http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/232214/index.do
Geick v. The Queen (June 21, 2017 – 2017 TCC 120, Bocock J.).
Précis: The taxpayer was a police officer. In 2006, as a result of several charges under the Criminal Code relating to incidents in 2004, he was suspended with pay. He incurred $115,996.00 in legal fees between 2007 and 2011. In 2012 he claimed to deduct those expenses against his employment income and CRA disallowed the deduction. He then appealed to the Tax Court. He argued, variously, that the legal fees protected his salary income, his potential pension income and income from certain properties in which he had an ownership interest. The Tax Court rejected his arguments, holding that the payments were personal in character and therefore not deductible. His appeal was accordingly dismissed with costs in accordance with the tariff.
Decision: The taxpayer based his claim for deduction of his legal fees on three assertions:
[2] Mr. Geick appeals and asserts there were three bases upon which such legal fees are deductible. Succinctly put, his grounds of appeals are:
(i) any criminal conviction, which was defended by payment of the legal fees, if proved against Mr. Geick would have resulted in the loss of his employment income (“employment loss”);
(ii) a long and arduous claim process for pension benefits ensued culminating in payments in 2012 of a commuted lump sum in respect of which certain legal fees were expended to access the pension funds (“pension impairment”); and
(iii) Mr. Geick’s loss of employment would have resulted in seizure by creditors of five rental properties because Mr. Geick’s creditworthiness would have been destroyed (“property seizure”).
The Court rejected each of these claims holding that the payments were personal in nature and therefore not deductible:
[25] In conclusion, the appeal is dismissed. Mr. Geick incurred the legal expenses solely to protect his future source of income as a police officer. His vested pension, which he immediately began collecting upon retirement which, in turn, followed a conviction on at least one criminal charge, was never at risk or owing, but unpaid. Further, there was no evidence regarding his vaguely described interests in rental properties or their risk of seizure should he have lost his job.
His appeal was accordingly dismissed with costs in accordance with the tariff.