15 October 2007 External T.I. 2007-0239491E5 F - Prepayment of Reassessments -- summary under Subsection 161(1)

CRA stated that it:

accepts advance payments made by corporations in anticipation of a reassessment under the Act.

This allows the corporation to reduce its arrears interest expense pursuant to subsection 161(1). Under this provision, such interest charges accrue from the corporation's "balance-due date" (as defined in subsection 248(1)) for the particular taxation year, regardless of the date on which the Minister reassesses. …

[T[he CRA's position is also to accept advance payments made by individuals in anticipation of a reassessment under the Act. …

[U]nder subsection 152(3), the fact that no assessment has been made does not affect the taxpayer's liability for Part I tax.

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