Citation: 2013 TCC 249
Date: 20131108
Docket: 2012-1007(IT)I
BETWEEN:
HAJRUDIN HEDZIC,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Docket: 2012-1008(IT)I
BETWEEN:
FIKRETA HEDZIC,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
AMENDED REASONS FOR JUDGMENT
D'Auray J.
[1]
The appellants,
Hajrudin Hedzic and Fikreta Hedzic are challenging the
assessments made by the Minister of National Revenue (the Minister) for the
2007 and 2008 taxation years. The Minister added to Mr. Hedzic and Ms.
Hedzic's income $15,790 for 2007 and $25,651 for 2008 as undeclared income. Mr.
and Ms. Hedzic (the Hedzics) had each declared $19,160 for the 2007 taxation
year and $14,216 for the 2007 taxation year.
[2]
Penalties were also
imposed under subsection 163(2) of the Income Tax Act (the Act).
According to the Minister, the Hedzics knowingly or under circumstances
amounting to gross negligence made a false statement or omission in their
income tax returns for 2007 and 2008.
[3]
The appeals were heard
on common evidence. Mr. Hedzic acted as agent for his spouse, Fikreta Hedzic,
and represented himself.
Facts
[4]
Mr. Hedzic was a
jurist in Bosnia. Because of the war in Bosnia, he came to live with his spouse
in Québec. When he arrived, he worked in Île d’Orléans on a berry farm. He also
worked as a delivery person at a pizzeria before buying a share in a
restaurant, which he sold in 2003 for $20,000.
[5]
In 2001, he bought a
grocery store that specialized in European products. He sold this store in 2003
for $32,500.
[6]
In 2003, he and his
spouse also opened a pizzeria, doing business as Pizza Jumelle 2003, located at
833 Myrand Avenue in Québec.
[7]
The Hedzics have three
children: two girls, Alma and Amra and a boy, Amer. During the years in
question, the Hedzics were not financially responsible for their children,
although they occasionally provided them with financial assistance. Amer worked
at the pizzeria during the years in question.
[8]
At the hearing, the
Hedzics brought eight boxes of documents containing invoices issued at the
pizzeria and during deliveries, as well as all the cash register Z‑tapes
for the years in question. However, the Hedzics did not present any
reconciliation between the invoices and the cash register Z‑tapes to
evidence.
[9]
Mr. Garneau from
the Canada Revenue Agency (CRA) testified for the respondent. He conducted an
audit of the Hedzics' files. He is a CMA and has been working for the CRA for
4½ years. Prior to that, he worked for the Agence du revenu du Québec and in
the private sector.
[10]
Upon review of the
Hedzics' tax returns, Mr. Garneau found that the reported income was low. He
therefore analyzed various methods for determining the gross income of the
pizzeria before choosing the net worth method. He reviewed the pizzeria's sales
over a 6-day period and this method was inconclusive, because the total of the
invoices did not equal the total of the cash register Z-tapes. He also analyzed
the deposits, which was also inconclusive because Mr. Hedzic took money from
the cash register to pay for certain expenses at the pizzeria, so not all the
earnings were deposited. The method of calculating pizza boxes was also
inconclusive; the pizzeria had a varied menu and one box did not necessarily
equal one sale. He therefore proceeded with the net worth method.
[11]
With the Hedzics'
authorization, Mr. Garneau obtained the credit card statements, bank
statements, entry and exit records for the safety deposit box, statements
regarding vehicles registered in the Hedzics' name, a report from Equifax
Canada and other documents relevant to the net worth from financial
institutions and government organizations.
[12]
Reproduced in the
appendix is the net worth established by the Minister of National Revenue.
[13]
Mr. Hedzic claims that
the Minister erred:
(i)
by not taking into
consideration the amounts held in their safety deposit box, after the sale of
the two businesses in 2003 and not considering his salary and that of his
spouse;
(ii)
by adding to the
non-current assets in 2008, assets the Hedzics did not own;
(iii)
by erroneously adding
personal expenditures. These expenditures are indicated under [translation] "personal
expenditures—other expenditures" in Appendix IV of the net worth.
