Citation: 2011 TCC 573
Date: 20111223
Docket: 2011-3047(IT)APP
BETWEEN:
REAL MICHAUD,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Woods J.
[1]
Real Michaud brings an application
to extend time to serve a notice of objection under the Income Tax Act with
respect to an assessment for the 2008 taxation year.
[2]
The Crown objects to the extension
on grounds that the provisions of subsection 166.2(5) of the Act have
not been satisfied. The main provisions, s. 166.2(5) and s. 165(1), are
reproduced below.
When application to
be granted
166.2(5) No application shall be granted
under this section unless
(a) the
application was made under subsection 166.1(1) within one year after the
expiration of the time otherwise limited by this Act for serving a notice of
objection or making a request, as the case may be; and
(b) the
taxpayer demonstrates that
(i) within the time otherwise
limited by this Act for serving such a notice or making such a request, as the
case may be, the taxpayer
(A) was unable to act or to
instruct another to act in the taxpayer’s name, or
(B) had a bona fide intention to object to the assessment
or make the request,
(ii) given the reasons set out in
the application and the circumstances of the case, it would be just and
equitable to grant the application, and
(iii) the application was made
under subsection 166.1(1) as soon as circumstances permitted.
Objections to
assessment
165. (1) A taxpayer who objects to
an assessment under this Part may serve on the Minister a notice of objection,
in writing, setting out the reasons for the objection and all relevant facts,
(a) where the assessment is
in respect of the taxpayer for a taxation year and the taxpayer is an
individual (other than a trust) or a testamentary trust, on or before the later
of
(i) the day that is one year after
the taxpayer’s filing-due date for the year, and
(ii) the day that is 90 days after
the day of sending of the notice of assessment; and
(b) in any other case, on or
before the day that is 90 days after the day of sending of the notice of assessment.
Factual Background
[3]
The Minister of National Revenue last
reassessed Mr. Michaud’s 2008 taxation year by notice dated November 23,
2009.
[4]
On or about March 28, 2011, Mr.
Michaud requested an adjustment to the 2008 income tax return with respect to
medical travel expenses.
[5]
By letter dated April 15, 2011,
the Minister informed Mr. Michaud that the request was denied on the basis that
the expenses did not qualify as “medical expenses.”
[6]
On July 14, 2011, Mr. Michaud
served a notice of objection to the above reassessment. The Minister denied the
objection on or about July 25, 2011.
[7]
Mr. Michaud filed this application
on October 13, 2011.
Analysis
[8]
In order for an extension of time
to be granted, the conditions set out in s. 166.2(5) of the Act must
be satisfied.
[9]
One of those requirements is that
the taxpayer have applied to the Minister for an extension of time within one
year after the expiration of the time for objecting: paragraph 166.2(5)(a).
[10]
Counsel for the Crown submits that
this condition has not been satisfied because Mr. Michaud needed to apply to
the Minister for an extension of time no later than June 15, 2011. Even if the
notice of objection served on July 14, 2011 is considered to be an application
for an extension of time, it is submitted, the application was sent one month
late.
[11]
The June 15, 2011 deadline was
determined by the Minister pursuant to s. 165(1) as being one year
following the later of: (1) one year after the filing due date for the tax
return (June 15, 2010), and (2) 90 days after the notice of assessment was sent
(February 21, 2010).
[12]
Several of the arguments that were
made on behalf of Mr. Michaud are based on considerations of fairness. It is
submitted that the Canada Revenue Agency (the “CRA”) invited Mr. Michaud to make
a request for an adjustment to the income tax return and did not inform him
that it was necessary to file a notice of objection. It is also submitted there
were mitigating factors for failing to meet the deadline. It is further
submitted that the appeal clearly has merit because a similar claim for Mr.
Michaud’s spouse was allowed by the CRA.
[13]
Unfortunately, the deadline for
making this application cannot be ignored on grounds of fairness, even if the
fault lies with the CRA: Carlson v. The Queen, 2002 DTC 6893 (FCA), para
13 and Moulton v The Queen, [2002] 2 CTC 2395. As stated by Bowman C.J.
in Moulton, it may be shocking for taxpayers to learn that they cannot
rely on advice provided by the CRA.
[14]
The agent for Mr. Michaud
submitted that the condition in s. 166.2(5)(b)(ii) is satisfied because
it is just and equitable that the application be granted. The problem with this
submission is that this is an additional requirement, not an alternate
requirement. All of the conditions in s. 166.2(5) must be satisfied.
[15]
The agent for Mr. Michaud also
referred to the Bill of Rights to the effect that taxpayers should only have to
bear the proper amount of tax. This argument, if accepted, would erase the deadlines
for objections and appeals that Parliament has prescribed. This cannot be the
intent of the Bill of Rights.
[16]
The agent for Mr. Michaud also
submits that the Act permits taxpayers to object to determinations in
addition to assessments. It is suggested that the Minister made such a
determination when the CRA rejected Mr. Michaud’s request to make an adjustment
for medical expenses. It is suggested that an objection may be served with
respect to this determination which was made on April 15, 2011.
[17]
I disagree with this submission.
The Act does contemplate that appeals may be taken from determinations,
but only with respect to certain matters, such as GAAR determinations, loss
determinations and determinations of child tax benefits. I was not referred to
any provision that would allow for an objection or appeal of a determination to
deny a claim for medical expenses.
[18]
Finally, the agent for Mr. Michaud
suggests that she may have sent a letter to the CRA on or about May 22, 2010
with the necessary information to support the expense claimed. Even if such a
letter could be construed as an application to extend time to file a notice of
objection, there was insufficient evidence to establish that a letter was
actually sent.
[19]
For all these reasons, I would
conclude that Mr. Michaud did not make an application to extend time within the
required deadline. The application will be dismissed.
Signed at Toronto, Ontario this 23rd day of December 2011.
“J. Woods”
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