information about the regional REA sections, go to Valuation Section - Real Estate Appraisal Services Contacts.
During initial contact with the taxpayer or representative, the auditor gets information needed for a REA or BEV. The auditor should also consult with the real estate appraiser or business equity valuator to determine information requirements. As the REA or BEV goes ahead, the respective appraiser or valuator may need more information. Relevant information depends on the type of property and includes, but is not limited to:
Business equity valuation
(Refer to Form T104V, Business Equity Valuation Requisition)
Date of valuation
Description of property being valued
- Full set of financial statements (at least three years) including financial statements of any subsidiaries
Taxpayer's basis for arriving at the fair market value reported, if available
- If the property valued is, for example, a license, a franchise, copies of the underlying legal documents
- Purchase and sale agreement (with details of the transaction)
- Letter patents and supplementaries showing list of authorized shares for all companies involved
- Shareholders’ list before and after the valuation date by category showing exactly the share distribution
Shareholder's agreement / partnership agreement
An analysis of the fiscal impact justifying a referral to the business equity valuation section
- List of any real estate properties that may be subjected to a real estate appraisal if a breakdown of the value is required
- Any other pertinent documents about the valuation (for example, agreements such as, shareholder agreements, franchise agreements, royalty agreements, dealership agreements, relationship between the vendor and purchaser, relationship between shareholders and corporation (that is, minority vs controlling shareholder, owner/manager), relationship of shareholders to each other (such as, familial relationship), statements of revenues and expenses for current and prior years, financial statements for current and prior years, the basis of the declared values)
Copies of any previous asset appraisals or valuations of the subject entity
If the property to be valued is shares, list and description of property to be valued, such as:
- Number, type, and class of shares
- rights attaching to shares (voting vs non-voting)
- percentage interest of shares held by each shareholder
Real estate appraisal
(Refer to Form T104R, Request for appraisal assistance)
Date of appraisal
Full description of property being valued
- Income and expense statements for the valuation year and three to four years before if the property is income producing
The basis of the declared values
- Purchase and sale agreement of the subject property and statement of adjustments
- The relationship between the vendor and purchaser
- List of any real estate properties that may be subjected to a real estate appraisal if a breakdown of the value is required
Copies of appraisal reports of the subject valuations of the subject entity
List and description of the property to be appraised, helpful information includes:
- for real estate - municipal and legal address
- for machinery or equipment - manufacturer, model name and number, serial number, date of manufacture, date of purchase, and purchase price
- for art - the title of the work, artist, size of the work, medium, date the work was completed, provenance, date of purchase, and purchase price
Contact the Valuation Section, Business Equity Valuation (BEV) Program for help to determine FMV arising from dispositions or deemed dispositions in these ITA sections:
Section 6: Value of benefits to employees
Section 7: Value of benefits to employees (share issues)
Section 14: Income, eligible capital property
Section 15: Appropriation by shareholder
Sections 38 through 55: Capital gains and losses
Section 52: Dividends in kind
Section 55: Avoidance
Subsection 56(2): Indirect payments (transfer of property)
Section 68: Allocation of proceeds of disposition
Section 69: Non-arm's length transactions
Section 70: Deemed disposition on death
Section 73: Gifts to children, small business, or farm corporations
Section 74.1 through 74.5: Attribution rules
Section 76: Security in satisfaction of income debt
Section 84: Deemed dividend, increase in paid-up capital
Section 84.1: Non-arm's length sale of shares
Section 85: Rollovers
Section 86: Re-organizations, share exchanges
Subsection 98(2): Deemed proceeds, partnership property
Section 116: Disposition by non-residents
Section 160: Tax liability of non-arm's length transfers
Section 212.1: Non-arm's length sales of shares by non-residents
It is important to note that transactions involving some of these situations may not result in income tax consequences at once and may not be disclosed at the time of transfer. It is essential for auditors to examine shareholders' registers, corporate minute books, trailing documents, and associated T1 income tax and benefit returns to make sure all transactions are correctly reported.
