Forced to pay / belong to a mess [Merged]

[ZipperHead]

I was auditted for trying to pull this stuff (based on the misguided advice of one of my buddies, who as it turns out had never done it, but I suspect thought it would be humourous to see who would follow his weak advice). Guess what?? I had the pleasure of paying back about $200 to the good old CCRA (Revenue Canada at the time, I believe).

There is, I believe, an area where you can claim "Military Grooming" as an acceptable expense, but receipts must be provided, for a maximum of $200, IIRC. I think that is what my buddy was goin on about originally, but not too many people keep receipts for cans of Kiwi polish, Brasso, etc. Try it at your own peril, MARS2INF. I suggest asking H&R Block if it's good to go, as they will back you in an audit, if I'm not mistaken. If they won't back you, it definitely doesn't pass the smell test.

BTW, the "audit" that I went through wasn't as painful as I had been led to believe by popular culture (TV, movies). They phoned me, enquired about what it was that I thought entitled me to claim this expense, asked for receipts (which, of course, I didn't have, as I am a dumbass), and then info'ed me how much I had to pay back to the Man. Pretty painless, though a little humbling.

Al

 

[Journeyman]

BTW, the "audit" that I went through wasn't as painful as I had been led to believe by popular culture

When I got out of the RegF and went back to school, it apparently triggered some CCRA Audit Alarms - - "last year your income was big bucks, and this year it's pennies; you're clearly not claiming everything and trying to defraud the Governor General of her party funds - - AUDIT!!"

I've been audited every year since. It's not painful, per se, (like watching an Adam Sandler film-o-thon, or rubbing salt & vinegar chips into a recent vasectomy)......but it IS a pain in the butt. I now keep all receipts (organization is not a natural strength of mine), and get grown-up assistance doing taxes each year.

So, if you you can avoid getting on their audit list (say...by not trying to claim a freakin' Mess Dinner), I'd do so.

 

[TMM]

I suggest asking H&R Block if it's good to go, as they will back you in an audit, if I'm not mistaken.

I used to work for Block and another tax firm; that was years ago but don't attempt to write off your mess dinners! All of us workers at some point or another have to shell out of pocket for work related social activities and they are not deductible.

H&R Block will only back you up if they did the return.

 

[IN HOC SIGNO]

I had a buddy claimed his mess kit as a business expense....he got slapped with an audit and it didn't work...he tried to claim his Mess dues too and that also did not work....Revenue Canada is all over this and has been for years...but by all means if this generation has to learn things by experience....GO FOR IT!

As far as knucklehead and his objections to the traditions of this institution go....I think they're looking for workers out in Alberta in just about every field you could think of....why don't you try there...those are jobs...this isn't! :

 

[Meridian]

Straight from CRA itself:

http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/return/completing/deductions/lines206-236/229/menu-e.html

Note
Most employees cannot claim employment expenses. You cannot deduct the cost of travel to and from work, or other expenses, such as most tools and clothing.

See the link for more in-depth discussions of where you can claim it.  For example, travel can be claimed where you are required to travel away from your normal place of work (and you are not compensated for it).  Example, if you work for a consulting firm with head office a (where you are normally located, or where your Paystubs have the office address),  and you have to go to various client offices in the city, you can claim those costs, unless your employer compensates you for them (and thus claims it themselves).

I note there is no mention of uniforms, etc, but I didn't look that far. I would expect that Mess Kit would fall under a socially-required thing, though Im sure you could argue through an audit appeal that you were required to purchase it and depending on rank you are required to attend the social functions for work purposes.  Wouldn't be a fun fight though.


Oh, and you will always automatically lose if you do not have receipts, even if your reasoning is sound.

 

[Blackadder1916]

I have been through this both personally and representing clients.

..."You can deduct certain expenses (including any GST/HST) you paid to earn employment income. You can claim the expenses only if your employment contract required you to pay them, and either you did not receive an allowance for the expenses, or the allowance you received is included in your income."

That said, when ordered to have items dry cleaned, ordered to attend certain functions, then am I not required to pay for them, as referenced above?

"Most employees cannot claim employment expenses."  (from CRA website)

To claim employment expenses your employer must complete Form T2200 Declaration of Conditions of Employment – Your employer must now complete the entire T2200 (both Part A and Part B) and then give you a copy for your records. For more information, http://www.cra-arc.gc.ca/E/pbg/tf/t2200/README.html

Now, try to get someone in the CF with the authority to do so.  (or state in writing that you are required to incur these as employment expenses but they refuse to complete form T2200)

Mess Dues are akin to Union Dues

No they are not ...Union dues are union dues.  And we all would b**** like hell if the CF was a union shop.