Analysis
[14]
In cases involving net
worth, it is the taxpayers who have the burden of proof. It is the taxpayer who
must prove that the amounts making up the net worth established by he Minister
are erroneous.
[15]
In Léger v Her
Majesty the Queen, 2001 DTC 471, [2003] 1 CTC 2437, my colleague
Archambault J. addresses the burden of proof, citing Bastille rendered
by Favreau J. and Ramey rendered by Bowman J., at paragraphs 13 et
seq:
[13] First of all, the burden of proof resting on Mr.
Léger in his appeals must be dealt with. My colleague Judge Tardif had an opportunity to discuss the burden of
proof in a case that, like this one, raised the issue of the use of the net
worth method.
[14] In Bastille
v. R., 99 DTC 431 ([1999] 4 C.T.C. 2155), he wrote the following
at paragraphs 5 et seq:
[5] I think it is important to point out that the burden
of proof rests on the appellants, except with respect to the question of the
penalties, where the burden of proof is on the respondent.
[6] A NET WORTH assessment can never reflect the kind of mathematical accuracy that
is both desired and desirable in tax assessment matters. Generally, there is a
certain degree of arbitrariness in the determination of the value of the
various elements assessed. The Court must decide whether that arbitrariness is
reasonable.
[7] Moreover, use of this method of assessment is not the
rule. It is, in a way, an exception for situations where the taxpayer is not in
possession of all the information, documents and vouchers needed in order to
carry out an audit that would be more in accordance with good auditing
practice, and most importantly, that would produce a more accurate result.
[8] The bases or foundations of the calculations done in
a NET WORTH assessment depend largely on information provided by the taxpayer
who is the subject of the audit.
[9] The quality, plausibility and reasonableness of that
information therefore take on absolutely fundamental importance.
[15] Another of my colleagues, Judge Bowman, stated the
following in Ramey v. Canada,
[1993] T.C.J. No. 142 (QL) ([1993] 2 C.T.C.
2119, 93 DTC 791), at paragraph 6:
I am not unappreciative of the enormous, indeed virtually
insuperable, difficulties facing the appellant and his counsel in seeking to
challenge net worth assessments of a deceased taxpayer. The net worth method of
estimating income is an unsatisfactory and imprecise way of determining a
taxpayer's income for the year. It is a blunt instrument of which the Minister
must avail himself as a last resort. A net worth assessment involves a
comparison of a taxpayer's net worth, i.e. the cost of his assets less his liabilities,
at the beginning of a year, with his net worth at the end of the year. To the
difference so determined there are added his expenditures in the year. The
resulting figure is assumed to be his income unless the taxpayer establishes
the contrary. Such assessments may be inaccurate within a range of
indeterminate magnitude but unless they are shown to be wrong they stand. It is
almost impossible to challenge such assessments piecemeal. The only truly
effective way of disputing them is by means of a complete reconstruction of a
taxpayer's income for a year. A taxpayer whose business records and method of
reporting income are in such a state of disarray that a net worth assessment is
required is frequently the author of his or her own misfortunes.
