3 May 1993 Internal T.I. 9302747 F - Alimony Maintenance Court Order Written Agreement

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.

May 3, 1993

St. Catherines District Office      R.B. DayJ. Sherman      (613) 957-2136 Acting Assistant Director - Client Services 930274

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-     Subsections 60.1(3) and 56.1(3)

We are writing in reply to your memorandum of January 27, 1993, wherein you requested our opinion as to whether or not a Court Order would supersede Minutes of Settlement with respect to the payment of support to a spouse.

Our understanding of the facts in this case is as follows:

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DISTRICT OFFICE POSITION

5.     It is your opinion that the Court Order replaces and makes void the Agreement in its entirety such that subsections 60.1(3) and subsection 56.1(3) will not apply to the prior year's payments and, accordingly, such payments are not deductible by the taxpayer and not included in the spouse's income.

TAXPAYER'S POSITION

6.     The taxpayer's solicitor argues that paragraph 6 of the Agreement will apply to the prior year's payments and that the court order does not void all of the provisions in the Agreement because:

-     The Agreement was created under domestic law,

-     The courts, by way of judgment, cannot release or acknowledge items that have taken place,

-     Judgments can only contain or impose things on litigants, and

-     There is no legal basis for including subsections 60.1(3) and 56.1(3) of the Act in a Provincial Court Order.

OUR COMMENTS

7.     

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•     With respect to the Agreement as discussed in paragraph 4 above, we noted that the parties thereto, for purposes of the court order, agreed to exclude paragraph 6 along with other specific paragraphs. Had the parties intended the terms of paragraph 6 to be part of the court order, it is our view that paragraph 15 of the Agreement would have so stated.

9.     In considering matters of alimony and maintenance, where court orders and judgments are concerned, we have noted the courts are frequently called upon to formalize, by way of judgment or court order, all aspects of judicial separations including the income tax aspects. We find it difficult, XXXXXXXXXX to accept the taxpayer's solicitor's arguments that the court could not incorporate such matters into the judgment.

10.      Subsection 56.1(3) and 60.1(3) specifically state that the rules in those subsections will apply to qualifying payments "...where a decree, order or judgment of a competent tribunal..." so provides.

In conclusion, we agree with your view that the prior years payments are neither deductible to the taxpayer nor income to the spouse.

P.D. Fuoco Section Chief Personal and General SectionBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch

c.c.      Client Assistance Directorate     Assessment of Returns Directorate