Employer reimbursement of employees’ professional fees incurred in correcting errors in their returns attributable to employer error was non-taxable

On the basis of its policy that “compensation paid to an employee by their employer for financial loss incurred due directly to the employer’s error is not included in income since the employee is being restored to a previous economic position,” the Directorate indicated that employer reimbursement of employees’ costs of tax professional services incurred in sorting out and addressing the consequences of erroneous T4 slips issued by the employer did not represent a taxable benefit.

Neal Armstrong. Summary of 28 April 2017 Internal T.I. 2017-0699741I7 under s. 6(1)(b).