[Footnotes omitted]
Current assets as of December 31, 2003
[16]
Mr. Hedzic claims
that on December 31, 2006, he and his spouse had money in possession in the
amount of $76,305.97, calculated as follows:
|
In 2003
|
|
|
|
|
Sale of restaurant in
2003:
|
$20,000.00
|
|
|
Sale of grocery store in 2003:
|
$32,500.00
|
|
|
Ms. Hedzic's income from Légubec:
|
$8,394.00
|
|
|
Total 2003
|
$61,394.00
|
|
|
|
|
|
In 2002
|
|
|
|
|
Mr. Hedzic's
income:
|
$20,602.00
|
|
|
Ms. Hedzic's income $12,261 + $8,394.25:
|
$12,621.00
|
|
|
Total 2002
|
$94,617.29
|
|
|
|
|
|
|
Funding for restaurant JumellePizza2003:
|
- $5,000.00
|
|
|
Equipment purchases for the pizzeria:
|
- $13,311.32
|
|
|
|
$76,305.97
|
[17]
According to
Mr. Hedzic, $76,305.97 was used to pay credit cards in 2007 and a
down payment on a house he and his spouse purchased in 2008. Mr. Hedzic
claims this money was put into a safety deposit box, because he did not trust
banks. He said he lost $100,000 during the war in Bosnian banks. However, on
cross-examination, the financial institution statement showed that the amounts
of $32,500 and $20,000, deposited in 2003 to the Caisse populaire
Desjardins du Vallon for the sale of the grocery store and the restaurant, were
mainly used to pay bills. Moreover, except for $10,000 for which the dates
correspond, the record of entries and exits for the safety deposit box do not
correspond with the days Mr. Hedzic withdrew money from his account at the
Caisse populaire Desjardins to deposit it in his safety deposit box.
[18]
I can accept that the
Hedzics held $10,000 in their safety deposit box on December 31, 2006. Mr.
Hedzic's testimony is supported by the documentary evidence that shows a
correspondence between the date of a $10,000 withdrawal and an entry to the
safety deposit box. And $5,000 had already been allowed by the Minister under [translation] "money in
possession—safety deposit box", the amount of $5,000 should be added to
the Hedzics' net worth under [translation]
"money in possession—safety deposit box" on December 31, 2006, and on
December 31, 2007. However, regarding the net worth of December 31, 2008, there
should not be an amount under [translation]
"money in possession—safety deposit box" since the Hedzics used this
money to purchase their house in 2008. Aside from these adjustments, there were
not other adjustments under [translation]
"money in possession—safety deposit box".
[19]
I do not accept Mr.
Hedzic's version regarding the liquid asset amounts he claimed he and his
spouse held on December 31, 2006. Mr. Hedzic's testimony on this was
particularly flexible. Mr. Hedzic, after stating they had around $95,000
then revised this in cross-examination to state they had liquid assets of
around $23,000 on December 31, 2006. The Hedzic's account at the Caisse
populaire did not reflect this amount and moreover, from the $23,000, the
Hedzics did not subtract any money for the cost of living.
Non-current assets
[20]
With regard to the
non-current assets, the Hedzics only challenged the furniture purchased from
Ameublements Tanguay and Leon's Furniture in 2008. Mr. Hedzic feels that
these amounts should not be included in the non-current assets because they
were not for him and his spouse but for their children.
[21]
No evidence was
submitted to support Mr. Hedzic's claims. All the invoices are in his name.
Mr. Hedzic did not feel the need to have his spouse or his son Amer
testify to support his version of the facts, although they were both present at
the hearing. I find it important to quote a passage from Léger regarding
a taxpayer's failure to call certain witnesses testify to confirm his or her
testimony. Archambault J. wrote the following comment at paragraph 16 of this
reasons:
[16] In the instant appeals, Mr. Léger was the only person
who testified in support of his position. The auditor whose work led to the
assessments testified for the respondent. In assessing the evidence provided by
Mr. Léger, something must be said about the failure to call certain witnesses
who could have confirmed what he said. In Huneault v. The Queen, T.C.C., No. 96-1435(IT)G, February 6,
1998, at page 7 (98 DTC 1488, at page 1491), my colleague Judge Lamarre
referred to certain statements that were made by Sopinka and Lederman in The
Law of Evidence in Civil Cases and cited by Judge Sarchuk of this Court in Enns
v. M.N.R., 87 DTC 208, at page 210:
In The Law of Evidence in Civil Cases, by Sopinka and
Lederman, the authors comment on the effect of failure to call a witness and I
quote:
In Blatch v. Archer, (1774),
1 Cowp. 63, at p. 65, Lord Mansfield stated:
It
is certainly a maxim that all evidence is to be weighed according to the proof
which it was in the power of one side to have produced, and in the power of the
other to have contradicted.
