Background
Under subsection 164(1) of the Income Tax Act, a
corporation must file its tax return within three years of the end
of the taxation year to be entitled to receive a tax refund, should
one arise on assessment by the Canada Revenue Agency. The harshness
of tax refunds being statute-barred for corporations, if a tax
return is not filed three years after the end of the taxation year,
has been the subject of commentary for several years, including a
recent written submission by CPA Canada to the Department
of Finance.
The only avenue a corporate taxpayer has to get at least partial
relief when a tax refund is statute-barred under subsection 164(1)
is to ask the Minister of National Revenue under section 221.2 of
the Income Tax Act to take the credits in the corporate
income tax account that cannot be refunded with a payment, and
apply them to another tax debt that is payable or will become
payable by the corporation, i.e., to apply the credits to
the
