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Docket: 2006-2524(IT)I
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BETWEEN:
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MARCEL G. RIOUX,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
[OFFICIAL
ENGLISH TRANSLATION]
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____________________________________________________________________
Appeals heard on February 1, 2007, at Montréal, Quebec
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Before: The
Honourable Justice Réal Favreau
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Appearances:
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Counsel for the
Appellant:
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Daniel Toupin
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Counsel for the
Respondent:
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Mounes Ayadi
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____________________________________________________________________
JUDGMENT
The appeals from the assessments made under the Income Tax Act for
the 2001 and 2002 taxation years are dismissed, in accordance with the attached
Reasons for Judgment.
Signed at Montréal, Quebec, this 16th day of February 2007.
Favreau
J.
Translation certified true
on this 10th day of August 2007.
Brian McCordick, Translator
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Citation: 2007TCC82
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Date: 20070216
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Docket: 2006-2524(IT)I
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BETWEEN:
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MARCEL G. RIOUX,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
[OFFICIAL
ENGLISH TRANSLATION]
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REASONS FOR JUDGMENT
Favreau J.
[1] These appeals were heard under the informal
procedure. The Appellant is contesting assessments for the 2001 and 2002 taxation
years, by which the Minister of National Revenue
("the Minister") disallowed his deduction of employment‑related
expenses.
[2] The issue for determination is whether the
Minister properly disallowed the $7,988 claimed as employment expenses for the
2001 taxation year and the $5,592 claimed as employment expenses for the 2002
taxation year.
[3] The expenses disallowed for the 2001 taxation
year fall under the following categories:
(a) $5,496.17 for personal supplies such as a refrigerator, sofa,
groceries, pharmaceuticals and newspaper subscriptions;
(b) $433.83 worth of telecommunications
expenses for telephone lines at the taxpayer's residence; and
(c) $2,058.52 for clothing.
[4] The expenses disallowed for the 2002 taxation
year fall under the following categories:
(a) $1,962.11 for personal supplies such as a refrigerator, sofa, groceries,
pharmaceuticals and newspaper subscriptions;
(b) $450.94 worth of telecommunications expenses for telephone lines
at the taxpayer's residence;
(c) $2,048.24 for clothing; and
(d) $1,130.12 for home office expenses.
[5] The Appellant is a full-service investment
advisor registered with the Autorité des marchés financiers and the Investment
Dealers Association of Canada, and, during the 2001 and 2002 taxation years, he
carried on business from his home and from a 558‑square‑foot office
located at 365 Laurier Boulevard in Beloeil.
[6] On July 1, 1999, the date on which Whalen, Béliveau & Associés Inc.
sold the assets of its brokerage business to Canaccord Capital Corporation ("Canaccord"),
the Appellant authorized the transfer of his clients' accounts to Canaccord in
order to continue to do business with a securities broker. During the 2001 and
2002 taxation years, the Appellant was still doing business with Canaccord.
[7] The Appellant's remuneration consists of
commissions that Canaccord paid and that Canaccord considered employment
income. Hence, Canaccord issued a T4 slip to the Appellant for each of the
years in issue.
[8] The Appellant filed his income tax return for
each of the years in issue, treating his commissions as employment income and
claiming employment-related expenses using Form T2200.
[9] In his Notice of Appeal, the Appellant alleges
that he is self-employed, not an employee, and that since he is self-employed,
he is entitled, under sections 9 to 37 of the Income Tax Act
("the Act"), to deduct expenses incurred to earn his income as
an investment advisor. The question of the Appellant's legal status was not
raised in the notices of objection submitted to the Minister.
[10] At the hearing, counsel for the Appellant
submitted numerous facts and documents tending to establish the Appellant's
status as a self-employed worker, but produced no agreement connecting the
Appellant with Canaccord. The Appellant produced an agreement with Whalen,
Béliveau & Associés Inc. dated December 7, 1994, and argued that
it was now binding on Canaccord, but no document issued by Canaccord was
produced in support of this assertion. According to the Appellant, Canaccord
refuses to recognize its commissioned salespersons as self-employed in order to
ensure that they pay their taxes.
[11] At the hearing, the Appellant did not attempt to
justify the disallowed expenses and did not produce any supporting documents to
claim additional expenses in the event that he was adjudged self-employed.
[12] In his oral submissions, counsel for the
Appellant asserted that a taxpayer is entitled to raise a new argument against
an unfounded assessment, and he sought to establish that the Appellant was
self-employed.
[13] Counsel for the Respondent submitted that the
Court cannot render a declaratory judgment concerning a taxpayer's legal
status, and alleged that there is no evidence to justify the deduction of the
disallowed or additional expenses.
[14] Without having the agreements
governing the Appellant's relationship with Canaccord, I have nothing before me
that would enable me to reverse Canaccord's decision to treat the Appellant as
an employee. Since there is no evidence justifying the deduction of the
disallowed expenses for the 2001 and 2002 taxation years, the Appellant's appeals
from the notices of reassessment dated May 26, 2006, in respect of
the 2001 and 2002 taxation years, are dismissed.
Signed at Montréal, Quebec, this 16th day of February 2007.
Favreau J.
Translation certified true
on this 10th day of August 2007.
Brian McCordick, Translator
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