15 October 1997 External T.I. 9724205 - TUITION FEE REIMBURSEMENT

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 tuition fee reimbursement is a 6(1)(a) benefit for employees of a university who are pursuing their M.D. degree.

Position:

Yes.

Reasons:

Benefit to employee to have tuition for such courses paid by employer.

	                                 	972420
XXXXXXXXXX                              	P. Spice

Attention: XXXXXXXXXX

October 15, 1997

Re: XXXXXXXXXX

This is in reply to your letter of September 5, 1997, in which you refer to our technical interpretation of August 15, 1996 (our document number E9620555). You ask us to consider an agreement or application pursuant to, respectively, subsection 173(1) or 174(1) of the Income Tax Act (the "Act") with respect to the tax issue involved.

We have reviewed your further arguments on the issue but are not persuaded that there is any basis for altering our previous technical interpretation. You refer to judicial decisions which have considered the application of paragraph 6(1)(a) of the Act but we are not aware of any such decisions with respect to the issue of the taxation of a reimbursement by an employer of an employee's tuition fee expense. Furthermore, we would question a finding that the tuition-fee expense incurred by the individuals in this case could be considered an "employer-imposed" expense.

With respect to a resolution of the tax issue pursuant to subsection 173(1) or 174(1) of the Act we recommend that you discuss this with the XXXXXXXXXX Tax Services Office. You indicate that the tax issue relates to tuition fee reimbursements that have been reported by the employer as taxable benefits to XXXXXXXXXX members for the XXXXXXXXXX tax years. Assuming that one or more of the XXXXXXXXXX members have received a Notice of Assessment for the XXXXXXXXXX taxation year the usual course of action would be to file a Notice of Objection pursuant to subsection 165(1) of the Act. A test case or the method of resolution suggested by you may be preferred but the tax services office is responsible for making this decision on behalf of the Department. We will therefore forward a copy of your letter and this reply to the Appeals Division of the XXXXXXXXXX Tax Services Office. Please note that if you wish to represent a particular individual in his or her dealings with the Department, the Department requires that you provide a signed authorization from that individual.

We trust this is satisfactory.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch