22 March 2001 Internal T.I. 2001-0074757 - PATERNITY AGREEMENT-COURT ORDER

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: Whether an agreement filed with a competent tribunal under the provisions of provincial legislation dealing with family maintenance may constitute an order for the purposes of paragraph 60(b) of the Act.

Position: No.

Reasons: The requirement in paragraph 60(b) of the Act and the definition of "support amount" in subsection 56.1(4) of the Act refers, in paragraph (b), to an order of a competent tribunal in accordance with the laws of a province. As mentioned in paragraph 13 of IT-530, nothing less than a concrete pronouncement, decree or direction of a tribunal empowered to make an order will constitute an order as required by the definition of support amount in subsection 56.1(4) of the Act.

		March 22, 2001

Ms. Joan Ervin	HEADQUARTERS
	Regina Tax Services Office	Patrick Massicotte
	Client Services	(613)957-9232

2001-007475

Paternity Agreement

This is in reply to your round trip memo of March 13, 2001 regarding the status of a paternity agreement filed with the Court of the Queen's Bench of Saskatchewan for the application of paragraph 60(b) of the Income Tax Act ("Act"). More specifically, you request whether such an agreement, along with a related affidavit, stamped by the competent tribunal in accordance with provincial legislation can be considered an order of a competent tribunal. In the situation you describe the parents were never spouses and never lived together.

Our Comments

In general terms, paragraph 60(b) of the Act provides for the deduction of a support amount paid after 1996 by a taxpayer to a particular person where both are living separate and apart at the time the amount is paid. Subsection 56.1(4) of the Act provides that "support amount" means, inter alia, an amount payable or receivable as an allowance on a periodic basis for the maintenance of the recipient, children of the recipient or both. According to paragraph (b) of that definition, where the payer is the natural parent of a child of the recipient (and not the spouse or common-law partner or former spouse or common-law partner of the recipient), the amount must also be receivable under an order made by a competent tribunal in accordance with the laws of a province.

Paragraph 13 of IT-530, Support Payments, provides that: "An order of a competent tribunal is a decree, order or judgment made by a court or other competent tribunal. Nothing less than a concrete pronouncement, decree or direction of a tribunal empowered to make an order will constitute an order as required by the definition of support amount in subsection 56.1(4)."

In our view, the filing of a paternity agreement under the provisions of a provincial Family Law Act does not in and by itself generally allow to conclude that the agreement is an order of the tribunal (letter of interpretation #E 9218905, issued on July 21, 1992).

Specifically, in this case, the agreement and affidavit are filed with the Court of the Queen's Bench of Saskatchewan pursuant to section 9 of the Family Maintenance Act of Saskatchewan ("FMA"). The filing is made under the provisions of subsection 9(1) of the FMA.

Subsection 9(2) of the FMA states that the provisions of an agreement filed with the Court pursuant to subsection (1) may be enforced "as if it were an order". It is not itself an order of the Court. However, if the agreement were incorporated into a court order, it is our opinion that the payments could then be considered to be made/received under an order of a competent tribunal for the purposes of paragraph 60(b) and the definition of "support amount" in subsection 56.1(4) of the Act.

According to the documents provided with your request, it appears that the paternity agreement and related affidavit were only filed with the Court pursuant to subsection 9(1) of the FMA such that they were not incorporated in to a Court Order. The agreement would not therefore constitute an order of a competent tribunal for the purposes of subsection 56.1(4) and paragraph 60(b) of the Act.

We trust that these comments will be of assistance to you.

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 Canada Customs and Revenue 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. Requests for this latter version should be made by you to Mrs. Jackie Page at (819)994-2898.

Milled Azzi, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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