The taxpayer incurred legal costs in order to collect arrears of support (for the benefit of children born of the marriage) from her ex-spouse, to obtain increased support from him for the benefit of the son born of their marriage, and in order to be relieved of any support obligation towards her adult daughter (who was no longer living with him).
After noting the distinction in Burgess between (deductible) expenses incurred to enforce or preserve an existing right to support and non-deductible incurred to create a new right, CRA affirmed its position in in Income Tax Technical News No. 24 (contrary to the Burgess view that there is the creation of a new right in this situation) that it accepts that “legal fees incurred to obtain spousal support under the Divorce Act, or under provincial law in the case of a separation agreement, are legal fees that were incurred to enforce an existing right to support,” so that such costs are deductible in computing the taxpayer's income. CRA further indicated that “because both the father and the mother have an obligation to support their children … where court costs have been incurred to increase child support or to make child support non-taxable, the CRA accepts that those costs are deductible in computing the taxpayer's income.”
CRA concluded:
[T]he taxpayer would be entitled to deduct the portion of the court costs incurred in collecting the arrears of support from her former spouse. Those expenses are of a current nature.
…[T]he taxpayer's right to deduct the portion of the court costs that relate to the taxpayer's objective of being relieved of any support obligation towards her adult daughter.
[W]ith respect to the taxpayer's claim for increased support from her former spouse for the benefit of the son born of the marriage … the underlying legal expenses are [not] deductible from the taxpayer's income. Although the jurisprudence indicates that the right to such support is not extinguished by the dissolution of the marriage and that the related legal fees are current in nature … the amounts claimed by the taxpayer [do not] truly constitute support, since the taxpayer has no discretion as to the use of the funds under subsection 56.1(1) and the definition of "support" in subsection 56.1(4).
… [T]he fact that the legal proceedings are currently suspended can [not] affect the deductibility of the expenses in question.