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The Canada Revenue Agency (CRA) has reassessed Lake Shore Gold Corp. to deny certain Canadian exploration expenses (CEE) that were renounced effective December 31, 2014. This reassessment affects all flow-through limited Partnerships that purchased Lake Shore Gold Corp. in 2014, including both MRF 2014 Resource Limited Partnership and Discovery 2014 Flow-Through Limited Partnership.
Pan American Silver Corp. (“Pan American”), the parent company of Lake Shore Gold Corp., has decided to appeal the CRA’s reassessment. As the appeals process will take some time to resolve, we encourage all investors of MRF 2014 and Discovery 2014 to follow the steps listed below to ensure they are able to recover all amounts owed to them.
 
Recommended Steps
 
1. Pay the accrued tax and interest noted on the CRA’s Notice of Reassessment – this will stop interest from accumulating on the outstanding balance during Pan American’s appeal process.
   
2. File a Notice of Objection (T400A Form) within 90 days of the date noted on the Notice of Reassessment. Failing to file this form would prevent investors from being able to have the CRA restore their CEE and refund taxes and interest paid in the event that the dispute is successful.
   
  Below is a template that includes our recommended language for the reasons of objection. Investors will need to add the Date and Number of their Notice of Reassessment and their personal details before signing and submitting this.
   
  Notice of Objection (T400A Form) 
   
3. Include a Cover Letter with your T400A Form. Below is a recommended cover letter template that only needs personal details and a date to be added.
   
  Cover Letter 
 
How to File the Notice of Objection (T400A) and Cover Letter
 
There are two ways to file:
 
1. Mail the Cover Letter and Notice of Objection (T400A) to :
   
Taxpayers with a postal code starting with letters Mailing Address
A to P Canada Revenue Agency
Eastern Appeals Intake Centre
North Central Ontario TSO
1050 Notre Dame Avenue
Sudbury ON P3A 5C1
R to Y Canada Revenue Agency
Western Appeals Intake Centre
Fraser Valley and Northern TSO, 2nd Floor
9755 King George Blvd
Surrey BC V3T 5E1
   
2. In My Account by using the “Register my formal dispute” option
 
If Pan American is partially or entirely successful in challenging the CRA and investors have followed the steps to submit a Notice of Objection above, investors will receive a new Notice of Reassessment restoring all or a portion of the CEE previously renounced. In addition, the CRA would then refund all or a portion of the tax and interest paid.
 
If the appeal is unsuccessful, Middlefield will be seeking compensation from Pan American on behalf of investors of MRF 2014 and Discovery 2014 to offset the reduction in CEE.
 
For further information about filing an objection, please see the CRA’s website at File an objection – Income tax - Canada.ca
 
 
     
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