26 April 2010 External T.I. 2010-0358201E5 - Legal Fees as Medical Expenses

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.

Principal Issues: 1) Are legal fees incurred to correct medical records eligible for the METC? 2) Are legal fees incurred in order to receive medical services eligible for the METC?

Position: 1) No. 2) Insufficient information to conclude.

Reasons: 1) No specific provision allows legal fees incurred to correct medical records to be eligible for the METC. 2) Subparagraph 118.2(2)(l.1) allows legal fees to locate a compatible donor and to arrange for a bone marrow or organ transplant to be eligible for the METC. Insufficient information provided to conclude if legal fees are eligible for the METC under any other provisions.

									2010-035820
XXXXXXXXXX 								Chrys Tzortzis, CA
									(613) 957-2082
April 26, 2010

Dear XXXXXXXXXX :

Re: Legal Fees as Eligible Medical Expenses

This is in response to your email of February 22, 2010, inquiring about whether legal fees incurred to correct medical records and legal fees incurred in order to receive medical services are eligible medical expenses for the purposes of the medical expense tax credit ("METC").

The situation outlined in your letter appears to relate to a factual one, involving a specific taxpayer. Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of a request for an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, Advanced Income Tax Rulings, dated May 17, 2002. This Information Circular and other Canada Revenue Agency publications can be accessed on the internet at http://www.cra-arc.gc.ca. Should your situation involve a specific taxpayer and a completed transaction, you should submit all relevant facts and documentation to the appropriate tax services office for its views. A list of tax service offices is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following general comments, which may be of assistance.

Medical expenses which are eligible for the METC are limited to those described in subsection 118.2(2) of the Income Tax Act (the "Act"). If a particular expenditure is not described as an eligible medical expense in subsection 118.2(2) of the Act, or if the conditions under which the expenditure would qualify are not met, the expenditure does not qualify for purposes of the METC, even though the expenditure may have been incurred for medical reasons.

In our view, legal fees incurred to correct medical records are not eligible for the METC as such fees are not described in subsection 118.2(2) of the Act. Legal fees incurred in order to receive medical services may be eligible medical expenses if such fees are described in subsection 118.2(2). Pursuant to paragraph 118.2(2)(l.1) of the Act, legal fees paid to locate a compatible donor and to arrange for the bone marrow or organ transplant are eligible for the METC. Further information on medical expenses may be found in Interpretation Bulletin IT-519R2 (Consolidated), Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, which is available on the CRA website at www.cra-arc.gc.ca.

We trust that these comments will be of assistance.

Yours truly,

G. Moore
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch