Toronto district Office Specialty Rulings
Mr. P. St. Laurent Directorate
Chief, Audit Division D.Yuen
(613) 957-2111
Attention: G. Cappella
Audit Review Section
148-2-1 900293Subject: Section 80
IT-293R , Paragraph 6
Pursuant to a telephone conservation of April 4, 1990 (Cappella/Yuen), you have requested our comments as to the Department's interpretation of the last sentence in paragraph 6 of IT-293R .
It is our view that this sentence describes the Department's position that the words "settled or extinguished" as used in section 80 mean the final extinguishment of the debt by any legal means, such as payment, cancellation, set-off, substitution of debtors and release. In the case of a creditor who has lost his remedy or right to sue for payment of a debt by virtue of the expiration of a limitation period under a statute, the creditor's right to the amount of the debt lost and the debt has not been settled or extinguished. The creditor may still obtain extra-judaical satisfaction of the debt, for example by set-off or payment. The relevant statute would have to be reviewed to determine whether the particular Act bars the remedy or right to sue and extinguishes the debt.
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