Contact Real Estate Appraisal (REA) to determine FMV arising from dispositions and deemed dispositions in these ITA sections:
Sections 6 and 15: Value of benefits to employees and shareholders
Section 10: Inventory valuations
Section 14: Income, eligible capital property
Section 15: Capital gains and loses
Section 52: Avoidance
Subsection 56(2): Indirect payments (transfer of property)
Section 69: Non-arm’s length transactions
Section 68: Allocations of proceeds of disposition
Section 73: Gifts to children, small business or farm corporations
Section 74.1 through 74.5: Attribution rules
Section 85: Rollovers
Subsection 98(2): Deemed proceeds, partnership property
Section 110.1(1) and 118.1: Gifts of real property and other tangible property. Except:
- donations of cultural property certified by the Canadian Cultural Property Export Review Board, Form T871, Cultural Property Income Tax Certificate, filed in the return and
- donations of ecologically sensitive land certified by the Minister of the Environment, or by the Ministère du Développement durable, de l’Environnement et des Parcs if the property is in Quebec.
Section 110.6: Capital gains provisions, FMV at deemed disposition (that is at date of death, change of use)
Section 116: Disposition by non-residents
Section 160: Collections assessments, tax liability of non-arm's length transfers
Section 212: Non-resident
For BEV requests, use Form T104V, Business Equity Valuation Requisition.
For REA requests, use Form T104R, Request for appraisal assistance.
The auditor will then upload these forms to the Integras secondary cases created using the Create Case feature. Once the forms are approved by their team leader, the Integras case will be assigned to the proper BEV or REA team leader responsible for the geographic area where the property is located.
For detailed instructions on Integras, go to learning product TD1147-000, Integras eGuide. For a direct link to the Integras eGuide, select the Help menu at the top of the Integras Desktop screen.
Form T104V, Business equity valuation requisition
BEV services are explained at Valuation Services provided by the BEV program. An attachment to Form T104V, Business equity valuation requisition, outlines the basic documents to give with the referral. According to the Notice to the requestor, included in the Form T104V attachment:
- All business equity valuation requisitions are completed by the originator of the request. The case and file numbers included on Form T104V refer to the taxpayer being subjected to an examination of the declared FMV of property.
- Upon receiving the Form T104V request, a “Supp.” is initiated by the valuation section on AIMS and is linked to the case and file number given. The "assignment completed" date is entered when the valuation work is completed. The “Supp. closed” date is usually entered when the originator of the request contacts the valuation section asking that the Supp. be closed. This allows the valuation section to remind the originator about the AIMS coding, as explained below.
- When there is a proposed change to the declared value, the referring party uses the correct AIMS coding. Use codes 301, 303, 307, and 309 to capture present and future tax changes resulting from Business Equity Valuation’s input and related changes reassessed, including penalties.
- The auditor is informed within about 10 days if the referral is kept for a FMV analysis related to a potential change or if the declared FMV is acceptable.
- The conclusion of the valuation analysis is communicated at the earliest, given the complexity of the referral, the taxpayer's cooperation in giving the pertinent information, and the level of urgent workload in progress. The referring party is kept informed on the progress of the file and is informed on foreseeable delays.
- The referring party must inform the taxpayer or their representative that a referral to BEV has been made. The BEV section then contacts the taxpayer or their representative to get all necessary information, not included with the initial referral, to conduct the valuation mandate. The referring party does not have to be personally involved, but may help at meetings if they want.
A separate Form T104V is required for each valuation request. When FMV determination is required on different property types such as different classes of shares or different companies (parent and subsidiary), prepare a separate Form T104V. Also prepare separate T104V forms when there is more than one effective date that needs a valuation.
Filling in Form T104V
The auditor fills in Part A of Form T104V. The BEV section fills in Part B and inputs the SUPP Number in Part A. If no contact has been made with the taxpayer, state on Form T104V, including the reasons why the business equity valuator should not contact the taxpayer.
Clearly show the reason and tax implications of the request for the BEV on Form T104V. The auditor should also state if the taxpayer has any fractional interest in the subject property.
Fill in all fields that apply in Part A on Form T104V.
Documents and statements required for the valuation of proprietorships, partnership interests, and equity interests (shareholders) include, but are not limited to:
- balance sheet with supporting statements and schedules, as to the effective date of the valuation;
- valuations, if any, of the subject property (for example, corporate shares) before, or on, or around the valuation date;
- valuations, if any, of fixed assets and other significant assets on the balance sheet at the valuation date;
- financial statements for five fiscal periods before the valuation date or since the start of operations, whichever is less (if operations started within the five-year period before the valuation date, include an opening balance sheet with the statements);
- copies of all buy-sell, option and partnership agreements, with full details of all dispositions of the taxpayer's interests (proposed or completed); and
- shareholder agreements.
Depending on the type of organization, include for:
- Partnerships – a list of the partners, with profit and ownership ratios.
- Small private companies – a list of shareholders, with the number and type of shares held and any family relationships.
