Paying for Someone Else's Tax Appeal: Is It Deductible?

Tax appeals can be costly, and family members sometimes help cover legal expenses. But does the person paying those costs get to deduct them?

An August 13, 2026 Tax Court of Canada case considered a taxpayer who paid expenses for her son-in-law's appeal to the Federal Court of Appeal and attempted to deduct those costs.

Taxpayer Loses

The court acknowledged that a strictly literal reading of the provision could support the deduction. However, reviewing the law's context and purpose, it concluded that the deduction could not extend to an unrelated payer with no financial interest in the appeal. Narrow exceptions may apply in situations involving heirs, executors, successors or alter egos.

The taxpayer could not deduct the expenses. The son-in-law also could not claim them because he had not incurred the costs himself.

Action: Before a family member pays tax appeal expenses, obtain advice on who should incur and pay them and whether a deduction will be available.