Citation: 2008TCC94
Date: 20080225
Docket: 2006-2938(IT)I
BETWEEN:
CARL A. BEAVIES,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Webb J.
[1]
The Appellant's income tax
liability for the taxation years 1999, 2000, 2001 and 2002 has been assessed based
on a net worth analysis prepared by the Canada Revenue Agency. As well, gross
negligence penalties have been assessed in relation to the tax assessed for
1999 and 2000. The net worth analysis in this case is unusual, because, except
for a lump sum addition of $10,000 in 2000, it is based only on estimated
personal expenditures. There are no assets listed as assets of the Appellant at
the beginning of the period under review and there are no assets of the Appellant
(other than $10,000 in cash included as an asset at the end of 2000) that are
listed as his assets at the end of any of the years under appeal. The Appellant
disputes all of the amounts used in the net worth analysis and the assessment
of penalties.
[2]
Attached as Schedule “A” to the Reply,
is a list of the estimated personal expenditures of the Appellant for 1999,
2000, 2001 and 2002 by various categories. For most of the expenditures the
amount used is a Statistics Canada average amount for a single person. The
Canada Revenue Agency, in preparing this schedule of estimated personal
expenditures, did take into account certain personal circumstances of the Appellant.
For example, since there were no known recreational vehicles, no amount was
included for recreational vehicles and since the Appellant did not own any real
property, no amount was included for property taxes.
[3]
Copies of unsigned tax returns
of the Appellant were submitted as Exhibits. The return for 1999 was prepared
by A Plus Tax Services. Although the Appellant did not recall filing these
returns, I am satisfied, on a balance of probabilities, that these returns were
filed by the Appellant or on his direction. In 1999, the Appellant reported
income of $1 and in 2000 the Appellant did not report any income.
[4]
In November of 2001, the Appellant
was detained at the airport in Toronto, along with two other individuals. The Appellant, and
each of the other two individuals, had significant amounts of cash. At the
hearing, the Appellant indicated that he thought the amount was around $17,000.
The officer who detained the Appellant in Toronto testified during the hearing and she confirmed that
the amount of cash that was seized from the Appellant was $19,640.
[5]
At the hearing the Appellant
testified that all of the money that had been seized from him at the airport
had been given to him by Paul Yue, another individual in Halifax. The Appellant
stated that he and the other two individuals had each been given approximately the
same amount of money and were being sent to Toronto to purchase vehicles for Paul Yue. After the Appellant
was detained, the Appellant told the detaining officer that he had sold two
vehicles, one for $8,000 and the other for $2,000, and that the balance of the
money had been given to him by the Appellant’s uncle, Daryl Downey.
[6]
The detaining officer described
her conversation with Paul Yue. She indicated that an individual who identified
himself as Paul Yue contacted her with respect to the funds that had been
seized. He indicated to her that he ran a car dealership in Halifax, Nova
Scotia. Paul Yue told her that he gave approximately $38,000 to all three
individuals to purchase vehicles. He also told her that as part of his business
he would purchase vehicles at wholesale for $1,200 to $1,500 each, fix the
vehicles, and sell them for approximately $2,000 to make a profit. It does not
seem logical that an individual, who is in the business of buying vehicles for
$1,200 to $1,500 per vehicle, would give three individuals $38,000 (which would
be $12,667 each) to buy a vehicle in Toronto and then drive it back to Nova
Scotia so that the individual could fix it up and then sell it for $2,000. Paul
Yue did not testify at this hearing.
[7]
The cash that was seized at the
Toronto airport was also discussed by Langdon J. of the Ontario Court of
Justice in Her Majesty the Queen v. James West, Carl Beavies and Aldon
Johnson, [2004] O.J. No. 3243. The facts related to the seizure of the cash
are described in that case as follows:
2 On November 5, 2001 the three respondents arrived at Toronto-Pearson
International Airport from Halifax, Nova Scotia. As they disembarked from the
aircraft, a police drug dog, Bandit, in the custody of R.C.M.P. constable
Nixon, displayed an interest in Johnson. Johnson behaved very nervously. As
Constables Nixon and Kennedy discussed the situation, Johnson continued to
display an obvious interest.
