Legal Fees (Assorted Topics)

This is the problem, and has been through this whole wild ride. Do we or don't we? Can we or can't we? How does one put extra money away in an RRSP, not knowing where we stand at tax time? This should have been dealt with last year so we could go "peacefully into the night". The constant uncertainty of things is very stressful. It needn't be so. Someone fumbled the ball here folks.
My last two cents...
Sapper

This point  you speak of Trooper in conjunction with what someone from our class law suit was told recently by a qualified tax accountant rings true. The tax accountant had experienced in the past a rejection of the legal fees so we need to be prepared and proactive. Has anyone had any success in obtaining clarification and/or confirmation from MC about our status within CRA and this special circumstances approval?

Apparently if the special cercumstance is approved for us, the approved notification will be available to view for those CRA members who work in the procession tax center.
I asked if there was a way for me to find out through this center, the answer I got was no.
Also I was told that if no such approval notification exist, and the number of individuals claiming these Legal fees are high, a red flag will be raised, and they will look into it for us, perhaps placing special approval for it.

The thing that is important to know here is this - claiming the fees when filling your taxes will go through automatic, However there is a possibility, and I stress (possibility) that the CRA will reject it, which may result in them coming after you for this deduction down the road.

This is what I am thinking of doing, claim my fees when completing my return, add the invoice for Legal fees to my return, and I may also submit a request to have them grant me the full deduction.

Feckn' succotash!

Feck it. Not knowing is the feckin bain of me feckin existence. Well I'll be fecked. Feckin file and see if we're fecked. Yes Teen...it helps. For feck sakes.
Sap

Trooper that one line you wrote is the best description and exactly what Peter D told me, when he was still talking to me...

I also asked if granted is it partial or fully deductible, the answer is that if we were not reimbursed in any way from our fees payed, which in our case we were not, it is fully deductible dollar for dollar.

But like you also said...Nothing is concrete. LOL Ahhhhhhhhh taxes aren't they the greatest feckn' thing in Canada????

For everyone I have been watching Mrs. Brown's Boy's and she uses the word feckn' a lot and you know what? I like it and let's all start using it when we have the urge to say it the other way. Everyone agree???

Correct , Carver, there's no comfort letter coming, just the comfort knowing that the GOC gives with one hand and scoops it back with the other

If we haven't heard of the comfort letter to date at this point we probably are not going to receive one.

Agreed trooper and thank you for calling and inquiring with CRA as we need clarification of the following:
a) certain circumstance's the CRA may grant approval for such a request  and therefore are we one of those circumstances?
b) "comfort letter" results
c) dollar for dollar legal fees are claimable BUT are entered on line 232 which IS part of an equation on the tax form THAT results in a ONLY a gain of 15% credit towards your tax return.

Just spoke with the CRA , now my head is spinning. First off I read the invoice to them received from MC. I asked if we claim on Line 232 the answer was yes. I asked if it was absolute, the answer was no. Apparently we do not fall under the qualification as per the LTD, now if we claim the fees they will automatically be accepted at time of filling, but may be rejected later if found not to be valid resulting in us paying back what was deducted. Under certain cercumstances the CRA may grant approval for such a request, so we now have to find out what resulted in the request for comfort letter that was supposed to be asked by the defendant.The question to ask is - was it approved, or denied, also if approved were there any instructions as to the manner in which we use the deduction. We have to find out if arrangements were made in this regards. I also asked if granted is it partial or fully deductible, the answer is that if we were not reimbursed in any way from our fees payed, which in our case we were not, it is fully deductible dollar for dollar. Also the deduction for RRSP'S would not affect our deduction as for it is for pension benefits ect that does not fall under our situation.

In closing what I have wrote here today is just me trying to dig for information, what I wrote is by no means concrete, so it may turn out not to be valid, as you all know how hard it is to gather factual information. So I guess more investigation is needed to try and sort this out.

It would be good to know Trooper. I asked a week ago via email with no response as yet from MC. But the truth of it is, 15% of any legal fees paid amount is not going to reduce one's taxable income by a heck of a lot.

Another possibility could be that during their efforts to obtain this - "The Defendant (GOC) has agreed to ask the CRA whether they can provide a comfort letter on this point." Just maybe our invoice attached to our return will be sufficient in the acceptance of this deduction, it does state in the invoice " The total amount of this invoice (inclusive of tax) should be reported as a deduction in calculating your taxable income for 2013 on your T1 income tax return for 2013 " So what I am saying is that perhaps this is the instructions that was given by the CRA to the Defendant with respect to claiming our fees. Nevertheless it would be comforting to know if this is indeed the case.

What I don't want is when we start completing our return, people start saying that their accountant said that they cannot claim the fees, or, once your return is passed in, the CRA rejects it. Just better to be sure, and prepared, not intended to draw panic.

Contact the Law firm, they may have made arrangements with the CRA , but normally when one makes arrangements they provide a letter or a code to apply to our returns.

I have no letter or code, however we may not need one. Last year when I spoke to the CRA about this, I was told that it was not and absolute with reference to our Legal fees, so clarification would be comforting, just to be sure.

Trooper how do we go about getting this letter?