24 January 2001 Internal T.I. 2001-0064147 - DAMAGES PER HUMAN RIGHTS VIO.

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 portion of a lump sum payment, if any, received from an employer in respect of damages can be attributed as a reasonable amount for general damages relating to a human rights violations?

Position: Question of fact.

Reasons: Consistent with other positions taken.

		January 24, 2001

	Southern Interior B.C. Tax Services Office 	HEADQUARTERS
	Kathy Forth	Jacques E. Grisé
	CPP / EI Rulings / Trust Examination	957-2059

2001-006414

Human Rights Violations

This is in reply to your memorandum of January 4, 2001, requesting our assistance on how you should proceed to determine the portion, if any, of a lump sum payment received by XXXXXXXXXX from her employer that is attributable to general damages relating to human rights violations.

Our position with respect to human rights violations is set out in paragraph 9 of Interpretation Bulletin IT-337R3 as follows:

"...An amount paid on account of or in lieu of general damages, that is, damages for loss of self­respect, humiliation, mental anguish, hurt feelings, etc., or pursuant to an order or judgment of a competent tribunal may be a retiring allowance if the payment arises from a loss of office or employment of a taxpayer. However, if a human rights tribunal awards a taxpayer an amount for general damages, the amount is normally not required to be included in income. When a loss of employment involves a human rights violation and is settled out of court, a reasonable amount in respect of general damages can be excluded from income. The determination of what is reasonable is influenced by the maximum amount that can be awarded under the applicable human rights legislation and the evidence presented in the case."

There seems to be sufficient evidence in the material that you have provided to conclude that XXXXXXXXXX human rights violation complaint was not trivial, frivolous, vexatious or made in bad faith. Furthermore, it would not be unreasonable to conclude, from the information on hand, that part of the $XXXXXXXXXX received by XXXXXXXXXX from her employer consisted of damages relating to a human rights violation and should not be included in her income. As indicated in your memorandum, the determination of what is reasonable is influenced by the maximum amount that can be awarded under the applicable human rights legislation (i.e. the Human Rights Code of British Columbia in this case) and evidence presented in the case.

Attached is a copy of a memorandum of February 25, 2000 to the Vancouver TSO that deals, in part, with the maximum amounts that have been awarded pursuant to the Human Rights Code. We have also attached the summary of a more recent decision of the British Columbia Human Rights Tribunal in the case relating to Marleen J. Tozer that may be helpful in determining the portion of the amount received that can reasonably be attributed to damages in respect of a human rights violation. Although we leave the final determination of the amount to be attributed to such damages to you, we doubt that there is any justification for an amount exceeding $3,500.

We hope our comments are helpful.

John Oulton, CA
Manager
Business and Individual Section
Business and Partnerships Division
Income Tax Rulings Directorate

Enclosures

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