- Large private or public companies – a list of major shareholders, addresses, relationships, number and class of shares held (and rights attached to shares), and number of shares held as a percentage of the total outstanding shares.
Form T104R, Request for appraisal assistance
REA services are explained at Services Provided by Real Estate Appraisers.
For the appraisal of real property and other tangible property, fill in Form T104R, Request for appraisal assistance. A separate Form T104R is usually needed for each property to be appraised. If there are many properties, discuss the request with the regional team leader, regional coordinator, or team leader of the proper REA section before filling in the T104R forms. More than one Form T104R may be needed for administration or statistics.
Fill in all the fields that apply on Form T104R. This information may help the real estate appraiser:
- property location, name, address, and telephone number of the person to contact to inspect the property;
- declared value and basis on which that value was estimated; and
- original cost of the property, purchase date, vendor name, age of property at the time of acquisition.
The conclusion of REA valuation analysis will be communicated at the earliest date given the complexity of the referral, the taxpayer’s cooperation in providing the pertinent information, and the level of urgent workload in progress. The objective of REA is to provide a turnaround time of 60 days from the time the case is assigned to an appraiser. The auditor requesting assistance will be kept informed on the progress of the case.
The auditor requesting assistance must inform the taxpayer or their representative that a referral to the Appraisal Section has been made. The Appraisal Section will subsequently contact the taxpayer or their representative to obtain any additional necessary information to conduct the appraisal mandate. The appraiser may contact the auditor for assistance. The appraiser will be available to explain the findings of the completed task to the auditor and/or the taxpayer if required.
Appraisals of other tangible property
Form T104R, Request for appraisal assistance, is also used to request the appraisal of cultural property or tangible property other than real estate. When making a request for a tangible property appraisal, include:
- a list of all property to be appraised, together with the description and detail of each item to be valued;
- all available information and material helpful to determine a value such as, appraisal reports and photos; and
- details of the tax implications, such as capital gain, donation of cultural property or other donation, CCA, non-arm's length transfer, as well as an estimate of the potential tax consequences (for example, will a change in the taxpayer's declared value result in current or future payment of income tax; is the taxpayer in a taxable position and at what possible rate and amount).
Information available in the Real Estate Appraisal section
Most REA sections have ownership and other property-related information to help the auditor complete many audit procedures and steps. The information varies from TSO to TSO, depending if the information is available from outside sources such as provincial property assessment databanks.
All TSOs have a V-Day databank of sales information and listings. This information is generally kept in the enquiries area or within the REA section and is available to the public.
Real Estate Appraisal and Business Equity Valuation reports
The type of REA or BEV report prepared varies depending on the factors surrounding the case or specific requirements. For example, narrative reports are prepared for court proceedings due to the detail of documentary audit evidence required. In other cases, REA may prepare a short form or consultative report or BEV may prepare an estimate valuation report. It is important for the auditor to disclose the specific details or special requirements at the time of the request so that the REA or BEV report meets the requirements of the requesting area.
Real estate appraisers and business equity valuators are members of professional associations. These associations set and administer certain procedural and reporting standards that the members must follow. The CRA real estate appraisers and business equity valuators are also bound by these standards and so, they work and issue reports according to the accepted standards and practices of their respective professional associations.
Completion time for a real estate appraisal or business equity valuation
The time to complete a BEV or REA depends on the nature and complexity of the request. The auditor should discuss timelines with the real estate appraiser and business equity valuator when the referral is made. The section team leader (or real estate appraiser/business equity valuator assigned to the file) may be contacted for a status report on Forms T104R, Request for appraisal assistance, and T104V, Business equity valuation requisition. If the request is complex or the property is in a remote area or outside Canada, there may be a delay.
Refusal of real estate appraisal or business equity valuation request
If a BEV or REA is requested and rejected, Forms T104R, Request for appraisal assistance, and T104V, Business equity valuation requisition, are returned to the originator within 10 days of the request. The request for a REA or BEV may be rejected because of:
- not enough employees;
- current workload levels;
- low potential; or
- taxpayer's value accepted as declared.
The auditor is usually informed before the REA or BEV is completed when a taxpayer's declared value is considered reasonable or the file has low potential. If the auditor is satisfied that there are no material differences, the auditor should accept the real estate appraiser or business equity valuator's recommendations by accepting the value declared by the taxpayer.
However, if a request is refused for other reasons and the auditor and team leader are not satisfied with the taxpayer's declared value, refer the matter to the ADA.
