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Attention: XXXXXXXXXX
Dear Sirs:
RE: Technical Interpretation
This is in reply to your letter dated September 4, 1992, requesting a clarification of the administrative position outlined in paragraph 14 of Interpretation Bulletin IT-138R. We apologize for the delay in replying to your request.
You asked how a change from the method of claiming expenses incurred personally by a member of a partnership for the fiscal period of the partnership may be effected to the method of claiming for the calendar year. You wish to know what mechanism will be acceptable to Revenue Canada without offending the tolerance which is extended as a matter of administrative policy.
Generally, if a partnership agreement requires certain expenses to be paid by the partner, the Department expects a method of reporting, once adopted, to be followed consistently by a taxpayer. Any taxpayer wishing to change from either method should submit a written request to their District Taxation Office explaining the reasons for the request and the method to be followed in making such a change. Unless the change made and the method chosen result in tax being avoided, it is unlikely that the Department would oppose a change from the partnership fiscal period method to the calendar year method.
We trust these comments will be of some assistance.
Yours truly,
for Director Manufacturing Industries, Partnerships and Trusts DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch