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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: Is a specific provision of the Act which would compensate a Canadian taxpayer for legal/professional costs incurred in defence of an action initiated under the Act.
Position: Yes
Reasons: Subparagraph 60(o)(i) entitles a taxpayer to deduct fees or expenses incurred in preparing, instituting or prosecuting an objection or an appeal in relation to an assessment of tax, interest or penalties under the Act or an Act of a Province that imposes a tax similar to the tax imposed under the Act.
June 6, 2003
XXXXXXXXXX
Dear Colleague:
Thank you for your letter of April 30, 2003, concerning whether there are provisions in the Income Tax Act that would compensate a Canadian taxpayer for legal/professional costs incurred in defence of an action initiated under the Act.
In computing a taxpayer's income, subparagraph 60(o)(i) of the Act entitles a taxpayer to deduct fees or expenses paid in preparing, instituting, or prosecuting an objection or an appeal in relation to an assessment of tax, interest, or penalties under the Act, or under a provincial Act that imposes a tax similar to the tax imposed under the Income Tax Act. You may wish to refer to paragraphs 7, 8 and 33 of interpretation bulletin IT-99R5 (Consolidated), Legal and Accounting Fees, a copy of which is enclosed for your convenience.
You can find more information concerning this deduction, and other taxation matters, on the Canada Customs and Revenue Agency's Web site at www.ccra.gc.ca.
Thank you again for having taken the time to write. I trust that this explanation will be helpful.
Sincerely,
Elinor Caplan
Attachment
c.c.: Minister's Office
Political Assistant
K. Power
957-8968
2003-001711
May 12, 2003
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