Recently the Tax Court of Canada (TCC) in Bilodeau v. The Queen addressed the issue of whether commission income received by a life insurance agent on a life insurance policy on the agent’s liife was taxable. The TCC found that the commission income was fully taxable as business income in the hands of the agent, and that the taxpayer could not rely on paragraph 27 of IT-470R to exempt this amount from taxation. At the 2010 CALU Tax Roundtable, the Canada Revenue Agency (CRA) was asked to provide further guidance as to the situations or fact patterns where it may seek to apply the Bilodeau decision rather than follow its administrative position. As part of its response, the CRA announced that it has commenced a review of the administrative position in paragraph 27of IT-470R as it applies to life insurance commissions. It was further noted that any changes to its position will first be published in an Income Tax Technical News with a prospective effective date. In early July, Advocis and CALU made a joint submission to the CRA on this issue.