Tax and Revenue Administration Fuel Tax Act Information Circular BD-6

Note: Due to the Government of Alberta reorganization in November 2004, where applicable, the web versions of our documents have been updated to change references from "Minister of Revenue" or "Provincial Treasurer" to "Minister of Finance". References to "Revenue Canada" or "Canada Customs and Revenue Agency" have been changed to "Canada Revenue Agency" to reflect that name change as well. The paper version of this document is available from Tax and Revenue Administration and if applicable, will be updated as time permits.

ALBERTA FUEL TAX ACT INFORMATION CIRCULAR - BULK DEALERS
ADMINISTRATION

This information circular discusses the following topics:

• Audit and Enforcement
• Prosecutions
• Interest and Penalties
• Tolerances
• Objections and Appeals

Audit and Enforcement

1. Tax and Revenue Administration ("TRA") auditors are authorized by the Minister of Finance to conduct inspections and audits of bulk dealer records to determine whether fuel tax has been properly collected and Alberta Farm Fuel Distribution Allowance ("AFFDA") benefits have been properly provided and claimed. Bulk dealers selected for audit or inspection must make their records available to the auditor upon request.
   
   
2. The provisions of the Fuel Tax Act are enforced by the Royal Canadian Mounted Police, municipal police forces, TRA staff, Fish and Wildlife Officers, and Motor Transport staff. Enforcement activities include sampling fuel to uncover ineligible use of marked fuel, and investigating cases of suspected fuel tax evasion.

Prosecutions

3. Bulk dealers who fail to collect or remit tax, dye fuel when not authorized to do so, make false or deceptive entries in records, fail to file a return or provide information when required to do so, sell marked fuel to unauthorized purchasers, or in any other way contravene the Fuel Tax Act or Regulations, are guilty, upon conviction, of an offence.
   
   
4. Fines provided for under the Fuel Tax Act vary depending on the nature of the offence and whether it is a first or a subsequent offence. In some cases, maximum fines include a specified dollar amount plus an amount equal to three times the fuel tax and AFFDA involved, and a jail term.

Interest and Penalties

5. Interest is charged on any overdue amounts owing to TRA. This includes amounts which bulk dealers failed to pay to TRA on time, and amounts which bulk dealers received from TRA to which they were not entitled. See Table of Interest Rates for applicable debit interest rates.
   
   
6. In addition to interest, if an amount owed to TRA results from neglect, carelessness, wilful default, fraud or evasion, a penalty of 25 percent of the amount owing may be assessed.
   
   
7. In the case of commission agents, interest and penalties are assessed against the oil marketing company which supplies their fuel. In the case of independent bulk dealers, interest and penalties are assessed against the bulk dealer.

Tolerances

8. In the course of an in-house review or a field audit, TRA may find some very small errors. In order to avoid time-consuming revisions, specific tolerances have been adopted, and any potential assessments below the tolerance amount will not be issued.
   
   
9. In the case of an assessment, no disbursement will be made or collection action taken if the amount involved is $20.00 or less, unless a specific request for a refund is received.

Objections and Appeals

10. The Tax Services Division of TRA has the responsibility of considering objections to any of the following actions:
    
    
    • the issuance of an assessment or reassessment of fuel tax, interest or penalties;
    • the refusal to issue a fuel tax exemption or Alberta Farm Fuel Benefit registration number for the purchase of marked fuel;
    • the cancellation of an exemption or registration number for the purchase of marked fuel;
    • the refusal to pay a rebate of fuel tax or a fuel grant.
      
      
11. A separate notice of objection must be completed in the prescribed form for each action to which objection is taken and must be filed within 90 days of the day of mailing of the notice of the action leading to the objection. Notices of objection must be sent by certified mail, by registered mail or by courier to:
    
    TAX SERVICES DIVISION
    TAX AND REVENUE ADMINISTRATION
    9811 109 ST
    EDMONTON AB T5K 2L5
    
12. An appeals officer will review the objection and will either confirm, vary or reverse the assessment or reassessment, or confirm or reverse the refusal or cancellation. The objector will be advised of the decision.
    
    
13. Notice of objection forms can be obtained by calling (780) 427-3044 (Edmonton calling area) or 310-0000/427-3044 (Alberta toll free).
    
    
14. Objectors who are dissatisfied with the outcome of their objection may file an appeal with the Court of Queen's Bench within 90 days of the date of mailing of the response to the notice of objection. Also, any objectors who have not received a response from Tax Services within 90 days of the filing of a notice of objection may file an appeal with the Court of Queen's Bench. In both cases the appeal must be served on TRA and a copy must be filed with the Clerk of the Court. The Court may confirm, vary or reverse the (re)assessment or confirm or reverse the refusal or cancellation leading to the appeal, as the case may be. The Court may make an order relating to costs as it deems appropriate. The decision of the Court may be appealed to the Alberta Court of Appeal, and subsequently to the Supreme Court of Canada.