Section 67.6: "In computing income, no deduction shall be
made in respect of any amount that is a fine or penalty (other than
a prescribed fine or penalty) imposed under a law of a country or
of a political subdivision of a country (including a state,
province or territory) by any person or public body that has
authority to impose the fine or penalty."
An expense is generally deductible for tax purposes if the
taxpayer incurs it for the purposes of gaining or producing income.
Under accounting principles, a taxpayer may usually deduct expenses
incurred from illegal acts to the extent that he or she incurs them
for the purpose of earning income. However, for public policy
reasons, the Income Tax Act limits this principle in the
case of fines and penalties.
