Twin Butte Energy Ltd TBTEF

RE:Re: tax pools

[Oldfart74]

cigarbutt1 wrote: Scottie,
I have communicated directly and indirectly with CRA in the past and have found them useful despite what we hear often.
I don't find that this is necessary for TBE but thank you for the advice.
The CRA reassessment has been regularly disclosed since 2015. It is related to SR&ED (kind of investment tax credit) tax deductions.In 2016, TBE has mentioned that it had ran out of relevant pools to offset that reassessment and the August 24th, 2016 announcement (may have been related to transparency or another reason (I will let you decide)) simply confirmed that, absent successful appeal, this issue resulted in cash tax payable for the 2016 year (5.9 millions).
By the way, my understanding is that CRA is an unsecured creditor at this point. One would expect that the Receiver is dealing with this aspect. CRA apparently can play jeopardy with what is owed to them and I'm not talking about the TV show.

The following extract is from June 30, 2016 interim report

In 2015 the Company received a letter from the Canada Revenue Agency (“CRA”) proposing to reassess the Company’s income tax lings related to Scienti c Research and Experimental Development (“SR&ED”) tax deductions utilized in 2011 by a predecessor of the Company, and in 2014 by the Company, and certain non-capital losses. Subsequent to June 30, 2016, the Company received notices of reassessment for the 2011, 2014 and 2015 taxation years, disallowing the SR&ED deductions, certain non-capital losses and resulting in $5.9 million of taxes payable for the 2015 tax year. These disallowed amounts would be deductible, and any taxes paid refundable, on a successful appeal of the reassessments.

Twin Butte’s management remains of the opinion that, after careful consideration and consultation at the time of the deductions and at this time, Twin Butte’s tax returns were correct as led and the Company has not recorded a liability for the reassessments. Twin Butte’s management will vigorously defend the Company’s tax ling position, and will be required to deposit 50% of the taxes payable when ling the objection.