Recording of income and tax changes on AIMS screen 6
Income and tax change must be recorded in AIMS for income tax audits. The codes are:
- Real Estate Appraisals – Current: 304 income change and 310 tax change;
- Real Estate Appraisals – Future: 306 income change and 312 tax change;
- Business Equity Valuations – Current: 301 income change and 307 tax change; and
- Business Equity Valuations – Future: 303 income change and 309 tax change.
These codes are recorded on AIMS screen 6 and are memo entry codes that do not offset or replace the auditor's present and future tax or income changes recorded on the same case. The appraisal and valuation changes are recorded under the AIMS File No. included by the auditor on referral Forms T104R, Request for appraisal assistance, or T104V, Business equity valuation requisition. If a separate principal or secondary file needs to be closed, the auditor informs the real estate appraisal or business equity valuation section before doing so. This allows a new "Supp. No." to be created, so that any income or tax change is recorded to the correct audit file.
The real estate appraisal / business equity valuations section closes related supplementary files before the case is closed by Audit.
Disagreements about value
When the real estate appraiser or business equity valuator has completed the work, a report will be prepared for the auditor, which will include a conclusion of fair market value (FMV). The auditor will use this value in the proposal to the taxpayer.
The areas of REA and BEV are not an exact science. Therefore, taxpayers or their representative may have an opinion of the value that differs significantly from the value determined by the CRA real estate appraiser or business equity valuator.
Some valuation components determined by a business equity valuator are subjective and, therefore, a business equity valuator may know before issuing the valuation report to the auditor that the taxpayer disagrees with the value. The business equity valuator may have already received and considered more information from the taxpayer.
Because the FMV calculated is required to apply a particular section of the Act, the real estate appraiser or business equity valuator will not negotiate the value for settlement. If the taxpayer disagrees with the auditor’s proposal and in particular the FMV that has been determined by REA or BEV, the auditor should contact the real estate appraiser or business equity valuator to discuss the reasons for the taxpayer’s disagreement. If at this stage, the taxpayer produces more information, the real estate appraiser or business equity valuator will review the information and inform the auditor as to the impact, if any, on the value conclusion. If the auditor meets with the taxpayers or their representative to discuss the disagreement in value, the real estate appraiser or business equity valuator is available to inform about the areas of contention in the value conclusion.
Request for a copy of appraisal or valuation by the taxpayer
If the taxpayer asks for a copy of the real estate appraisal report or the business equity valuation report, the auditor should give a copy to the taxpayer after discussing the issue with the real estate appraiser or business equity valuator. Some information referenced within the reports might not be able to be released because of confidentiality concerns, and will need to be addressed before its release.
As well as GST/HST, excise tax and/or excise duty is applied to certain products manufactured or produced in Canada. These levies are applied to a limited range of goods at different rates and in different ways, depending on the product or the product's use.
Excise tax is imposed at the time of delivery to a purchaser. Excise taxes apply on insurance premiums for contracts of insurance with unauthorized insurers, motive fuels, fuel-inefficient vehicles, and automobile air conditioners under Parts I and III of the Excise Tax Act.
For more information, go to the Excise Tax, N15 and Air Travellers Security Charge Audit Manual.
Excise duty is imposed at the time of manufacture. Wine, spirits, and tobacco products are subject to excise duty under the Excise Act, 2001, while beer is subject to excise duty under the Excise Tax Act.
The Excise Duties and Taxes Division of the Legislative Policy and Regulatory Affairs Branch is responsible for the audit of excise licensees and registrants. The Division is also responsible for the audit of registrants under the Softwood Lumber Products Export Charge Act, 2006. This Act imposes a charge on certain exports of softwood lumber products to the United States.
For information on excise duties or the softwood lumber export charge, visit Excise Duties and Taxes Division.
For more technical information, go to:
The letter templates are available in the Integras Template Library. Please refer to the library for the current version.
The letter templates are also available at Letters (CRA Electronic Library > Domestic Compliance Programs Branch / International, Large Business and Investigations Branch Reference Material > Audit > Income Tax - Forms and Letters > Letters). If there are changes to the letters, the templates in the CRA Electronic Library are updated when the library material is published, usually every two months.
There are two versions of the letters: electronic and paper.
Use the electronic version to write to the taxpayer or their representative through Audit enquiries in the My Account, My Business Account (if a T2 audit), or Represent a Client portals. Otherwise, use the paper version.
