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:
Where there has been an appeal to a decision of an umpire under the Employment Insurance Act and costs (legal fees) have been awarded to the respondent, will the appellant be entitled to deduct those legal fees pertaining to the respondent's legal representation?
Position TAKEN:
Yes.
Reasons:
Subparagraph 60(o)(ii) of the Income Tax Act permits a taxpayer a deduction for "amounts paid by the taxpayer in the year in respect of fees or expenses incurred in preparing, instituting or prosecuting an objection to, or an appeal in relation to, ...... a decision of ...... an umpire under ..... the Employment Insurance Act. (underlining for emphasis) It is the Canada Customs and Revenue Agency's position that such amounts would generally include the legal fees, if any, paid by the appellant to his own legal representative as well as those legal fees required to be paid by the appellant to the respondent's legal representative as a consequence of costs being awarded by the umpire to the respondent.
XXXXXXXXXX 2000-004217
Jim Wilson
November 20, 2000
Dear XXXXXXXXXX
Re: Deduction of Legal Fees
We are writing in reply to your letter of July 3, 2000 wherein you asked for our comments regarding the deductibility of legal fees. More specifically, you indicated that you made an appeal to a decision of an umpire under the Employment Insurance Act. You pleaded your own case and therefore you only incurred an expense of $50.00 for registration. You are concerned, however, that if your appeal is not successful and you are ordered to pay the legal costs of the respondent's attorney, will such fees be deductible.
Subparagraph 60(o)(ii) of the Income Tax Act permits a taxpayer a deduction for "amounts paid by the taxpayer in the year in respect of fees or expenses incurred in preparing, instituting or prosecuting an objection to, or an appeal in relation to, ...... a decision of ...... an umpire under ..... the Employment Insurance Act ....". (underlining for emphasis) It is the Canada Customs and Revenue Agency's position that such amounts would generally include the legal fees, if any, paid by the appellant to his own legal representative as well as those legal fees required to be paid by the appellant to the respondent's legal representative as a consequence of costs being awarded by the umpire to the respondent.
We trust our comments will be of some assistance.
Yours truly,
Jim Wilson
for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2000
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2000
Email this Content