Beaubier T.C.J. .
This appeal pursuant to the Informal Procedure was heard at Edmonton, Alberta on August 13, 1998. The Appellant and his accountant, John Hunter, testified.
In his 1995 income tax return, the Appellant deducted $12,019 in legal fees he paid. He claimed to deduct them pursuant to subsection 60(0.1) of the Income Tax Act in respect to a pension benefit or a retiring allowance. The deduction was denied. He appealed.
Paragraph 6 of the Reply to the Notice of Appeal contains the assumptions which were established to be correct by the evidence. They read:
6. In so reassessing the Appellant, the Minister made the following assumptions of fact:
(a) the Appellant was an employee and a shareholder of the Company;
(b) the Appellant remained an employee of the Company until 1989;
(c) the Appellant sought legal advise regarding wrongful dismissal and incurred legal fees totalling $12,019.21 between 1989-1992;
(d) the Appellant did not pursue legal action for wrongful dismissal from the Company;
(e) in 1994, the Company was sold and the Appellant received taxable dividend income in the amount of $31,875.00 in 1994 and $37,550.00 in 1995 from the Company;
(f) the Appellant was not in receipt of a pension benefit or a retiring allowance from the Company during the 1995 Taxation Year or in any of the 7 preceding taxation year; and
(g) the Appellant deducted the total legal fees incurred in the amount of $12,019.21 against the taxable dividends he received in the 1995 Taxation Year from the Company.
The Appellant cannot change what happened between him and the corporation by an action in the Tax Court of Canada.
For this reason, his appeal is dismissed.
Appeal dismissed.
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