There are differences between the electronic and paper versions of the letters. In the electronic version:
- the first line of the letter is right-justified and reads: SENT BY AUDIT ENQUIRIES
- the three blank lines before the date are deleted since there’s no letterhead
- links are attached to the website title, webpage title, and publication number and title
- paragraphs with a link are sometimes rephrased to remove repetitive text
- the signature space is reduced to one blank line since there is no signature
To identify the electronic version, the filenames include ED (electronic document) between the letter’s number and title; for example, A 12_1_3 ED Proposal – Disallow Farm Loss. There is no change to the paper version filenames.
Loss determination or redetermination letter for the purposes of the ITA
To: REVENUE CONTROLS
From: Compliance Programs Branch, TSO
Attention: Assessment Control, TC
Re: Loss determination or redetermination
Please issue Form T67AM, Notice of determination/redetermination of a loss to:
Name of taxpayer:
Net capital loss:
Restricted farm loss:
To determine if the taxpayer accounts for taxable benefits according to legislation.
Use these procedures as a guideline. Other benefits may become evident during the audit. Consult the Employer Compliance Audit Program when there is doubt about the tax status of a particular benefit.
|Type of organization:
|Names of shareholders:
|Number of years in operation:
|List major products or services.
|Where is the payroll prepared?
|Who prepares the payroll?
|Briefly describe how travel expenses are handled:
|Vehicle and vehicle allowance benefits
|| WP Ref
|1.||Are vehicles available to shareholders and/or employees? If yes, describe how benefits are calculated.
|2.||Is a log of mileage kept?
|3.||Was GST/HST remitted on any taxable benefits?
|4.||Is any other type of vehicle available to shareholders and/or employees (for example, boat or aircraft)?
|5.||Were any vehicle allowances paid to employees? Were the allowances paid based on mileage or flat rate by month/week/day?
|6.||Were any input tax credits (ITCs) claimed on reimbursements?
|Parking provided by the employer
|7.||Did any employees receive parking space from the employer at no cost to the employee?
|Interest-free, low-interest, and forgiven loans
|8.||Were any interest-free or low-interest loans made to employees or shareholders?
|9.||Were any loans forgiven on termination or retirement?
|Stock purchase options
|10.||Does the employer offer any stock purchase or incentive plans? Detail if it applies.
|11.||Were any stock options exercised or disposed of during the review period? Detail if it applies.
|12.||Is any benefit reported?
|Incentives, holidays, or prizes
|13.||Are any incentives and/or awards available to employees or shareholders?
|14.||Does the taxpayer own any vacation properties? Detail if possible.
|15.||Does the taxpayer have a sports box?
|16.||Does the taxpayer give employees tickets to sporting and/or cultural events?
|17.||Are any gifts claimed as an expense by the taxpayer? List any and all gifts that may be taxable, including the names of recipients.
|18.||Are employees given long service awards? Detail if it applies.
|19.||Were any relocation expenses paid to employees during the review period? List recipients if it applies.
|20.||Are expenses reimbursed based on vouchers?
|21.||Is there a flat unaccountable allowance?
|Insurance plan premiums
|22.||Are any life insurance premiums paid by the taxpayer? Detail if it applies.
|Wage loss replacement plan
|23.||Does the taxpayer have any wage loss replacement plan? Detail if it applies.
|Rent-free or low-rent housing or board
|24.||Is any rent-free or low-rent housing or board available to employees?
|25.||Did the taxpayer pay any remote work site or northern allowances?
|Retirement payments and allowances
|26.||Were any retirement payments or allowances made during the review period?
|27.||Were any termination payments made during the review period?
|Employer contributions to registered retirement savings plans
|28.||Were any contributions made to registered retirement savings plans (RRSPs) by the taxpayer during the review period?
|Travel and meal allowances
|29.||Were any unaccountable travel allowances paid to employees?
|30.||Were any unaccountable meal allowances paid to employees?
|Tuition fees, scholarships, and bursaries
|31.||Were any tuition fees reimbursed to employees or paid by the taxpayer for the employee?
|32.||Was Form T4A, Statement of pension, retirement, annuity, and other income, prepared for any payments?
|33.||If it applies, get employer policies for:
Personal expenses paid by the employer
|34.||Is there any audit evidence of asset purchases or incentives that may be for personal use? Detail if it applies.
|Other services provided by the employer
|35.||Were any services such as limousine, club membership, or dues paid by the employer for the employee?
|36.||Does the employer provide or subsidize any recreational facilities?
|37.||How does the employer handle frequent flyer programs?
|Is a referral to the Employer Compliance Audit Program warranted?
