See Also
Brock v. MNR, 91 DTC 1079 (TCC)
Lamarre Proulx J. rejected a submission that under the laws of Ontario interim accounts rendered by a solicitor are not enforceable and, in any event, found that the statements of account rendered in connection with the taxpayer's law practice were not worded so as to constitute true interim bills of account.
Administrative Policy
28 May 2014 T.I. 2014-0531461E5 - Paralegals and work in progress election
[T]he province of Ontario and the Law Society of Upper Canada have created a two tiered system: the practice of law by barristers and solicitors (and members of the Barreau du Québec) and the provision of legal services by paralegals. Accordingly, as paralegals in Ontario are not barristers or solicitors, they do not meet the definition of "lawyer" in the Act and may not make the work in progress election under section 34.
15 October 2013 Memorandum 2013-0491951I7 F - Travaux en cours au moment du retrait d'un associé
On June 30 of Year 1 all (or some?) of the individual partners of a Canadian professional partnership who have made the s. 34 election in accordance with s. 96(3) withdraw from the partnership and form a new partnership with a fiscal year end of July 11 of Year 1. The s. 249.1(4) rule applies. After adverting to the application of ss. 98(5) and (6) in the context of the redacted facts, CRA stated (TaxInterpretations translation):
[A]n election can be made by the partners…to exclude from their income for the fiscal year ending on July 11 of Year 1 the WIP which was allocated to them on their departure from the [predecessor partnership].
Under paragraph 34(a), no particular form is prescribed for making the election. The taxpayer can make the election with respect to a particular professional partnership by attaching a letter to the taxpayer's return of income in which the election is specified with respect to the practice or by indicating clearly in the financial statements, or in a joint net income reconciliation, that the election is made.
25 August 1992 T.I. 921739 (April 1993 Access Letter, p. 136, ¶C20-1143; Tax Window, No. 23, p. 17, ¶2139)
The s. 34 election is not available to a taxpayer who carries on an insolvency practice as his primary practice, rather than as an incidental part of his accounting practice.
20 September 1991 T.I. (Tax Window, No. 9, p. 22, ¶1464)
No s. 34 election is available for the business of a patent agency even if the business is carried on by a partnership of which a lawyer is a partner.
19 September 89 T.I. (February 1990 Access Letter, ¶1104)
The total cost of professional labour including employee benefits will be work in progress, but fixed or indirect overhead costs such as rental, secretarial and general office expenses will not be included.