16 January 1986 Income Tax Severed Letter HAV4125 - []

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.

REVENUE CANADA, TAXATION MEMORANDUM REVENU CANADA

DATE: January 16, 1986.

TO- Financial Industries Division

FROM- Assessing Division Tom Kissner

ATTENTION B. Darling A/Director

RE: United States Railroad Retirement Act

Reference is made to your memorandum of November 7, 1985 concerning disability benefits received under the United States Railroad Retirement Act.

In this regard, the taxpayer's representative has contacted us further and requested, on the basis of new information which he is providing, that we reconsider our position. A copy of XXXX latest submission is attached.

It is our view that the new information presented does nothing to change our previous determination. We would agree with the statement by the XXXX XXXX that "the total and permanent disability is analogous to Social Security's disability benefit". While such payments may be "analogous" (insofar as the injured party in either case will receive a financial benefit), the way in which the two plans are funded results in a different tax treatment.

This different treatment could be compared to that in the Canadian Income Tax Act with respect to disability payments received by an individual from a plan to which he alone has contributed and such similar payments received from a plan to which both the individual and his employer have contributed. While the actual payments may be identical, in the former case they will not be taxable; in the latter case they will be.

Before we again contact the taxpayer in this matter, we would appreciate your confirmation of our position.

We trust this will be satisfactory and look forward to your early reply.

Director Assessing Division