|Type of organization:
|Names of shareholders:
|Number of years in operation:
|Description of products/services:
|| WP Ref
|Were any material credits that offset the assessment noted (for example, maximize CCA, business-use-of-home expense, or other credits)?
|Have credits been applied to the related reporting period to correctly calculate penalty and/or interest?
|Have outstanding credits or refunds on the taxpayer's account been applied to reduce the amount payable (for example, GST/HST refund, income tax refund, or source deductions)?
||Auditor's Name:||AIMS Case #
|Transferor Name:||Account Number:||AIMS File #
|Transferee Name:||Account Number:|
|Step||Reference||Action Required||Action Completed|
|1.||Type of Election:
a) Form T2057
b) Form T2058
Administration of Elections:
If yes, continue to step 3.
|IC 76-19R3, par 15-22
If no, contact transferor for payment.
c) Later than late?
If no, contact transferor for payment.
Complete a Recommendation Report.
If yes, continue to step 3.
Subdiv c & Sec 69
If no, contact transferor for payment.
Complete a Recommendation Report.
Was the election approved?
If yes, continue on to step 3.
Subdiv c & Sec 69
a) Have the prescribed forms been signed and filed by all parties (for T2058, all partners must sign)?
|b) Is the transferee a Taxable Canadian Corporation?
|c) Does the consideration issued to transferor include at least 1 share?
d) Was the share(s) issued on the date of the election?
(i) If no, is there is a written agreement between transferor & transferee that required the transferee to issue the required share(s) by that date? Request a copy. OR
|e) Are the shares authorized (a special resolution) & issued
(shared register)? Request copies.
f) Is the transferor allowed to transfer the property? Refer to the 4 conditions below.
i) Transferor is a Canadian resident taxpayer - all eligible property per subsection 85(1.1) can be transferred.
|4.||Valuation / Appraisal required?
a) Should the FMV of property transferred be referred?
|b) Should the FMV of non-share consideration (other than money or debt) be referred?
|c) Should the FMV of share consideration be referred (there are unusual terms and conditions)?
|d) Should the ACB of property transferred be referred (has the property been owned since V-day or was it acquired non-arms length)?
|5.||Determine the AA & POD of property transferred by applying the following:
a) General Test: The FMV of the property transferred & FMV of the NSC (remember that debts securities are allocated to specific assets)
IT 291, par. 17
|b) Specific Tests: Based on the type of property transferred.
|c) Tiebreaker: The greater of the General Test & Specific Test limits.
|d) Gifting: Increases the AA, except for paragraphs 85(1)(g) & (h).
|6.||Rules/reminders for transferring specific properties
a) Ensure that inventory is not real property.
|b) Ensure a section 22 election was not previously filed for Accounts Receivables.
||Sec 22 & IT 188
c) Ensure that 'ineligible' properties were not included in the rollover/election.
If yes, ignore for sec 85 and if it was disposed of, determine the capital gain.
Subdiv c & Sec 69
|d) Ensure that 'intangible' properties (e.g.: goodwill) have been included in the election in situations where the transferor is transferring all or substantially all of his business assets
e) Where depreciable properties are being transferred, determine if all the properties in a class are being transferred.
If the taxpayer retained some of the properties in a class, has a terminal loss been claimed for that class?
f) When depreciable property is transferred, consider:
(i) the order of assets transferred
Ss 13(21.2) & Par 13(7)(e)
|g) Is the PUC [Par 89(1)(c)] of the shares transferred greater than the final AA minus the FMV of the NSC?
|h) If eligible capital property is transferred, consider subsections 14(3) & (12).
i) Is there a PAC in the conditions of share consideration?
If yes, consult with a technical advisor on legal effectiveness.
|7.||Rules/Reminders for all Elections:
|a) Has there been a change in control?
|b) Can the transfer be regarded as a dividend strip?
|c) Can the transfer be regarded as an avoidance transaction?
||Ss 245(2) & 55(2)
d) Is the property transferred to a non-affiliated person?
Is the AA < FMV?
Has the non-affiliated person disposed of the property, or made arrangements to dispose of the property, within 3 years from the date of the rollover?
Did the non-affiliated person benefit from this series of transactions by being able to utilize losses, capital gains deduction or any other outlay or deduction to reduce taxable income or tax payable?