3 The three respondents, each with a carry-on bag, walked
together and conversed as they proceeded to the baggage claim area. They were
followed by Nixon, Kennedy and Bandit and four other R.C.M.P. officers. Kennedy
noted that Johnson turned and gazed at him on 14 occasions during this journey
and that Beavies did so six times.
4 As they approached the exit gate, police detained the three
men. Their investigation revealed that Johnson was carrying $18,350.00, West,
$23,455.00 and Beavies, $19,640.00, all in cash, the vast majority of it in
$20.00 bills. The total amount of cash in possession of the three men was
$61,445.00. It is that cash that was the subject of the forfeiture hearing
before Spadafora J.P.
5 All three respondents provided explanations for their
possession of the money that were highly improbable, inconsistent and/or
conflicting. Subsequent investigation of collateral sources disclosed that the
explanations were almost certainly false.
6 Each respondent had a criminal record that included a
conviction for drug trafficking. Between the seizure of the cash and the
forfeiture hearing, all three respondents were arrested in the course of a
major drug investigation in Halifax. In that investigation, 513 grams of crack
cocaine was seized from Beavies' home, Johnson was alleged to have sold one
ounce of crack and West, four ounces.
7 Information obtained from C.C.R.A. by warrant disclosed that
from 1996 to 2002, West and Johnson had not declared income. In the same
period, Beavies had reported welfare income totaling $8,709.00 in 1996 and
1997, T-4 earnings of $3,650.00 in 1998 and nothing since. All three had
consistently received GST rebate cheques for the years in question.
8 The day following the seizure of the money, one Yue, an auto
broker from Halifax, called R.C.M.P. to report that he had sent the three men
to Toronto to buy vehicles for him for re-sale. He claimed that the cash in
their possession was his. None of the respondents ever proffered an explanation
for possession that was consistent with Yue's. Investigation of Mr. Yue's claim
proved that it, too, was false.
[8]
The decision of Langdon J. was
appealed to the Ontario Court of Appeal who described the facts as follows:
[4] The facts underlying this appeal are contained in the affidavit of
Constable Frank Mauti. While the admissibility of almost all of that affidavit
is contested, for the purposes of this appeal, the following suffices. On
November 5, 2001, West, Beavis, and Johnson arrived in Toronto's Lester B.
Pearson airport from Halifax each carrying one carry-on bag. As they walked
from the gate towards the baggage claim, they passed R.C.M.P. officers and a
police dog. Apparently, all three looked nervous. The dog sniffed Johnson's
pocket. Each of the Appellants was asked certain questions and gave certain
answers that led to the Appellants allegedly agreeing to have their carry-on
bags searched. No illegal substances were discovered. However, each had
approximately $20,000 in cash, mostly in twenty-dollar bills. They offered
explanations for having the money that the application appeal judge, Langdon
J., characterized as "highly improbable, inconsistent and/or conflicting"
(at para. 5). The officers did not accept the explanations and seized the
$61,445 in cash without a warrant.
[5] The income tax returns of the Appellants appeared to indicate that
they would have had no way of accumulating such sums.
[6] West, Beavies, and Johnson were never charged with an offence related
to the funds.
[7] On February 5, 2003, the Crown applied to the Ontario Court of
Justice for an order for forfeiture under s. 490(9) of the Criminal Code. The
Crown's position was that the Appellants were couriers bringing money obtained
through crime from Halifax to Toronto for laundering. The details of the
incident were contained in the affidavit of Const. Mauti, the proceeds of crime
investigator assigned to the file.
[9]
Because the Appellant had
indicated to the detaining officer that $10,000 of the funds that had been
seized belonged to the Appellant (from the sale of two vehicles), this amount
of $10,000 was included in the net worth analysis and treated as an asset of
the Appellant. It should be noted, however, that the theory of the Crown as
noted in the summary of the facts as set out in the decision of the Ontario
Court of Appeal referred to above was that the three individuals (of whom one
was the Appellant) were the couriers of the money to Toronto.
[10] Although the funds were seized in November 2001, the
$10,000 was added to the Appellant's 2000 income. The only explanation provided
for adding it to the Appellant's 2000 income was provided by the auditor for
the Canada Revenue Agency who stated that:
In 2000 the opening net worth was zero because that was the closing net
worth for 1999. However, in 2000 I assessed ten thousand dollars and that
relates to funds that were seized from Mr. Beavies when he was detained at the
Pearson Airport in Toronto in November of 2001.