Professional membership dues are professional membership dues...
"a) they are annual dues (in contrast with entrance fees) necessary to maintain professional status,
(b) the amount claimed is paid in the taxation year and the employee is not reimbursed or entitled to be reimbursed, and
(c) the professional status is recognized by a Canadian, provincial, or foreign statute."

If it is mandatory, then it should be (though it isn't)

I agree, but you may have a struggle to convince CRA of your opinion.  CRA's job is to interpret and enforce the Income Tax Act and its ensuing regulations, not the National Defense Act.  I remember seeing somewhere on a DND/CF page a statement to the effect that taxation is a personal matter between the member and the CRA but they also include a warning against trying to cheat.
Back in the day, I went through this with Rev Can when claiming mess dues and mess kit as employment expenses.  On review, their initial ruling was that as "a personal benefit" was derived from the mess dues they were not eligible as an employment expense.  The personal benefit can be interpreted as receiving a departure gift from the mess, meals/snacks put on during happy hour (when that was allowed), or the subsidization of entertainment/events among other things.  (For a mess dinner the personal benefit is the growlies you wolf down and the vino you swill.)  If an individual were able to obtain a receipt that showed the portion of mess dues that give no personal benefit (or possible personal benefit) whatsoever, then he may have a slim chance at convincing CRA that it may be a legitimate employment expense.  Surprisingly enough the BFOM (ahh, the memories) mess receipts did break down your dues into separate allocations.  As for the mess kit, the interpretation has changed over the years and, now, no clothing is claimable as an employment expense.  For both these items I quoted the applicable orders and made the case that as they stemmed from the NDA, I was required by law to incur the expenses and was not reimbursed by my employer except for a portion by way of CUA.  When it all came out in the wash, the additional refund was less than $75 but if I had been paying someone (at current rates) to do the necessary work, I’d be in the hole several hundred dollars.

When dealing with CRA it is necessary to be honest as well as thorough. CRA may be less amenable now to allowing (on an individual basis) such claims as these under employment expenses due to the new Employment Credit that is supposedly aimed at the expenses that many employees (not just soldiers) incur in their jobs.
Budget 2006 proposal - introducing the new Canada Employment Credit—a tax credit on employment income up to $500 effective July 1, 2006, to help working Canadians. The credit amount will double to $1,000 as of January 1, 2007.

 

[MARS2INF]

So, if you you can avoid getting on their audit list (say...by not trying to claim a freakin' Mess Dinner), I'd do so.

If in doubt, call the SISIP folks. They'll know what to do with regards to the specific cases for military personnel and tax implications. Of course, every case is individual.

And as for the mess kits... I never even considered the implications of shelling out close to a grand for Mess Kit. Might be worth going to SISIP to inquire about that one, too...

 

[Spartan]

http://forums.army.ca/forums/threads/37747/post-319464.html#quickreply

as for mess dues.... I deduct em under the Union dues heading on my annual tax return
and have been doing so for some 30 years.

From another related topic: Just an old post that was in response to me earlier about this....
Thanks for the clarification.

 

[George Wallace]

I suppose, not being caught up, or audited, by CRA is all you need to justify your stance, then go for it.  :

 

[gaspasser]

  I've heard of some people claiming Mess Dues, mess dinners, boot polish and clothing (prior to points), etc, on thier income returns for years and getting away with it?  Some of those expenses can add up to big buck$$  We've been wanting to do so for years but feared the outcome of fraud. I've heard also that people have tried, got caught and denied the expence.
Anyone out there know if it's possible??? My 9er gets pissed every year about mess dues because we don't freguent the extablishment at all.  We do our entertaining at home. (less MP's to bother me in my comfy chair)
Thanks, GP

 

[Meridian]

You can try anything; if you get "audited" or "reviewed", they will deny you and you will have to pay it back + interest.  Now if you can get a better rate of return than the interest they charge (and if you can, please let me know how!) then I suppose its essentially  cash flow positive for you.

You wont get charged unless you keep doing it, or you should have clearly known not to. 

Also, the more things on your review that you claim, the apparent higher likelyhood that you are reviewed.  And if you are reviewed and they find something they tend to KEEP reviewing you.

Ie they did this to me, one year I claimed rent credit in Ontario, but was living with a buddy who was the only one on the lease. 2 years later they audited that, and asked for proof. I couldnt get any; was no longer in contact with him.  Managed to get about half of it proved via cheques I had written (the other were cash, and I was SOL).  Since then they have reviewed EVERY YEAR.  (Asking for tuition receipts usually).

