14 August 1989 Income Tax Severed Letter AC74037 - Deductibility of Voluntary Membership Fees

August 14, 1989

Assessing and Enquiries                       Small Business and
  Directorate                                 General Division
Enquiries and Taxpayer                        J.D. Jones
  Assistance Division                         613-957-2104

Attention:  P McNally
            Director
                                         File : 7-4037

Subject: 19(1)

This is in reply to your memorandum of June 16, 1989, wherein you
requested our opinion with respect to the deductibility of
voluntary membership fees paid to the                       24(1)

It is your view that the            24(1)         is not
deductible pursuant to subparagraph 8(1)(i)(iv) of the Act due to
the wording in subsection 8(1) of the Act which states, in part,
that "...there may be deducted such of the following amounts as
are wholly applicable to that source or such part of the
following amounts as may reasonably be regarded as applicable
thereto:"

                      24(1)

We have reviewed the information contained in the letter of March
7, 1989, from the      24(1)    submitted with your memorandum
and offer the following comments.  It is our view that the annual
membership fee paid by voluntary members may be deductible
pursuant to subparagraph 8(1)(i)(iv) of the Act as it represents
annual dues paid to maintain membership in a trade union and the
dues may reasonably be regarded as applicable to the members'
employment income.

In interpreting whether the amount may be applicable to an office or employment for the purposes of subparagraph 8(1)(i)(iv) of the Act, we feel the following comments contained in paragraph 2 of IT-158R are applicable:

"In determining whether a payment is applicable to an office or employment for the purposes of 1 above, such a payment need not be essential for an employee to hold a position or job. However, there must be a reasonable degree of relationship between it and the position or job".

                      21(1)(a)

With respect to your view that a voluntary member does not actually hold a "membership" in the

                        24(1)

It is our view that an individual would hold a "membership" in
the     24(1)    once the executive had accepted an individual as
such.  If the executive decides not to accept an individual for
membership the annual fee is returned in which case no claim
would be made by that individual with respect to the     24(1).  

Concerning the rights and privileges of a voluntary member,
Article V, Section 2 of the       24(1)     provides that a
voluntary member enjoys the same rights, privileges and
responsibilities as any other member other than tenure services
and financial support in the event of a strike.  It is our view
that these restrictions are not sufficient to deny the status of
"membership" to the voluntary members.

Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch