The taxpayer was an opera singer. In 1997, she entered a vocal
competition organized by the Gerda Lissner Foundation. The taxpayer won the
competition and from 1997 to 2006 she received monies for the
payment of singing coaches, stage training, accommodation and
travel expenses. The CRA reassessed the taxpayer to include in her
income the amounts received from the Foundation.
Under paragraph 56(1)(n), a taxpayer must include in his/her
income any amount received as or on account of a prize other than a
"prescribed prize". Section 7700 of the Income Tax
7700. For the purposes of subparagraph 56(1)(n)(i) of the Act, a
prescribed prize is any prize that is recognized by the public and
that is awarded for meritorious achievement in the arts, the
sciences or service to the public but does not include any amount
that can reasonably be regarded as having been received as
compensation for services rendered or to be rendered.
In this case, the Crown conceded that the prize was recognized
by the public and was for meritorious achievement in the arts.
However, the Crown argued, the prize was paid as compensation for
services. In the Crown's view, the taxpayer had undertaken
certain activities (coaching, training, career development, etc.)
for, and provided services to, the Foundation in exchange for the
The Tax Court found that the taxpayer had provided no services
to the Foundation, and that the activities undertaken by the
taxpayer were consistently comprised of training, support and
education to enhance her performance abilities:
The identification of the appellant as someone worthy of
specialized study and training was the basis for awarding the prize
from the Foundation's perspective. This prize was not a
relationship of, or in substitution for, employment, but a prize
awarded on merit with reasonable conditions attached in order to
ensure that the burgeoning talent identified was further refined by
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