Principal Issues: Whether the T5013 Summary and all the related T5013 information slips are prescribed information returns for purposes of subsection 229(1).
Position: Yes.
Reasons: The information is required by paras. (a) to (f) of subsection 229(1).
January 17, 2011
Assessment and Benefit Services Branch Headquarters
Business Returns Directorate Income Tax Rulings Directorate
Richard Aronoff
Attention: Rob Bledig, Manager (613) 941-7239
Specialty Business Returns Section
2010-038370
Late Filing Penalties for Partnerships
This is in response to the email from Craig Osborne concerning the applicability of late filing penalties for partnerships that fail to file an information return as and when required under the Income Tax Act (the "Act") and the Income Tax Regulations (the "Regulations").
The requirement for partnerships to file an information return is contained in subsection 229(1) of the Regulations, which provides as follows:
Every member of a partnership that carries on a business in Canada, or that is a Canadian partnership or a SIFT partnership, at any time in a fiscal period of the partnership shall make for that period an information return in prescribed form containing the following information: ...
Subsection 229(2) of the Regulations provides that the filing of a partnership information return by one of the members of a partnership will satisfy the requirement under subsection 229(1). Subsections 162(7), (7.01), (7.1), and (8) of the Act set out late filing penalties for the failure to file the required partnership information returns as and when required.
The term "prescribed" is defined in paragraph 248(1)(a) of the Act to mean, "in the case of a form, the information to be given on a form, authorized by the Minister." Subsection 244(16) provides that "every form purporting to be a form prescribed or authorized by the Minister shall be deemed to be a form authorized under this Act by the Minister unless called into question by the Minister or by a person acting for the Minister or Her Majesty."
In our view the T5013 Summary "Information Return of Partnership Income" as well as each and every related T5013 "Statement of Partnership Income" information slip for the respective partners constitute separate prescribed information returns for the purposes of subsection 229(1). The information required to be reported on these returns is mandated by paragraphs 229(1)(a) to (f). Consequently, the failure to file the T5013 Summary or any of the T5013 information slips will attract one or more of the above mentioned late filing penalties in section 162.
While the foregoing represents the CRA's interpretation of the law, it is recognized that there may be unusual circumstances where discretion might need to be exercised in the application of the penalty provisions to a partnership and its partners. Factors to consider might include the following: the number of partners in the partnership; the compliance history of the partnership in terms of non-filings or late filings, and the circumstances of the particular case.
Should you have any questions or require clarification, please do not hesitate to contact Richard Aronoff at the number provided above.
B.J. Skulski
Manager
Insolvency and Administrative Law Section
Income Tax Rulings Directorate
c.c. Craig Osborne, Senior Programs Advisor
Specialty Business Returns Section
Holly Carswell, Senior Policy Advisor
Legislative Policy Directorate