Tax and Revenue Administration Fuel Tax Act Information Circular PRO-4R2

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.

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 under the Fuel Tax Act to conduct inspections and audits of propane retailers' records to determine whether the fuel tax has been properly collected and tax-out sales have been properly recorded. A retailer selected for audit must make his records available to the auditor for inspection.

2. The provisions of the Fuel Tax Act are enforced by the Royal Canadian Mounted Police, municipal police forces, Alberta Gaming and Liquor Commission staff, and TRA staff. Enforcement activities include random sampling of totalizer readings by TRA auditors and, upon request by TRA, by propane distributors when delivering propane.

Prosecutions

3. A retailer who makes, assents to, or conspires with another person to make false statements or false or deceptive entries in records, or destroys or alters records, or wilfully evades compliance with the Fuel Tax Act or Regulations, is guilty of an offence and is liable, upon conviction, to a fine of up to 300 percent of any amount lost by TRA as a result of the offence.

4. A retailer who fails to provide information, or who fails to maintain records and books of account when required to do so, is guilty of an offence and is liable, upon conviction, to a fine of $50 for each day of default.

5. A retailer who contravenes a provision of the Act for which no other penalty is specified is guilty of an offence and is liable, upon conviction, to a penalty of:

• for a first offence, a fine of up to $1,000 and/or a jail term of up to one month;
• for a subsequent offence, a fine of up to $5,000 and/or a jail term of up to six months.

Interest and Penalties

6. Interest is charged on any overdue amounts owing to TRA. This includes excessive refunds that have been claimed by a retailer. The interest rate used is the same as the debit interest rate calculated for purposes of the Alberta Corporate Tax Act.

Current interest rates can be obtained by calling TRA or from our Internet site.

7. 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.

Tolerances

8. In the course of an in-office review or field audit, small discrepancies may be identified. To avoid time-consuming revisions, a specific tolerance has been adopted. No disbursement will be made or collection action taken if the amount involved is $20.00 or less. Propane retailers should not send refund applications to TRA if the refund claimed is less than $100.00.

Objections and Appeals

9. The Tax Services Branch of TRA has the responsibility of considering objections to any of the following actions:

• an assessment or reassessment of fuel tax, interest or penalties;
• the refusal to pay a refund of fuel tax; and
• the refusal to register or cancellation of a registration of a producer, distributor or retailer.

10. A separate notice of objection must be completed in the prescribed form for each action to which objection is taken within 90 days of the day of mailing of the notice of the action leading to the objection. Notices of objection may be personally delivered or sent by certified mail, registered mail, fax, or courier to:

TAX SERVICES BRANCH
TAX AND REVENUE ADMINISTRATION
9811 109 STREET
EDMONTON AB T5K 2L5

Fax: (780) 427-0348

11. 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.

12. Notice of objection forms can be obtained from our website, or by calling 427-3044 (Edmonton calling area) or 310-0000/(780)427-3044 (Alberta toll free).

13. 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 the 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 leading to the appeal or confirm or reverse the refusal or cancellation leading to the appeal. 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.