We’ve all heard the saying: the only things certain in life are death and taxes. While we may not have much control over the former, we can take steps to reduce our tax bills.
But how far would you go to save a few dollars in taxes? Some taxpayers have been very creative in trying to justify tax deductions. While some attempts were rejected, many others were approved by the Tax Court.
10. Rejected: Income Tax Act incomprehensible
Arguing that the Income Tax Act is difficult to understand is not a valid defence when charged with failing to file an income tax return.
R. v. Meikle [2003] 4 C.T.C. 294
9. Accepted: Spousal amount for widows
If a widow remarries immediately after her husband dies, the spousal amount can be claimed by the new husband and on behalf of the deceased husband.
CRA Views 2003-0050255
8. Rejected: Gambling as a business
A lawyer turned professional gambler had more than $100,000 in losses disallowed as a business expense because he could not prove he had an actual business plan.
Cohen v. The Queen [2011] TCC 262
7. Accepted: Cat and dog food
While you can’t usually claim pet food, a farmer was allowed to claim cat and dog food because it was for outdoor pets acquired to keep wildlife away from the blueberries.
Zeitz v. The Queen [2002] 4 C.T.C. 2292
6. Rejected: Trips to Vegas
Even if your doctor recommends trips to warmer climates to help with a skin condition, the cost of trips to Las Vegas and Arizona cannot be claimed as a medical expense.
Goodwin v. The Queen [2001] 4 C.T.C. 2906
5. Accepted: Golf is not an employment expense if you hate it
A Canadian executive successfully argued that his golf membership was not a valid employment expense because he hated playing golf.
Rachfalowski v. The Queen [2008] TCC 258
4. Rejected: Ballet lessons
While the cost of your child’s ballet lessons does qualify for the Children’s Arts Credit, it cannot be claimed as a childcare expense.
Levine v. The Queen [1996] 2 C.T.C. 2147
3. Accepted: Diamonds are a girl’s best friend
A stripper was allowed to keep nearly $2 million in gifts from a happy customer even though the CRA argued the facilities were income. The Tax Court ruled they were indeed gifts.
Landry v. The Queen [2009] TCC 399
2. Rejected: Haircuts
Even if your job requires you to be well-groomed and get a haircut regularly, the cuts’ cost is not deductible against your employment income.
Rouillard v. The Queen [2000] 4 C.T.C. 2065
1. Accepted: Additional food needed by couriers
The Federal Court of Appeal ruled the additional food required by a foot and transit courier because the extra energy he expended could be claimed as a business expense.
Scott v. The Queen, 98 D.T.C. 6530
Source: | the Tax Court.
