Docket: 2012-266(IT)I
BETWEEN:
SUZANNE ASHTON
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal
heard on October 3, 2012, at Vancouver, British Columbia
Before: The Honourable
Justice Patrick Boyle
Appearances:
|
For the Appellant:
|
The
Appellant herself
|
|
Counsel for the Respondent:
|
Amandeep K. Sandhu
|
____________________________________________________________________
JUDGMENT
The appeal from the assessments made under
the Income Tax Act for the Appellant’s 2007 and 2008 taxation years is
dismissed, without costs, in accordance with the attached Reasons for Judgment.
Signed at Vancouver, British Columbia this 10th
day of October 2012.
"Patrick Boyle"
Citation: 2012 TCC 353
Date: 20121010
Docket: 2012-266(IT)I
BETWEEN:
SUZANNE ASHTON
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Boyle J.
[1]
The question to be
decided in this informal appeal is whether Ms. Ashton received excess refunds
for 2007 and 2008 based upon falsified T4 slips. It is Ms. Ashton’s position
that the e-filed returns were not filed by her and the amounts in question were
not refunded to her. She maintains that a third party must have been
responsible for the returns and received the refunds.
[2]
Prior to this hearing
the Crown brought a preliminary motion to quash the appeal on the basis that
the reassessments of Ms. Ashton by Canada Revenue Agency (“CRA”) after it
determined the T4s were falsified were nil assessments. That motion was decided
earlier by a fellow judge who dismissed it on the basis that Ms. Ashton was
appealing from assessments under section 160.1 of the Income Tax Act
(the “Act”) for excess amounts refunded to her. I have proceeded on that
basis as that judge’s decision was not appealed by the Crown.
[3]
At the hearing of the
appeal, the Crown argued that this Court lacked jurisdiction over collection
matters. Notwithstanding that section 160.1 of the Act appears to
clearly give this Court jurisdiction with respect to excess amounts refunded to
a taxpayer, the Crown’s position is that this Court only has jurisdiction if
the amount of the excess refund itself is disputed, not whether it was, in
fact, refunded to the taxpayer. The Crown maintains that the Federal Court has
jurisdiction to decide whether the taxpayer received the refund as that is a
collection matter. Given my factual finding below, my decision that this Court
does have jurisdiction to determine whether, in the words of section 160.1 “an
amount has been refunded to a taxpayer in excess” is largely moot. That wording
in section 160.1, and the express conferral of appeal jurisdiction on this
Court in subsection 160.1(3), indicates Parliament intended this Court to have
jurisdiction to decide if excess amounts were refunded to
a taxpayer.
[4]
In 2008, Money Mart
e-filed a 2007 tax return in Ms. Ashton’s name and discounted the refund in
cash. While Ms. Ashton had been a Money Mart customer for ten years, documented
in considerable detail in Money Mart’s electronic customer profile, she had
never previously had them prepare her tax return. Money Mart was given a T4
that was handwritten and with the taxpayer’s name misspelled. In fact, on each
copy her name was misspelled differently and on each it was “corrected” by hand
but left two differently spelled names each of which remained incorrect and did
not accord with Money Mart’s client name on file nor with the name on the ID
they said they reviewed. Money Mart made no attempt to verify the T4 with the employer
before e-filing. For customer identification, Money Mart required a copy of a
driver’s licence and pulled up their digital photo on her customer profile, which
may have been ten years old at that time (and remains the only one in use).
[5]
In 2009, H&R Block
e-filed a tax return in Ms. Ashton’s name and discounted her refund by H&R
Block cheque. No evidence was tendered to support that Ms. Ashton cashed that
cheque or deposited it to her account other than a poor quality copy of the
back of the cheque approximately one and a half inches by three inches which
appeared to include a signature which resembled the taxpayer’s. It is clear
from the Money Mart records that this cheque was not cashed in Ms. Ashton’s
name at Money Mart, even though from the records she continued to be and
continues to be a regular Money Mart customer.
[6]
The T4 given to H&R
Block was from the same employer. The 2008 T4 was typed. The H&R Block
witness testified that H&R Block would always contact an employer in the
event of a handwritten T4 to confirm its validity. H&R Block’s policy in
2009 did not require photo ID. It required one piece of photo ID with a
signature or two pieces of non-photo ID with signatures. The ID policy was new
at that time and, as volunteered by the H&R Block witness, not well-complied
with in any event. It did not even require that any record be noted in the file
that ID was presented much less which ID was presented. H&R Block was
unable to tell from its files which of its employees was responsible for preparing
and filing the return, nor could it say that the “required” second level review
happened in this case as this was another policy that was not always complied
with.