The application of this maxim has led to a well-recognized rule that
the failure of a party or a witness to give evidence, which it was in the power
of the party or witness to give and by which the facts might have been
elucidated, justifies the court in drawing the inference that the evidence of
the party or witness would have been unfavourable to the party to whom the
failure was attributed.
In the case of a plaintiff
who has the evidentiary burden of establishing an issue, the effect of such an
inference may be that the evidence led will be insufficient to discharge the
burden. (Levesque et al. v. Comeau et al., [1970] S.C.R. 1010, (1971),
16 D.L.R. (3d) 425.)
[22]
Moreover, even if these
purchases had indeed been for the children, Mr. Hedzic did not present any
evidence that the children had paid them back. The purchases were made in 2008,
the year the Hedzics bought their house. Moreover, certain invoices from
Ameublement Tanguay that Mr. Hedzic submitted to evidence were not
included in the net worth because the auditor did not have these invoices when
he established the net worth. The net worth of the non-current assets is therefore
undervalued for 2008.
[23]
In light of the
evidence, Mr. Hedzic did not convince me of the validity of his position.
There will be no change to the net worth regarding the non-current assets.
Current liabilities 2007 and 2008
[24]
The Hedzics are not
challenge any current liability amounts. However, it must be noted that most of
the fluctuations in the net worth are from the current liabilities. On December
31, 2006, the Hedzics had credit card debts in the amount of $39,830.73. On
December 31, 2007, these debts were $5,660.38. Therefore, between the end of
2007 and the end of 2008, the Hedzics spent $34,170.35 to reduce their credit
card debts, when their combined income in 2007 was $28,432.
Personal expenditures in 2007
[25]
The Hedzics have
many credit cards. In 2007, Mr. Hedzic paid certain credit cards with
other credit cards to benefit from a better interest rate.
[26]
On February 3, 2007,
Mr. Hedzic
paid his CIBC Visa Classic credit card with a cheque drawn from his Bank of
Montréal Mosaik-Mastercard for $2,427.72. On February 20, 2007, he paid his
American Express credit card with a cheque drawn from his Bank of Montréal
Mosaik‑Mastercard for $749.26. On March 5, 2007, Mr. Hedzic paid his
American Express credit card with a cheque drawn on his MasterCard-Canadian
Tire credit card for $4,000.
[27]
All these amounts were
added to the Hedzics' personal expenditures in 2007 under [translation] "Personal
Expenditures—other" in Appendix IV. Mr. Hedzic submitted to evidence
cheques to show the payments, except for $1,087.05.
[28]
The respondent claims
that these amounts were loans through their credit cards to the Hedzics'
daughter Amra. Mr. Hedzic claimed that these payments from one credit card
to another were to benefit from a better rate. I accept Mr. Hedzic's version,
and find it acceptable that the Hedzics' would want to benefit from a better
interest rate.
[29]
These amounts, except
for $1,087.05 should be removed from the amounts making up the personal
expenditures.
Personal expenditures in 2008
[30]
In 2008, the Minister
added $1,601.45 as personal expenditures under [translation]
"Personal Expenditures—Pontiac Sunfire transportation" at
appendix IV. It is clear from the invoice submitted by Mr. Hedzic that
this expense was not for his "Pontiac Sunfire" vehicle but for his
son-in-law's "Dodge Intrepid" vehicle. Mr. Hedzic indicated
that his son-in-law repaid the amount in question. I have no reason to not
believe Mr. Hedzic's testimony on this subject. Therefore, $1,601.45 should be
removed from the personal expenditures under transportation for 2008.
[31]
As he did in 2007, on
June 15, 2006, Mr. Hedzic paid $2,441 on his CIBC Dividend credit card with a
special transfer rate offered by the Royal Bank, to benefit from a better
credit rate. Mr. Hedzic submitted a copy of the transfer to evidence. This
amount should be removed from the 2008 personal expenditures, as it is simply a
transfer from one account to another.
[32]
In 2008,
$12,576.77 was also added to the personal expenditures. According to the
Minister, Mr. Hedzic paid this amount in cash as a down payment for the
house. The documentary evidence shows that no cash was used by the Hedzics to
purchase the house. As a result, $12,576.77 should be removed from the personal
expenditures.