I assessed it in 2000 because that was the only return that he had filed
at that time that would give rise to him acquiring an asset of cash. So I
included it there and then it would have been deducted off in 2001 when the
funds were seized. It would be considered a loss.
[11] In the tax return that was filed for 2000, the Appellant
did not report any income so it is not clear how “this return could give rise
to the Appellant acquiring cash”. As well, the Canada Revenue Agency assumed
that the Appellant had income in each of the four years under appeal and
assumed that the Appellant had income (before taking into account the seized
cash) of $18,125.52 for 2001 and $17,794.79 for 2000. Since the basis for the
net worth assessments was an estimate of the amounts spent by the Appellant on
various items, the assumption was that the Appellant spent all of the money
that he made. As a result, there does not appear to be any logical basis for
adding the amount seized in November of 2001 to the Appellant’s 2000 income.
Since the only reason that the $10,000 was added to the Appellant’s income for
2000 is that it was assumed to have been earned in 2000 without a logical basis
for this assumption, it should not have been added to his income for 2000.
Since adding the amount to the Appellant’s 2001 income (which would be the year
in which the cash was seized) would result in an increase in the assessment for
2001, I am unable to add this amount to his income for 2001.
[12] Justice Hamlyn in the case of Valdis,
[2001] 1 C.T.C. 2827, stated the following in paragraph 21:
21 In Millette c. R.,
Judge Lamarre Proulx reaffirmed that this Court cannot entertain an appeal that
contemplates increasing an Appellant's tax liability. She stated at paragraph
72:
It is accepted in the case law that this
Court cannot increase the amount of the Minister's assessment because that
would be tantamount to the Minister appealing the assessment, which he cannot
do. The Minister cannot appeal his own assessment: Harris v. M.N.R., 64 DTC
5332, at p. 5337; Shiewitz v. M.N.R., 79 DTC 340, at p. 342; and Abed v.
The Queen, 82 DTC 6099, at p. 6103. (emphasis added by Hamlyn J.)
[13] Since I am unable to add the $10,000 to the
Appellant’s income for 2001, there is no need to consider whether the Appellant
would have been entitled to a deduction in 2001 because this money was seized.
Bowman C.J., in Francis v. Her Majesty the Queen 2007 TCC 323, 2007
D.T.C. 903, made the following comments in relation to funds that were forfeited:
17 In this case the difficulty was
compounded by at least one red herring. There was the forfeiture of the funds
by court order in 2006. If the money did not belong to the appellant and did
not arise from any business activity (legal or illegal) carried on by him the
forfeiture really has nothing to do with the appellant and is irrelevant to
this case. If the $24,000 did arise from a business carried on by the
appellant, the forfeiture is equally irrelevant because it does not reduce the
appellant's income. In Neeb v. R. (1997), 97 D.T.C. 895 (T.C.C.), the
following was said:
29 Here we are dealing not with a penalty but with the forfeiture of a
portion of the appellant's inventory. There can be doubt that the cost of
inventory is an expense made or incurred to produce income and would normally
be deductible in computing income in the way in which the cost of inventory is
deductible, as a part of the cost of goods sold. As stated above, the loss of
goods in inventory would reduce the closing inventory and increase the cost of
goods sold. I am therefore faced squarely with the issue of public policy. The
question whether the forfeiture of drugs to the authorities is “an unavoidable
incident of carrying on the business” is susceptible of different answers in
the context of a case such as this one, depending on one's point of view.
Forfeiture is an unavoidable consequence of getting caught.
30 The question of avoidability is not germane here. Mr. Neeb did get
caught and his marihuana and hashish were seized. I can see no reason why the
Canadian public should be expected to subsidize a drug dealer's loss through
forfeiture of illegal drugs, by allowing him to write-off the cost of drugs so
forfeited, even if that cost had been established. If public policy has any
role in fiscal matters it must deny such a claim.