[7]
This state of affairs
at tax discounters such as Money Mart and H&R Block, combined with the fact
that it is the CRA and the Canadian government and public, not the discounters,
who take much of the financial risk, is fraught with risk of false T4s and
identity theft. This was acknowledged by the CRA witness’s experience.
[8]
The taxpayer gave
evidence that she had had her purse stolen in Manitoba in 2002 and had lost her
wallet in early 2010. In each case she had thereafter been the subject of
identity theft and unauthorized financial transactions occurring in her name.
She put these forward as possible opportunities for identity theft in this
case. The taxpayer’s stolen purse in 2002 would not have given another person
her 2007 and 2008 addresses or phone number. When her wallet was lost in 2010,
that was after these two returns in question had been filed. If the returns
were e-filed by another person, they did not get her personal information or
her driver’s licence from her stolen purse or lost wallet.
[9]
I do not have to decide
whether, based upon the statutory requirement the CRA must determine that an
excess amount was refunded to a taxpayer, the Minister has the onus or burden
of proof that the refunds were, in fact, paid to Ms. Ashton. It seems
reasonable in the circumstances that it might. It is similarly not clear that
the Minister should have the benefit of the assumptions being prima facie
assumed correct since, in the case of identity theft, the information of who
pretended to be a taxpayer is not within her particular knowledge – CRA may
well be better situated to investigate. In any event, even if the taxpayer
bears the usual burden of proof in this case, once she has denied her
involvement, as a practical matter, the burden of persuasion shifts to the
Crown if her evidence that it was not her appears credible. It would be
difficult for a taxpayer in the situation to have much greater evidence to offer
if it was not her.
[10]
I would not be able in
this day and age to conclude that a refund was paid to a taxpayer simply
because someone presented themselves to a tax return preparer, was able to make
a signature that resembled hers, had a driver’s licence in her name, and knew
her address and phone number.
[11]
However, those factors,
combined with the following aspects of the evidence allow me to find that on a
balance of probabilities it was the taxpayer who went to Money Mart and H&R
Block with falsified T4s to have her returns prepared:
1.
The taxpayer’s address
changed from 2008 when the 2007 return was filed, to 2009 when the 2008 return
was filed. The person attending at Money Mart and H&R Block knew both of
her correct addresses.
2.
A GST rebate cheque in
the taxpayer’s name was cashed at Money Mart on the same day her 2007 return
file was opened. The same Money Mart employee attended to both transactions
that day. If the taxpayer cashed her GST cheque and an impostor presented the
2007 tax slip, it would be surprising that the Money Mart employee did not
identify the problem. If both were presented by the same person, and if that
was not the taxpayer, the impostor would have to be someone with ready access
to the taxpayer’s mail.
3.
The person who
presented the falsified 2008 T4 return to H&R Block also presented a
legitimate tax information slip issued to the taxpayer in respect of provincial
social assistance payments. The taxpayer acknowledges she received the social
assistance payments. It appears odd that an impostor would bring the legitimate
slip. It would also mean the impostor still had ready access to her mail a year
and a move later.
[12]
While the taxpayer’s
position that it was not her who authorized the filing of the returns is
possible and even plausible in the circumstances, based on the totality of the
evidence I am unable to conclude that it is the most likely version of the
events applying a balance of probability standards.
[13]
For
these reasons, the appeal is dismissed.
Signed at Vancouver, British Columbia this 10th day of October 2012.
"Patrick Boyle"
CITATION: 2012 TCC 353
COURT FILE NO.: 2012-266(IT)I
STYLE OF CAUSE: SUZANNE ASHTON AND HER MAJESTY THE QUEEN
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: October 3, 2012
REASONS FOR JUDGMENT BY: The
Honourable Justice Patrick Boyle
DATE OF JUDGMENT: October 10, 2012
APPEARANCES:
|
For the
Appellant:
|
The Appellant herself
|
|
Counsel for the
Respondent:
|
Amandeep K. Sandhu
|
COUNSEL OF RECORD:
For the Appellant:
Name: N/A
Firm:
For the
Respondent: Myles J. Kirvan
Deputy
Attorney General of Canada
Ottawa,
Canada
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