Worst Perk of the Week: A Higher Tax Bill

Those who believe hate is a purely destructive force do not know Henry Rachfalowski. And golf enthusiasts, it's safe to say, won't care to ever meet him.

When Rachfalowski joined the Canada Life Financial Corp. as a senior executive in 1998, the firm offered, as part of the employment package, to pay for his membership to a golf club -- a $5,000 initiation fee in addition to the $2,049 annual membership.

The only problem was that Rachfalowski doesn't play golf. Doesn't particularly like it.

Rachfalowski suggested Canada Life pay for a curling club membership instead. The company balked, worried that it would make him seem to be too much of a maverick, so Rachfalowski reluctantly agreed to accept the golf club membership.

But his aversion for the sport surely turned to loathing when, in 2005, the tax man from the Canada Revenue Agency reviewed Rachfalowski's 2002 filing and deemed that the $2,049 annual golf club fee was a taxable benefit.

"A golf membership for someone who hates golf and does not golf is not a benefit," argued Rachfalowski, according to the Globe and Mail in Toronto. "The value of something that is received can be much different than the value conferred."

The Canada Revenue Agency did not budge, arguing that the membership was a perk that provided Rachfalowski with economic benefit. But a resolute Rachfalowski took his case to the Tax Court of Canada.

During an April hearing the Court sided with Rachfalowski and ordered the C.R.A. to exclude the membership fee from his 2002 income.

Canada Life Financial, the Court argued, benefited from Rachfalowski's membership because it "enhanced the company's image and prestige and provided a place for its executives to entertain clients of the company."

Tennis anyone?

by Alfonso Serrano F.