If yes to the above, consider the application of subsection 69(11) and consult with local Tax Avoidance section.
|e) Consider thin capitalization rules if the transferor is a non-resident and debt is issued as consideration.
|f) Consider section 116 (issuance of a certificate of compliance) if the transferor is a non-resident. Discuss with International Audit.||Sec 116
|8.||GST/HST Issues or Considerations:
|a) Is the transferor registered for GST/HST purposes?|
|b) Is the transferee registered for GST/HST purposes?
|c) Is a business, as defined in the ETA, being transferred by this rollover?
||ETA, Sec 123
d) Has a section 167 election been made? This election is not allowable if:
i) the property is not used 90% or more in a commercial activity of the transferee?
ii) less tan 90% (all or substantially all) of the assets of the
iii) the transferor is a registrant and the transferee is not.
iv) the transferee is not a registrant and the asset to be transferee is real property. GST/HST will apply to the supply of the real property.
(v) the assets are not supplied (transferred) from:
(A) a business or part of a business which was established and carried on by the transferor, or
(vi) the asset transferred is a supply of a property by way of lease, licence or similar arrangement
ETA, Sec 167
ETA, Ss 167(1.1)
ETA, Ss 167(1.1)
|e) If no section 167 election is made - is this a non-arm's length transaction? Did the transferor charge GST/HST on the FMV of the property?
||ETA, Sec 165
f) A GST/HST assessment should be raised if:
(i) A transferee claimed an ITC on the property rolled over and a section 167 election was made for the same property.
(ii) The transferor did not remit the GST/HST on the transfer of the property and no election was made.
|g) Consult a Technical Advisor or Team Leader if you are unsure if there are GST/HST issues or if you have questions with regard to the transfer.
This topic is an overview of CORTAX and gives users information sources to enhance the content and use of CORTAX.
CORTAX is a processing system that assesses taxes, penalties payable, and refundable tax credits for corporate income tax returns. CORTAX replaces the Corpac Departmental Contact System (CORPAC) and gives online access to all data for T2 assessments.
The options on the T2 CORTAX Enquiry Menu include information the taxpayer gave on TYE 1993 and later income tax returns, as well as on TYE 1993 and earlier year returns processed by CORTAX.
The CRA requires that notes to financial statements be sent to the General Index of Financial Information for Corporations (GIFI). Notes to financial statements sent electronically with the return are available on CORTAX consultation screens.
Given the high cost of transcribing paper return notes sent by taxpayers, these notes are not available on CORTAX consultation screens.
If needed, ask for the notes through the TC using the online document loading system. These notes are included in the documents received when a return is requested.
Use the T2 CORTAX Enquiry Menu screens to view information in the CORTAX database.
A quick procedure is attached to help Option RR.6 users to view and navigate the screens.
A series of selections must be made on several screens before the T2 CORTAX Enquiry Menu screen is displayed.
To access the T2 CORTAX Enquiry Menu, follow these instructions:
Single Logon Panel Screen or TPX Menu
The TPX menu is displayed when the session opening procedure is completed on the Single Logon Panel (SLP) screen. This screen gives access to all internal systems, and is used to select any viewing or work subsystem.
From the SLP screen or the TPX menu, select CORTAX, by keying:
- S beside the selection in the action column, or
- the mnemonic code CORTX on the command line,
and press ENTER.
S CORTX CORTAX System Command ==> CORTX
SA / T2 Main Menu
The next screen displayed is the SA / T2 Main Menu.
To view the menu in French, press PF5.
From this screen, select the T2 CORTAX Menu, by keying:
- S beside the selection in the action column, or
- the selection number (4), or
- the mnemonic code T2MEN on the command line,
and press ENTER.
S 4. + T2MEN T2 CORTAX Menu
Command ==> 4 or T2MEN
T2 CORTAX Menu
You have now accessed the T2 CORTAX Menu. From this screen, select the Enquiry Menu option, by keying:
- S beside the selection in the action column, or
- the number (1), or
- the mnemonic code T2DEM on the command line,
and press >ENTER.
S 1. + T2DEM Enquiry Menu
Command ==> 1 or T2DEM
You now have access to the Enquiry Menu, which gives access to options, including:
S 1. RSD Return and Schedule Display
_ 2. TYE Taxation Year-end Table
_ 3. BAL Balance Verification
_ 4. HIST History of Line Changes
_ 5. EDI Electronic Data Interchange
_ 6. AGRE Agreements Filed Independently
_ 7. MISC Miscellaneous Information
_ 8. HYPOCAL Hypothetical Calculations
Make a selection.
Command ==> 1 or RSD
When you select one of these options, it displays the taxpayer's T2 corporation income tax return information.
