An appeals officer rejected the taxpayer’s appeal of a reassessment by CRA to increase its closing inventory for Year 1. Can a reassessment be made under s. 152(4.3) to make a consequential redetermination of its opening inventory for Year 2 (an otherwise statute-barred year), thereby increasing its cost of sales for Year 2? CRA responded:
[T]he request to adjust the tax payable for Year 2 by changing the opening inventory balance can reasonably be considered to relate to the change in the "balance" of the taxpayer in Year 1.
…[A] consequential assessment could therefore be issued under subsection 152(4.3) to reflect the tax payable as a result of an adjustment to the opening inventory balance for Year 2, so that it is consistent with the Year 1 year end inventory balance, as determined by the reassessment.