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:
What is the tax treatment where a lawyer charges to his client as recovery of expenses, amounts in excess of expenses incurred directly for the benefit of his client and which are chargeable to the client under the terms of an agreement?
Position TAKEN:
The excess must be included in the income.
Reasons FOR POSITION TAKEN:
Section 9
5-942346
XXXXXXXXXX Robert Gagnon
October 18, 1994
Dear Sir:
Re: IT-129R
This is in reply to your letter of July 13, 1994 wherein you requested a technical interpretation concerning Interpretation Bulletin IT-129R.
It is our view that where a lawyer charges to his client (in the course of his practice) as recovery of expenses, amounts in excess of expenses incurred directly for the benefit of his client and which are chargeable to the client under the terms of an agreement, the excess must be included in the calculation of his income.
The foregoing opinion is not a ruling and, in accordance with the guidelines set out in Information Circular 70-6R2 dated September 28, 1990, is not binding on the Department.
We trust our comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch
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