🚀 go-pugleaf

"PST" <jeff@pstdvr.com> wrote in message 
news:4863eb94$0$4051$9a566e8b@news.aliant.net...
>
> "Alan Baggett" <canada.revenueagency@hotmail.com> wrote in message 
> news:35f329c8-e056-4e04-b013-4dcaf6e32e21@34g2000hsf.googlegroups.com...
> Golf Hater wins Canada Revenue Agency Court Battle : CRA SOTW
>
> TAX LAW: RECEIVED VALUE V. CONFERRED VALUE
>
> Executive who hates golf wins battle over 'benefit' of course
> membership
> PAUL WALDIE
>
> June 18, 2008
>
> TORONTO -- When Henry Rachfalowski joined Canada Life Financial Corp.
> in 1998 as a senior executive, the firm offered to pay for a golf club
> membership as part of his employment package. But there was just one
> problem: He hated golf.
>
> Mr. Rachfalowski asked whether the company could give him cash instead
> or pay for a membership at a curling club. His bosses refused, saying
> he would look like a maverick or rebel and wouldn't fit in if he
> didn't join a golf club.
>
> Mr. Rachfalowski reluctantly agreed and joined the Barrie Country
> Club, near his home in Midhurst, Ont. Canada Life covered the $5,000
> initiation fee and the roughly $2,000 annual membership. He went to
> the club's dining room a few times with clients and even played a
> couple rounds, before giving up because he was so bad.
>
> In 2005, the Canada Revenue Agency reassessed Mr. Rachfalowski's taxes
> for 2002 and included the $2,049 annual fee in his income. The CRA
> said it was a taxable benefit.
>
> Print Edition - Section Front
>  Enlarge Image
>
> Mr. Rachfalowski balked. "A golf membership for someone who hates golf
> and does not golf is not a benefit," he argued. "The value of
> something that is received can be much different than the value
> conferred."
>
> The CRA wouldn't budge. The membership fee was a "perk, a symbol, and
> a demonstration that rank has its privileges in the corporate
> structure; it provided you with an economic benefit," the agency told
> him. "The courts have established that a benefit is a benefit even
> when unilaterally conferred. Therefore, the fact that you did not like
> golfing should not be determinative."
>
> Mr. Rachfalowski took his case to the Tax Court of Canada. During a
> hearing in April before Mr. Justice Donald Bowman, Mr. Rachfalowski
> argued that Canada Life benefited from the membership, not him.
>
> "Moreover, declining the membership would have put [Mr. Rachfalowski]
> at odds with his boss and his peers, all of who had accepted the
> benefit," he explained, according to court filings.
>
> Lawyers for the CRA said the membership was for Mr. Rachfalowski, not
> the company, and it didn't matter whether he disliked golf, the mere
> availability of the benefit was enough for it to be taxed.
>
> The hearing also examined the definitions of "enjoy," "benefit" and
> "receive."
>
> In the end, Judge Bowman sided with Mr. Rachfalowski and ordered the
> CRA to exclude the membership fee from his 2002 income.
>
> In his ruling, released this week, Judge Bowman reviewed several
> employee benefit cases and said they all came down to one question:
> "Just what did the employee get out of the alleged benefit that ought
> to increase his or her income?"
>
> Not much in Mr. Rachfalowski's case, the judge found.
>
> From Mr. Rachfalowski's "point of view, the membership was clearly not
> an advantage to him. He did not even want it," the judge said in his
> ruling. "It is a fair inference that the employer wanted its senior
> executives to belong to a golf club. It enhanced the company's image
> and prestige and provided a place for its executives to entertain
> clients of the company. I do not think the employer's insistence that
> he join a golf club (or at all events, the very strong pressure the
> employer put on him to do so) is particularly attributable to
> paternalistic altruism. Objectively, I think the membership in the
> golf club was primarily for the benefit of the employer."
>
> Mr. Rachfalowski left Canada Life in 2003 after it was taken over by
> Great-West Lifeco Inc.
>
> When asked to comment on the case and his view of golf, Mr.
> Rachfalowski laughed and replied: "I would prefer not to enhance the
> notoriety of this at all."
>
> A spokeswoman for the CRA declined to comment on the case but said the
> decision will not be appealed.
>
>
> -----------------------------------------------------------------------------------------------------
> Miss a Tax Tale Miss a lot!
> Pop the link below into your browser to view the entire CRA SOTW
> Library!
> http://canada.revenue.agency.angelfire.com
> -------------------------------------------------------------------------------------------------------
> Alan Baggett - Tax Collector's Bible
>
>
>
> Yeah! Fuck golf!

A complex, well though out response.  Good on ya.