Clothing is generally not a tax-deductible expense. Nevertheless, every once in a while a taxpayer is adamant that the cost of his or her clothing should qualify for a tax write off and takes the matter all the way to court.
Take the recent case of Quebec lawyer Thérèse Desgagné, who regularly appears before the courts. In some cases, she must wear a formal black gown while in other circumstances, when the gowns are not required, she has to wear "dark clothing."
For example, rule 36 of the "Rules of practice of the Superior Court of Québec in civil matters" states "the female attorney or female articled student shall wear a sober skirt or trousers with a blouse and jacket, dress or tailor-made suit."
Ms. Desgagné testified that she "bought black clothing for these purposes" and "that it is not her style to wear such black clothing" but only wears it to go to court and on work days when she must go to court. She further testified that on days where she doesn't go to court, "she does not normally wear the clothing at issue."
In 2006 and 2007, the two years under review by the Canada Revenue Agency, Ms. Desgagné bought black clothing and depreciated it for tax purposes using the capital cost allowance system for tax depreciation. In prior years, she did the same thing. When reassessing her, the CRA was prepared to allow the cost of her gowns and bands to be depreciated but denied the cost of her black clothes.
While Ms. Desgagné cited a previous Tax Court ruling which allowed a lawyer to deduct clothing costs, the judge stated that this prior case was likely only referring to the cost of "very specialized clothing such as the gown and bands that, in practice, are only worn in court."
Ultimately, the judge was not persuaded and concluded that "(i)ntrinsically, the cost of purchasing clothing is generally a personal expense which is not deductible under - the Income Tax Act. It is only in special circumstances that clothing purchases are not considered a personal expense."
The judge went on to say that even though it is "dark clothing," it's still clothing that can be worn "in general at work or elsewhere. It is not very specialized clothing or a uniform."
A similar result occurred a few years ago when B.C. financial advisor Hans Rupprecht attempted to de-duct more than $8,400 of suits, ties, shirts and accessories he purchased and wore to work as a certified financial planner and "only for work purposes," claiming he needed "suitable clothing" to go with his new office.
In that case, the court concluded that "clothing is prima facie a personal expense." As the judge wrote, "Expenses relating to one's personal appearance are the very essence of a personal expense and involve choices made by a taxpayer in pre-paring him or herself for work."