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For example, reasonable allowances for the use of a motor vehicle in connection with the duties of employment may be excluded by virtue subparagraph 6(1)(b)(v), (vi) or (vii.1) of the Act. ... However, the flat rate allowance is still deemed unreasonable by virtue of paragraph 6(1)(b)(x) of the Act and must be included in the employee's income, since it is not based solely on the number of kilometres for which the motor vehicle is used in connection with the duties of employment. ... You should also note that an employee who receives any allowance(s) for the use of a motor vehicle in connection with the duties of employment that was not included in computing employment income for the year because of paragraph 6(1)(b) of the Act is not eligible to deduct motor vehicle expenses under paragraph 8(1)(h.1). ...

Principal Issues: Are legal costs incurred in connection with an Ontario Municipal Board hearing regarding the rezoning of farm property from rural to agricultural status deductible under 20(1)(cc)? ... May 12, 2000 XXXXXXXXXX Tax Services Office HEADQUARTERS David Shugar Attention: XXXXXXXXXX 2000-000173 Legal Costs- Farm Pr operty This is in reply to your enquiry of January 5, 2000 concerning the deductibility, under paragraph 20(1)(cc) of the Income Tax Act (the "Act"), of legal costs incurred by farmers, in connection with making representations to the Ontario Municipal Board, supporting the rezoning of their farm property from rural to agricultural status. ... Therefore, legal fees paid, in connection with making representations to the Ontario Municipal Board, relating to a business carried on by a taxpayer, would be deductible in the year paid under paragraph 20(1)(cc) of the Act. ...

In this context, the words "in respect of" have been held by the Courts to imply a connection between the loss of employment and the subsequent receipt, where the primary purpose of the receipt was compensation for the loss of employment. Two questions set out by the Courts to determine whether a connection exists for purposes of a retiring allowance are as follows: 1- But for the loss of employment would the amount have been received? ... We note, however, that damages received in connection with a loss of employment fall within the definition of a retirement allowance. ...

In this context, the words "in respect of" have been held by the Courts to imply a connection between the loss of employment and the subsequent receipt, where the primary purpose of the receipt was compensation for the loss of employment. ... Two questions set out by the Courts to determine whether a connection exists for purposes of a retiring allowance are as follows: 1- But for the loss of employment would the amount have been received? ... We note, however, that damages received in connection with a loss of employment fall within the definition of a retirement allowance. ...

Where it can be demonstrated that there is a pre-existing right to property income (such as dividends) and there is a direct connection between the legal fees incurred and efforts to enforce the payment of that property income, the expense may be deductible in the taxation year in which it was incurred. ... However, if legal costs are incurred in connection with normal activities necessary to the earning of property income, then a deduction may be available. ... Accordingly, where it can be demonstrated that there is a pre-existing right to property income (such as dividends) and there is a direct connection between the legal fees incurred and efforts to enforce the payment of that property income, the expense may be deductible in the taxation year in which it was incurred. ...

Reasons: The March 2004 budget eliminated the exclusion for courses taken while an individual is employed and the course is taken in connection with that employment. 2007-022762 XXXXXXXXXX Eliza Erskine (613) 274-3022 April 4, 2007 Dear XXXXXXXXXX: Re: Education Tax Credit While Pursuing Directed Field Studies ("DFS") We are writing in reply to your email correspondence of March 15, 2007, regarding the above-noted subject matter. ... In this regard, we note that for years prior to 2004, the definition of "qualifying educational program" in the Act excluded any program taken by a student: (a) during a period for which the student received income from an office or employment, and (b) in connection with, or as part of the duties of, that office or employment. ... This means that, provided all other requirements are met, a course or program taken by an individual after 2003 in connection with his or her employment is eligible for the ETC. ...

Paragraph 3 of IT-99R4 states, "In limited circumstances, legal fees have been held to be deductible where they are incurred in connection with the defence by a taxpayer against a charge of performing illegal actions in the operation of the business or in defense of the day-to-day methods of carrying on business." From the information provided by the taxpayer it appears that in his situation the legal fees were incurred in respect to the charges relating to theft and destruction of property rather than in connection with an alleged performance of illegal operation of his business or in connection with charges relating to the day-to-day methods of carrying on his business. ...

You have enclosed a Judgment issued on XXXXXXXXXX by the Supreme Court of Ontario (the Judgment) in connection with a division of family assets between you and your former spouse, XXXXXXXXXX (the Individual), as a result of a breakdown of your marriage. ... In paragraph XXXXXXXXXX of the Judgment, a formula is set out in connection with your share of the pension benefits and indicates that your share of the benefits would be reduced by the average rate of income tax payable by the Individual for the year during which payments of pension are made to the Individual. ... As you did not become the owner of rights in the Individual’s pension plan, it is our view that you are not required to include in your annual income, the amounts you received in connection with the Individual’s pension rights. ...

Position: NO Reasons: there must be a connection between the travel incurred and the amounts paid by the taxpayer's employer to defray these costs XXXXXXXXXX 980782 C. ... Generally, this deduction offsets the income inclusion in respect of benefits provided by an employer to an employee or the employee’s family with respect to trips made for the purpose of obtaining necessary medical services not available locally or with respect to travelling expenses in connection with not more than two trips per year. In our opinion, there must be a connection between the actual travelling expenses incurred by a taxpayer or a member of the taxpayer’s household and the amounts paid by the taxpayer’s employer to defray those costs (and not merely a designation of employee’s wages and travel benefits). ...

In paragraph 27, line 12, following the last sentence of the first subparagraph, add the following sentence: "XXXXXXXXXX has incurred financing expenses of approximately $XXXXXXXXXX in connection with this refinancing which are deductible under paragraph 20(1)(e). ... As consideration for assuming the debt of XXXXXXXXXX referred to in paragraph 27 above, XXXXXXXXXX will reimburse XXXXXXXXXX Amalco for the financing expenses incurred by XXXXXXXXXX in connection with this debt by issuing and delivering to XXXXXXXXXX Amalco a non-interest-bearing demand promissory note (the "XXXXXXXXXX Reimbursement Note" and the "XXXXXXXXXX Reimbursement Note", respectively), the principal amount of which will be equal to one-half of such financing expenses. ... XXXXXXXXXX will each be entitled to deduct in accordance with paragraph 20(1)(e) in computing its income for the taxation year in which payment is made to XXXXXXXXXX Amalco and following taxation years the amount paid by each of them to XXXXXXXXXX Amalco referred to paragraph 34A as reimbursement of financing expenses incurred by XXXXXXXXXX in connection with the refinancing referred in paragraph 27. ...