30 January 1996 External T.I. 9603255 - XXXXXXXXXX

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 receipts issued by XXXXXXXXXX provided to learning disabled/other children may qualify for purposes of 118.2(2)(e)

Position:

question of fact, individual determination required. Insufficient info provided to even opine whether institute may be considered to provide equipment, facilities or personnel "specially" for the care or care and training of individuals suffering a particular handicap

Reasons:

		960325
XXXXXXXXXX	Sandra Short

January 30, 1996

Dear Sirs:

Re: XXXXXXXXXX

This is in reply to a query forwarded by you from XXXXXXXXXX which queries whether the Institute may issue medical expense receipts for the 1995 tax year so that appropriate individuals may claim a medical expense tax credit in respect of medical expenses under paragraph 118.2(2)(e) of the Income Tax Act (the Act). XXXXXXXXXX asked that we direct our reply to you.

XXXXXXXXXX

Such students are referred to the Institute by physicians. The Institute remains in direct consultation with the medical community in adapting its programs to meet the needs of each individual student. We did not receive a description of the programs offered by the Institute; however, the Institute advises that, in addition to providing specific educational training to deal with the learning problems of its students, it addresses all aspects of a child's life by providing coping skills, emotional support and improving self-esteem. A program is designed, implemented and adapted in consultation with the child's physician as part of their treatment regimen to address all of their medical needs. The view has been expressed that as fees are paid for care and training to address specific medical conditions under the supervision of the medical community, that students are eligible to deduct costs under paragraph 118.2 of the Act as a medical expense. We received no published documentation, brochures or pamphlets about the Institution.

As discussed in our telephone conversation of January 24, 1996 (XXXXXXXXXX/Short), while proper receipts must support all amounts claimed as qualifying medical expenses, the Department does not certify whether receipts to be issued by a particular institution will qualify for purposes of a medical expense tax credit. While a school, institution or other place may issue a receipt which contains the information found in paragraph 68 of Interpretation Bulletin IT-519R, it remains a question of fact whether a particular taxpayer is entitled to a claim under paragraph 118.2(2)(e) of the Act. The issue, as we see it, is not whether the school, institution or other place qualifies but whether the individual attending the school, institution or other place in respect of whom a tax credit is to be claimed under subsection 118.2(1) of the Act meets the requirements of paragraph 118.2(2)(e). A case by case determination is required to determine whether a particular individual meets all the criteria of paragraph 118.2(2)(e) of the Act including the requirement that the individual "required the equipment, facilities or personnel specially provided by that school, institution or other place for the care, or the care and training, of individuals suffering from the handicap suffered by the patient". In addition, the individual must be certified by an appropriately qualified person to be a person who, by reason of mental or physical handicap, so requires the equipment, facilities or personnel specially provided by the school, institution or other place. A reference to an "appropriately qualified person" includes a medical practitioner as well as any other person who has been given the required certification powers under provincial or federal law.

As discussed in paragraph 32 of Interpretation Bulletin IT-519R, a patient suffering from a behavioral problem which arises out of a mental or physical impairment or suffering from a learning disability, including dyslexia, who attends a school that specializes in the care and training of persons who have the same type of problem or disability is considered to qualify under paragraph 118.2(2)(e) of the Act, and the expenses paid for the patient are qualifying medical expenses even though some part of the expenses could be construed as being tuition fees (see Rannelli v MNR, 91 DTC 816, (1991) 2 CTC 2040, (TCC)). It is a question of fact whether a school, institution or other place specializes in the care or care and training of persons who have the same type of problem or disability just as it is a question of fact whether a particular individual requires the equipment, facilities or personnel which is specially provided.

XXXXXXXXXX

She verbally indicated that it offers other services as well although we are not conversant with the type or extent of these other services. As a result, we are unable to offer an opinion which supports that the Institution may be considered to specialize in the care or care and training of persons with a particular type of problem or disability. In Rannelli, the children attended the Fraser Academy which admitted only those children suffering from a learning disability known as dyslexia. Given the wide range of disabilities, disorders and problems which the Institution claims to specialize in and given that there are other services being offered to other segments of the public as well, we are hesitant to offer any assurance on the basis of the brief information provided. Having said that, we recognize that the legislation does not require that a school, institution or other place provide care exclusively for a person with a mental or physical handicap.

We trust our comments will be of assistance to you.

Yours truly,

P.D. Fuoco
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch