A marketing and communication agency (the "Corporation"), as part of its engagements for raising awareness of client products, incurs restaurant bills, which it included in its fee quotations to the clients, but for which did not specifically include in its invoices rendered in accordance with those estimates. In finding that the s. 67.1(2)(c) exclusion did not apply, CRA stated:
The purpose of paragraph 67.1(2)(c) is to allow a taxpayer to deduct the full amount of expenses related to food, beverages or entertainment where the taxpayer has clearly indicated to the payer the amount of such expenses included in the bill, so that the payer is subject to the subsection 67.1(1) limit instead of the taxpayer. …
Given that the purpose of paragraph 67.1(2)(c) is to exempt the taxpayer only where the payer is subject to subsection 67.1(1), we are of the view that the words "specifically notified in writing" used in the wording of paragraph 67. 1(2)(c) assume that there is no ambiguity as to the amount subject to subsection 67.1(1) in the hands of the payer, in order for the taxpayer to be able to rely on the exemption in paragraph 67.1(2)(c).