25 February 2000 Internal T.I. 2000-0001087 - Co-Researcher

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Does the work performed by an individual under a research grant at the University qualify as co-researcher?

Position TAKEN:

Income received by individual appears to qualify under 56(1)(o).

Reasons FOR POSITION TAKEN:

Par 29 ,IT-75R3

		February 25, 2000

	XXXXXXXXXX  TSO	HEADQUARTERS
	CPP/EI Rulings	C. Tremblay
		957-2139
	Attention:  XXXXXXXXXX
		2000-000108

Classification as a "Co-Researcher"

This is in reply to your memorandum of January 6, 2000, requesting our views on whether an individual who performed work at the University of XXXXXXXXXX is a co-researcher or an employee. You enclose a request for a ruling request by XXXXXXXXXX as to his employment status.

XXXXXXXXXX

Our Comments

In our view, since a review of the supporting documents relating to the research grant may be required, the TSO is in a better position to determine whether the relationship is that of researcher and co-researcher or researcher and employee. However, we have provided an opinion which is based solely on the letter and information supplied by XXXXXXXXXX, which you sent us.

The Canada Customs and Revenue Agency's (the "Agency") primary objective when reviewing amounts received by a faculty member is to ensure they are accurately characterized as either income from employment or a research grant. XXXXXXXXXX states that he was employed as a research associate to carry out independent medical research in order to generate new findings on the XXXXXXXXXX. He also states that he co-wrote the original application for funding. In our view, based on the information provided by XXXXXXXXXX, it would appear that he would meet the criteria of co-researcher as described in paragraphs 20 to 35 of IT-75R3. Further, according to the letter by XXXXXXXXXX, the direction by the researcher to XXXXXXXXXX is of a general or consultative nature, thus the relationship appears to support that of researcher to co-researcher and thus the payments made out of the research grants to the co-researcher would be a research grant. Where the co-researcher is a resident of Canada, the payments made out of the research award to the co-researcher is required to be included in his income under paragraph 56(1)(o) of the Income Tax Act and the co-researcher is entitled to deduct those expenses , including capital expenses, incurred for the purpose of carrying on the research (up to the amount received in the year from the research grant) except those expenses that are personal in nature, reimbursed, or otherwise deductible.

For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Legislation Access Database (LAD) on the Agency's mainframe computer. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the LAD version, or they may request a copy severed using the Privacy Act criteria, which does not remove client identity. Request for this latter version should be made by you to Jackie Page at (819) 994-2898. The severed copy will be sent to you for delivery to the client.

for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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