Penalties
[33]
Despite the changes I
made to the Hedzics' net worth, gaps remain; however, they are not
substantial.
[34]
In a unanimous Federal
Court of Appeal decision, Molenaar v Canada, 2004 FCA 349,
Létourneau J. made the following comment about penalties at paragraph 4:
[4] Once the Ministère establishes on the basis of reliable information
that there is a discrepancy, and a substantial one in the case at bar, between
a taxpayer's assets and his expenses, and that discrepancy continues to be
unexplained and inexplicable, the Ministère has discharged its burden of proof.
It is then for the taxpayer to identify the source of his income and show that
it is not taxable.
[35]
In light of the
adjustments I made to the net worth, the gaps are not substantial and
therefore, the penalties imposed by the Minister under subsection 163(2) of the
Act are vacated.
[36]
The appeals are allowed
and the assessments are referred back to the Minister of National Revenue for
reconsideration and reassessment as follows:
-
add to the joint net
worth $5,000 as current assets under [translation]
"money in possession—safety deposit box" for the 2007 taxation year;
-
reduce to nil the
current joint assets under [translation]
"money in possession—safety deposit box" for the 2008 taxation year;
-
subtract from the joint
net worth $2,427.72, $749.26, and $4,000.00 as personal expenditures
for the 2007 taxation year;
-
subtract from the joint
net worth $1,061.45 as transportation expenditures for the 2008 taxation year;
-
subtract from the joint
net worth $2,441.00 and $12,576.77 as personal expenditures for the
2008 taxation year;
-
vacate the penalties
imposed by the Minister under subsection 163(2) of the Act.
[37]
Without costs.
These ameneded reasons for judgment are
issued in replacement of the reasons for judgment dated August 8, 2013.
Signed at Ottawa,
Canada, this 8th day of November 2013.
"Johanne D’Auray"
Translation
certified true
on this 18th day
of November 2013.
Elizabeth Tan,
translator
Appendix
Taxpayer/Registrant HAJRUDIN
HEDZIC/FIKRETA HEDZIC
Auditor Erik
Garneau Prepared
Audit period 01-01-07 Oct.
8, 2010
to
12-31-09
Balance
sheet – assets
|
|
Dec. 31, 2006
|
Dec. 31, 2007
|
Dec. 31, 2008
|
F/T
|
|
ASSET
|
|
|
|
|
|
Business
asset
|
|
|
|
|
|
Current asset
|
|
|
|
|
|
Money in
possession
|
300.00
|
300.00
|
300.00
|
#810-5
|
|
Bank account
|
5,914.51
|
5,397.22
|
6,020.28
|
#9500, #9501,
#9502, #9503
|
|
Cashflow
|
(643.81)
|
(0.15)
|
(0.30)
|
#9500, #9502
and #9502
|
|
Inventory
|
2,500.00
|
2,500.00
|
2,500.00
|
#742
|
|
|
|
|
|
|
|
Non-current
asset
|
|
|
|
|
|
|
|
|
|
|
|
UCC per Appendix
1a – CCA
|
26,822.40
|
41,832.89
|
28,867.96
|
from app. 1a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
business assets
|
34,893.10
|
41,832.89
|
37,687.94
|
|
|
|
|
|
