Principal Issues: When are advance income tax ruling fees due?
Position: 30 days after invoice is issued.
Reasons: Fees are billed under the authority of the Advance Income Tax Ruling Fees Order whether or not the request for the ruling is withdrawn. Section 155.1 of the Financial Administration Act provides for the imposition of interest in accordance with the related regulations. Under the definition of "due date" in section 2 of the Interest and Administrative Charges Regulation, the due date, unless provided for otherwise, is 30 days after the day on which a demand for payment is issued.
XXXXXXXXXX Chartered Accountants XXXXXXXXXX 2011-041464 Toronto ON XXXXXXXXXX
Attention: Mr. XXXXXXXXXX
Chief Executive Officer and Senior Partner
PERSONAL AND CONFIDENTIAL
July 29, 2011
Dear Mr. XXXXXXXXXX :
RE: Outstanding Advance Income Tax Ruling Invoice
Please note that the invoice relating to the XXXXXXXXXX advance income tax ruling remains unpaid. Mr. XXXXXXXXXX of your Vancouver office requested the ruling on April 17, 2008. Work on the file was completed, but we were not prepared to issue a favourable ruling; whereupon, the ruling request was withdrawn and the file was closed. Mr. XXXXXXXXXX was advised accordingly by letter dated March 24, 2009. Our fees in the amount of $XXXXXXXXXX were subsequently billed by invoice numbered XXXXXXXXXX , which was issued on March 30, 2009. The fees were calculated in accordance with the rate prescribed in Advance Income Tax Ruling Fees Order, SOR/90-234. Follow-up on the outstanding invoice consisted of payment reminder letters, which were sent to the XXXXXXXXXX on a monthly basis in care of the Vancouver office.
As at July 13, 2011, payment is overdue by 805 days. The outstanding current balance is $XXXXXXXXXX , which amount includes interest of $XXXXXXXXXX calculated to June 30, 2011 being the date on which the last monthly reminder letter was sent to your Vancouver office. In this regard, please note that interest calculated in accordance with section 155.1 of the Financial Administration Act, R.S.C. 1985, c. F-11 and the Interest and Administrative Charges Regulation, S.O.R./96-188 accrues on all fees that are outstanding 30 days after the date an invoice is issued.
The issue of outstanding fees has been brought to the attention of the tax community at a number of public meetings in the last couple of years. Accordingly, please treat this as our final notice. Payment in full in the sum of $XXXXXXXXXX , which includes interest, is hereby demanded by no later than August 31, 2011. Failure to remit that amount will result in a Statement of Claim being filed against your client in the Federal Court of Canada.
Furthermore, beyond that date and until the outstanding fees and related interest are paid, no requests from XXXXXXXXXX for advance income tax rulings or for technical interpretations will be considered. Likewise, all further work on any of the firm's existing requests for advance income tax rulings would be held in abeyance until the outstanding arrears were paid in full.
Needless to say, it would be preferable if such consequences could be avoided; hence, it is trusted that this matter can be resolved without further delay. Should you have any queries or require additional information, please do not hesitate to contact the manager of our Insolvency and Administrative Law Section, Mr. Bob Skulski, who may be reached at 613-957-9767. Meanwhile, attached for your perusal is a copy of the outstanding invoice.
Yours truly,
Wayne Adams
Director General
Income Tax Rulings Directorate
Attach.