http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/169120/index.do
Ross v. The Queen (July 27, 2016 – 2016 TCC 170, V. Miller J.).
Précis: Ms. Ross was an employee pharmacist. She incurred roughly $5,000 in costs in connection with a disciplinary hearing and the resulting terms of a settlement agreement. She sought to deduct those costs. CRA did not permit the deduction and she appealed to the Tax Court. The Tax Court held that as an employee Ms. Ross was not permitted to deduct the expenses in question. There was no order as to costs since this was an informal procedure appeal.
Decision: The decision simply boiled down to the fact that deductions allowed to employees are very narrow and these expenses, unfortunately for Ms. Ross, did not qualify:
[11] In the present appeal, the Appellant incurred legal expenses so that she could continue to practice as a pharmacist in Nova Scotia. The facts in this appeal are similar to those in Blagdon v The Queen, [2002] CTC 2332 (TCC). In Blagdon, the taxpayer’s Master’s Certificate was suspended. He had to appear at an enquiry and write an examination to protect his professional qualifications and to continue to earn income from employment as a ship’s captain. Captain Blagdon argued that paragraph 8(1)(b) should be interpreted broadly to permit a deduction for legal expenses incurred to protect one’s entitlement to pursue a particular livelihood. In dismissing Captain Blagdon’s appeal, Bowman, A.C.J.T.C., as he then was, stated at paragraph 15:
Paragraph 8(1)(b) permits the deduction of legal expenses incurred to collect or establish a right to salary or wages.
Captain Blagdon appealed this decision to the Federal Court of Appeal. In dismissing his appeal at Blagdon v The Queen, 2003 FCA 269, the Court stated:
5 We are all of the view that the Tax Court Judge was correct in his interpretation of paragraph 8(1)(b). We do not accept that the words of paragraph 8(1)(b) can reasonably bear the interpretation proposed by counsel for Captain Blagdon. We can understand that a broad entitlement to a deduction for legal expenses for persons in the situation of Captain Blagdon might be justified on policy grounds but that is a matter for Parliament not the courts.
[12] It is clear that the amount of $4,989.73 was not incurred by the Appellant to collect or establish a right to salary or wages. It was incurred to allow her to preserve a future right to work as a pharmacist.
There was no order as to costs since this was an informal procedure appeal.