|
|
|
Personal
asset
|
|
|
|
|
|
Current asset
|
|
|
|
|
|
Money in
possession—safety deposit box
|
5,000.00
|
5,000.00
|
5,000.00
|
#810-10
|
|
Bank
account—Desjardins Mr. Hedzic
|
286.49
|
1,008.28
|
2,893.41
|
#1001-1,
#1001-3, #1002-5, #1003-4
|
|
Bank
account—Desjardins Mrs. Hedzic
|
9.77
|
26.29
|
5,627.34
|
#1051-1,
#10552-1, #1053-3
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
2009 Pontiac G5
|
|
|
|
#706-2,
#704-4
|
|
2002 Pontiac
Sunfire
|
|
|
|
#200, #704-4
|
|
Home furnishings
(CIBC Visa – Ameublements Tanguay)
|
|
|
|
#3201-41
|
|
Home furnishings
(Sears)
|
|
|
1,312.84
|
#3100-3
|
|
Home furnishings
(AccordD Visa -Leon's Furniture)
|
|
|
3,049.46
|
#3000-13
|
|
Home furnishings
(AccordD Visa – Ameublements Tanguay)
|
|
|
|
#3001-25
|
|
Home furnishings
(RBC Visa – Ameublements Tanguay)
|
|
|
1,340.00
|
#3502-15
|
|
Home furnishings
(RBC Visa – Leon's Furniture)
|
|
|
413.86
|
#3501-22
|
|
Home furnishings
(RBC Visa – Ameublements Tanguay)
|
|
|
|
#3502-21
|
|
Home furnishings
(Canadian Tire M/C – Ameublement Tanguay)
|
|
|
1,360.05
|
#3051-19
|
|
Personal
residence
|
|
|
210,000.00
|
#3900-2
|
|
Land in Bosnia
($50,000 / 5)
|
10,000.00
|
10,000.00
|
10,000.00
|
#810-12
|
|
|
|
|
|
|
|
Total personal
assets
|
15,296.26
|
16,034.57
|
240,996.96
|
|
|
TOTAL ASSETS
|
50,189.36
|
57,867.46
|
278,684.90
|
at app B
|
APPENDIX
II
Taxpayer/Registrant HAJRUDIN
HEDZIC/FIKRETA HEDZIC
Auditor Erik
Garneau Prepared
Audit period 01-01-07 Oct.
8, 2010
to
12-31-09
Balance
sheet – liabilities
|
|
Dec. 31, 2006
|
Dec. 31, 2007
|
Dec. 31, 2008
|
F/T
|
|
Liability
|
|
|
|
|
|
Business
liability
|
|
|
|
|
|
Current liability
|
|
|
|
|
|
|
|
|
|
|
|
Sales tax to
pay
|
5,270.70
|
8,793.92
|
5,900.97
|
#95500,
#9501, #9502, #9503
|
|
|
|
|
|
|
|
Non-current
liability
|
|
|
|
|
|
Owing on
equipment
|
|
4,602.40
|
|
#9501
|
|
|
|
|
|
|
|
Total
business liability
|
5,270.70
|
13,396.32
|
5,900.97
|
|
|
|
|
|
|
|
|
Personal
liabilities
|
|
|
|
|
|
Non-current
liability
|
|
|
|
|
|
Line of credit
|
|
|
|
|
|
Visa Desjardins
credit cards Mr. Hedzic
|
546.64
|
|
1,749.46
|
#3000-6,
#3000-11, #3001-3, #3001-26
|
|
Canadian Tire
card Ms. Hedzic
|
4,754.06
|
3,557.71
|
367.24
|
#3051-3,
#3051-15 #3051-26, #3051-37
|
|
Canadian Tire
card Mr. Hedzic
|
3,808.17
|
2,060.19
|
(2.27)
|
#3050-3,
#3050-15 #3050-27, #3050-36
|
|
Sears card Ms.
Hedzic
|
|
|
790.70
|
#3100-21
|
|
TD Canada Trust
Visa credit card Mr. Hedzic
|
5,466.32
|
5.77
|
(2.87)
|
#3150-4,
#3150-16 #3150-28, #3150-40
|
|
CIBC Visa card
Mr. Hedzic
|
6,740.30
|
(8.72)
|
9.70
|
#3200-4,
#3200-28 #3200-54, #3200-81
|
|
CIBC Visa card
Mr. Hedzic, 2nd account
|
4,968.84
|
|
(4.00)
|
#3201-1,
#3201-6 #3201-30, #3201-54
|
|
BMO MC card Mr.
Hedzic
|
2,843.54
|
45.43
|
|
#3250-10,
#3250-12 #3250-14, #3250-26
|
|
HBC card Mr.