 

[X Royal]

Spartan, no it is not akin to paying union dues.  I'm sure some brighter than me can give you the exact answer but in general, union dues are deemed a mandatory requirement to belong to a professional and self regulating organization.  Nurses, doctor's, trades people can claim their dues as they must belong to the organization in order to be certified by the provincial regulatory body.  For example, a nurse cannot work unless she/he are licensed in the province in which they work. 

Even though mess dues are mandatory (by CFAO), they are not mandatory in a professional manner. 

Gunner your explanation on union dues is to be honest all wet. You are confusing membership fees to professional regulatory organizations (ie: for doctors, nurses, electricians ect.) with union dues. Nurses for example have to be registered with their provincial regulatory body to be licenced but not all pay union dues. Nurses at large hospitals are usually in a union. Nurses at small doctors offfices seldom are in unions. Union dues are paid when your work place is covered by a union contract. Many people in the workforce work at places that are unionized and a required to be members to work there. These places cover everthing from professionals to janitors any most other jobs in between. Most of your civilian employees in the DND are unionized.

Best Wishes

 

[Gunner]

Gunner your explanation on union dues is to be honest all wet.

I think that is why I added the caveat "someone brighter then me can give you the exact answer".  But thanks for going out of your way to point out what I already had. 

I would submit to you that a nurse must belong to a union in order to work.  The nurses union acts as their professional body and self regulates its members behavior. 

Cheers,

 

[George Wallace]

Union Dues also go into things like the 'Strike Fund' which pays the members should they be on Strike.  I highly doubt that your Mess Dues would go forward to paying any wages should you ever go on 'Strike'  ;D but they do allow you to be a member of a 'Private Club'.  Do you get to claim your Membership in any Golf, Curling, Social, or other Club or Organization?

 

[IN HOC SIGNO]

I think that is why I added the caveat "someone brighter then me can give you the exact answer".  But thanks for going out of your way to point out what I already had. 

I would submit to you that a nurse must belong to a union in order to work.  The nurses union acts as their professional body and self regulates its members behavior. 

Cheers,

Not exactly...my wife is a nurse., she pays Registration dues to the Nova Scotia Nurses Association and Union Dues at the Hospital...both of which are tax deductible. The Association is the professional body that regulates...the union negotiates the collective agreements etc....they don't act as a professional watchdog. You are quite right though she has no choice in being a member or either group and must be a member of both in order to practice her profession.

 

[Meridian]

The other thing is that union fees/dues are usualy directed at source and forwarded to the union. *usually*.  In this case, your T4 includes the union fee deductions for reporting to CRA, and CRA receives this data automatically from your employer.  It is also cross-referenced when the union does their own return.

 

[Gunner]

Not exactly...my wife is a nurse., she pays Registration dues to the Nova Scotia Nurses Association and Union Dues at the Hospital...both of which are tax deductible. The Association is the professional body that regulates...the union negotiates the collective agreements etc....they don't act as a professional watchdog. You are quite right though she has no choice in being a member or either group and must be a member of both in order to practice her profession.

Ack. 

Professional Organization:

Alberta Association of Registered Nurses http://www.nurses.ab.ca/

Union

United Nurses of Alberta http://www.una.ab.ca/

 

[X Royal]

Not exactly...my wife is a nurse., she pays Registration dues to the Nova Scotia Nurses Association and Union Dues at the Hospital...both of which are tax deductible. The Association is the professional body that regulates...the union negotiates the collective agreements etc....they don't act as a professional watchdog. You are quite right though she has no choice in being a member or either group and must be a member of both in order to practice her profession.

Generally correct but she does not have to be a member of both to practice her profession. If she elected to work in a non union place she could still practice her profession. Working in a unionized hospital is the reason she has to be a member of the union. If she decided to work in a small doctors office in most cases she would not be required to join a union or pay dues. This route in most cases would also result in smaller paychecks and less benefits. But she could still practice nursing and not be a member of a union.

 

[IN HOC SIGNO]

Generally correct but she does not have to be a member of both to practice her profession. If she elected to work in a non union place she could still practice her profession. Working in a unionized hospital is the reason she has to be a member of the union. If she decided to work in a small doctors office in most cases she would not be required to join a union or pay dues. This route in most cases would also result in smaller paychecks and less benefits. But she could still practice nursing and not be a member of a union.

Quite so but then she wouldn't be able to keep me in the style to which I have become accustomed!! ;D

 

[Fishbone Jones]

The official answer was already stated awhile ago. Now the thread has wandered down a whole different trail without leaving any breadcrumbs. If you've got anything to add..................