Before viewing specific information, fill in:
- the BN (business number) field; that is, the corporation's account number; and
- the TYE (tax year-end) field that is, the return's year-end.
For the TYE field, use the YYYY-MM-DD format. A list of choices is available, as shown by the + symbol. To access the list, place the cursor on the input field or on the + symbol, and press F4.
After confirming that the BN, taxpayer's name, TYE, and the version on the screen are correct, press ENTER. A list of all the schedules for this version is displayed on the screen.
Navigate through the T2 CORTAX Enquiry Menu screens and information on each page. Since these screens are used only to get information, no action can be taken on them.
T2 CORTAX Enquiry Menu
- Profile: G2430#OC
- Users: Auditors, CORTAX coordinators, and employees who also need to view corporate assessing or reassessing data. See Note 1.
- Operational significance: T2 and schedules including GIFI, tax year-end table, balance verification, history of line changes, electronic data interchange (EDI) which shows the transmission date of returns filed and details about problems with electronic transmission of returns
Standardized Accounting (SA) System
- Profile: G2430#UE
- Users: Auditors and employees who also need to view corporate account data
- Operational significance: Corporate accounts receivable
Business Client Communication System (BCCS)
- Profile: G2430#OC
- Users: Auditors and employees who need to view TC communications to taxpayers
- Operational significance: TC communications with corporations including notices of assessment and reassessment
Business Number (BN) System
- Profile Creation Form: "A", four-digit responsibility centre of your TSO, the "#" sign, and the letters "AV"
- Users: Auditors and employees who also need to view corporate data
- Operational significance: Business number and tombstone information
T2 CASE Management System for CORTAX
- Profile: G2440#IM
- Users: Audit Divisions and SR&ED CORTAX coordinators
- Operational significance: TC computerized system for controlling the work done by this system and for asking for work from TSOs
- Profile Creation Form: A"; the four?digit responsibility centre of your TSO; the "#" sign; and the letters "HD"
- Users: The CORTAX reports profile is established for SR&ED CORTAX coordinators and SR&ED audit team leaders in the TSOs
- Operational significance: Only a report of interest to Audit Divisions: the RPT100 report, Non Refundable SR&ED Initial Assessment, list of corporations claiming the unrevised SR&ED before assessment
Office Workload Organization System (ORG)
- Profile Creation Form: "A", the four?digit responsibility centre of your TSO, the "#" sign, and the letters "FX"
- Users: CORTAX coordinators. See Note 2.
- Operational significance: Allows CORTAX coordinators to update information in ORG on their users and their own information. Auditors must be registered in ORG to use central computer printers
- All profiles are provided and administered by the VCAs or DCAs in the TSOs.
- Audit Division CORTAX coordinators and the SR&ED CORTAX coordinators have profiles G2430#OC, G2430#UF and G2440#IM and ORG profile accesses.
- Audit managers have profiles G2430#OC and G2430#UF.
- SR&ED audit program team leaders in TSOs have profiles G2430#OC and G2430#UF and the profiles for CORTAX reports.
- SR&ED CORTAX coordinators have CORTAX report profiles.
Note 1: Users such as SR&ED auditors, Science Officers and Audit Division CORTAX coordinators who, in carrying out their duties, need to view corporate assessing data.
Note 2: The names of the Audit Divisions CORTAX coordinators and the SR&ED CORTAX coordinators are entered into ORG by HQ. ORG interacts with the T2 CASE Management System for CORTAX to manage the assignment of employee tasks. Do not assign this profile to an auditor unless they are also a CORTAX coordinator.
For the glossary for the T2 Assessing Case Management System (CMS), used to manage the work in progress in the T2 assessing workflow, go to T2 Assessing Case Management System (CMS).
For information on CORTAX, all Audit Division employees using CORTAX, including CORTAX coordinators, may go to learning product TD4403-000, CORTAX.
The learning product shows how to:
- view T2 data from the T2 CORTAX Enquiry screens
- view communication items in the Business Client Communication System (BCCS)
- use the T2 Assessing CMS to manage TC referrals to TSOs
- use the many CORTAX features to make work easier
- print returns, schedules, and communication items
Learning product TD4403, CORTAX, includes these topics:
- T2 CORTAX Enquiry Menu
- Business Client Communication System
- T2 Assessing Case Management System
- system features
- CORPAC/CORTAX Comparison Chart
- other reference material
For more information, consult the CORTAX coordinator, the GIFI coordinator, and the EFILE coordinator in your TSO.
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