Hedzic
|
421.76
|
|
|
#3300-26, #3300-22
|
|
MBNA credit card
Mr. Hedzic
|
|
|
|
#3350-1,
#3350-8
|
|
MBNA credit card
Mr. Hedzic, 2nd account
|
|
|
5,782.88
|
#3350-1,
#3350-12, #3350-25
|
|
#MBNA credit
card Mr. Hedzic, 3rd account
|
7,874.96
|
|
|
#3350-4,
#3501-16
|
|
RBC Visa credit
card Mr. Hedzic
|
|
|
(3.45)
|
#3501-4,
#3501-16
|
|
RBC Visa credit
card Ms. Hedzic
|
(2.34)
|
|
848.03
|
#3502-4,
#3502-9 #3502-16, #3502-24
|
|
CitiBank credit
card Mr. Hedzic
|
2,025.14
|
|
|
#3551-2,
#3551-13 #3551-25, #3551-37
|
|
CitiBank credit
card Ms. Hedzic
|
383.34
|
|
|
#3552-2,
#35552-13 #3552-25, #3552-37
|
|
Non-current
liabilities
|
|
|
|
|
|
Mortgage:
personal residence
|
|
|
193,747.37
|
#3900-1
|
|
BMO loan –
Pontiac G5
|
|
|
|
#706-2 and
#3699
|
|
|
|
|
|
|
|
Total
personal liabilities
|
39,830.73
|
5,660.38
|
203,282.79
|
|
|
TOTAL
LIABILITIES
|
45,101.43
|
19,065.70
|
209,183.76
|
to report
below
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Caluculation
of net worth
|
|
|
|
|
|
TOTAL ASSETS
|
50,189.36
|
57,867.46
|
278,684.90
|
from app. 1
|
|
Minus
|
|
|
|
|
|
TOTAL
LIABILITIES
|
45,101.43
|
19,056.70
|
209,183.76
|
from above
|
|
Net worth
|
5,087.93
|
38,810.76
|
69,501.14
|
|
|
|
|
|
|
|
|
Net worth,
prior year
|
|
5,807.93
|
38,810.76
|
|
|
Increase
(decrease) of net worth
|
|
33,722.83
|
30,690.38
|
at app. III
|
APPENDIX
III
Taxpayer/Registrant HAJRUDIN
HEDZIC/FIKRETA HEDZIC
Auditor Erik
Garneau Prepared
Audit period 01-01-07 Oct.
8, 2010
to
12-31-09
Calculation of gap between total income net worth
(for tax purposes)
|
|
Dec. 31, 2007
|
Dec. 31, 2008
|
F/T
|
|
Increase (decrease) in net
worth (according to Appendix II)
|
33,722.83
|
30,690.38
|
from App 2
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Additions
|
|
|
|
|
Personal expenditures
(according to Appendix IV)
|
35,014.68
|
48,576.27
|
from App 4
|
|
Source deductions –
taxpayer/registrant
|
|
|
|
|
Source deductions – spouse
|
|
|
|
|
QC tax payment –
taxpayer/registrant
|
|
2,974.75
|
#702-2
|
|
QC tax payment – spouse
|
381.91
|
3,048.35
|
#702-3
|
|
CAN tax payment –
taxpayer/registrant
|
926.58
|
|
#135-1.1
|
|
CAN tax payment – spouse
|
985.53
|
|
#135-4
|
|
Amount of gross-up for
dividends
|
|
|
|
|
Value of cashed-in RRSP
from contributions
|
|
|
|
|
Non-deductible loss on sale
of personal-use property
|
|
|
|
|
Non-deductable portion of
capital loss
|
|
|
|
|
Non-deductable portion of
expenses for food, etc. under 67.1
|
|
|
|
|
Income per civil year –
taxpayer/registrant
|
|
|
|
|
Income per civil year –
spouse
|
|
|
|
|
Reserve prior year re: end
of year change
|
|
|
|
|
Additional ITC allowed by
the auditor
|
|
|
from App. 7
|
|
Other
|
|
|
|
|
Total additions
|
37,308.70
|
54,599.37
|
|
|
|
|
|
|
|
Deductions
|
|
|
|
|
Non-taxable gains on sale
of personal assets
|
|
|
|
|
Additional GST/HST payable
according to reasonableness test
|
|
|
from App. 7
|
|
Additional GST/HST payable
according to ITC adjustments
|
|
|
from App. 7
|
|
QC tax rebate – taxpayer/registrant
|
324.74
|
|
#702-2
|
|
Tax rebate – spouse
|
|
|
|
|
GST credit
|
469.00
|
350.90
|
#135-2
|
|
QST credit
|
338.00
|
183.32
|
#702-2
|
|
Non-taxable insurance
product
|
|
5,020.60
|
#5500
|
|
Family gift
|
|
|
|
|
Inheritance
|
|
|
|
|
Lottery winnings
|
|
|
|
|
Non-taxable earnings on
sale of personal-use property
|
|
|
|
|
Non-taxable portion of
capital gains
|
|
|
|
|
Reserve re: end of year
change
|
|
|
|
|
Income according to fiscal
year – taxpayer/registrant
|
|
|
|
|
Income according to fiscal
year – spouse
|
|
|
|
|
Other
|
|
|
|
|
Total deductions
|
1,131.74
|
5,554.82
|
|
|
|
|
|
|
|
Net adjustments
|
35,176.96
|
49,044.55
|
|
|
|
|
|
|
|
Total income according
to adjusted net worth
|
69.899.79
|
79.,734.93
|
|
|
|
|
|
|
|
Less: total reported
income (line 150)
|
|
|
|
|
Taxpayer/registrant
|
19,160.00
|
14,216.00
|
|
|
Spouse
|
19,160.00
|
14,216.00
|
|
|
Other
|
|
|
|
|
Gap in total income
according to net worth
|
31,579.79
|
51,302.93
|
|
|
|
|
|
|
APPENDIX
IV
Taxpayer/Registrant HAJRUDIN
HEDZIC/FIKRETA HEDZIC
Auditor Erik
Garneau Prepared
Audit period 01-01-07 Oct.
8, 2010
to
12-31-09
Summary
of personal expenditures
|
|
Dec.
31, 2007
|
Dec.
31, 2008
|
F/T
|
|
(1) Food
|
8,000.00
|
8,000.00
|
from pers. exp.
|
|
(2) Lodging
|
3,788.16
|
14,720.02
|
from pers. exp.
|
|
(3) Lodging expenses
|
1,287.03
|
2,007.04
|
from pers. exp.
|
|
(4) Clothing
|
2,054.88
|
2,102.72
|
from pers. exp.
|
|
(5) Transportation
|
3,671.39
|
3,974.08
|
from pers. exp.
|
|
(6) Health care
|
1,043.55
|
1,053.88
|
from pers. exp.
|
|
(7) Personal care
|
421.00
|
430.80
|
from pers. exp.
|
|
(8) Entertainment
|
-
|
-
|
from pers. exp.
|
|
(9) Newspapers, magazines and books
|
344.57
|
352.59
|
from pers. exp.
|
|
(10) Education
|
-
|
-
|
from pers. exp.
|
|
(11) Tabacco and alcohol
|
-
|
-
|
from pers. exp.
|
|
(12) Life insurance
|
451.07
|
932.40
|
from pers. exp.
|
|
(13) Gifts and contributions
|
1,284.30
|
1,314.20
|
from pers. exp.
|
|
(14) Varia
|
4,353.66
|
403.59
|
from pers. exp.
|
|
(15) Other
|
8,315.07
|
13,284.96
|
from pers. exp.
|
|
|
|
|
|
|
|
35,014.68
|
48,576.27
|
from App III
|
Statement of personal expenditures
Year: 2007 Taxpayer/registrant:
HAJRUDIN HEDZIC/FIKRETA HEDZIC
Client profile according to Stats Can:
Two-person household - 2 members >= 20 yrs and up
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