2. The seizure of cash. Apart from considerations of public policy there
is, however a further reason for denying the deduction. This is simply a
disposition of income, albeit involuntary, after it had been earned. The
principle is well settled: Mersey Docks and Harbour Board v. Lucas
(1883) 8 App. Cas. 891, followed in Fourth Conservancy Board v. IRC,
[1931] A.C. 540 and in Woodward's Pension Society v. Minister of National
Revenue, 59 D.T.C. 1253 at 1261, aff'd 62 DTC 1002 at 1004.
See also Svidal v. R. (1994), [1995] 1 C.T.C. 2692 (T.C.C.).
18 On reflection, I am inclined to question,
based on the Supreme Court of Canada decision in 65302 British Columbia Ltd.
v. R. (1999), 99 D.T.C. 5799 (Eng.) (S.C.C.), whether my reliance on public
policy considerations was as well founded as I evidently thought it was when I
wrote Neeb.
[14] Since the amount of $10,000 for the cash seized in Toronto is not
added to the Appellant’s income for 2000 or 2001, there is also no need to
consider whether this cash belonged to the Appellant.
[15] In addition to receiving notice of the large amount of
cash seized from the Appellant, the Canada Revenue Agency also noted the Appellant's
convictions for trafficking in cocaine. The Appellant has three convictions for
trafficking in cocaine. The dates for the offenses range from June 4, 2002 to
July 25, 2002. As a result of the Appellant's convictions, he was incarcerated
on September 6, 2002 and spent the balance of 2002 in prison. When the net
worth was originally completed, no reduction in the assumed expenditures was
made for the time while he was incarcerated. An adjustment was made for the
period of incarceration by the appeals officer.
[16] The Canada Revenue Agency also noted that the
business name “Carl Beavies Associates [sic] Jewellry Sales” was
registered with the Registry of Joint Stock Companies for Nova Scotia on
June 5, 2002. The person identified as the sole proprietor of this business was
Carl Beavies and the address was 2414 Creighton
Street in Halifax. This was the same
address that the Appellant gave to the detaining officer in Toronto as his
address and the same address listed by the Appellant in his 1999 and 2000 tax
returns. The Appellant denied that he had registered this business name. In any
event, the name was registered only a short time before the Appellant was
arrested for trafficking in cocaine and then incarcerated, so if the Appellant
had a jewellery business, it did not last long.
[17] After the Appellant was released from prison, the Appellant
found a job and is now working as a labourer for a construction company.
[18] The Appellant testified that throughout the years
under appeal, he did not have any money; he did not earn any income; and he did
not incur any expenditures. He indicated that he was living with Tami Reid in
1999 and after that with Michelle Jollimore. The Appellant indicated that when
he was living with Tami Reid that she looked after all the expenditures for the
household and she would give him cash and when he was living with Michelle
Jollimore she looked after all of the expenditures for the household and she
would give him cash. Michelle Jollimore also testified. Tami Reid did not
testify. In the Appellant’s 1999 and 2000 income tax returns, he indicated that
he was single. He did not indicate that he had a common law spouse. The
Appellant and Michelle Jollimore have a son who was born in December of 2002.
[19] Michelle Jollimore testified that during the time
that the Appellant was living with her, she paid the rent and the related
household expenditures. Michelle Jollimore testified that in 1999 when she was employed
at Maritime Life she made approximately $800 every two weeks, which would be
approximately $20,800 annually. In 2000, she started hairdressing and she
stated that she made about $2,000 a month, which would be approximately $24,000
per year.
[20] The auditor for the Canada Revenue Agency testified
that according to the records of the Canada Revenue Agency, Michelle Jollimore’s
reported income for these years was as follows:
1999 - $9,383
2000 - $11,517
2001 - $6,310
2002 - $16,232
[21] The amounts of income as reported do not correspond
to the amounts as stated by Michelle Jollimore, however it is not her income
that is the subject of this appeal. The relevance of her income is whether she
was making enough money to support both herself and the Appellant. The levels
of reported income for 2000 and 2001 suggest that the Appellant must have been
making at least some financial contribution as there were two of them living in
the household. The Appellant was living with Tami Reid in 1999 and not with
Michelle Jollimore. Therefore Michelle Jollimore’s income for 1999 is not
relevant. While Tami Reid’s income for 1999 while the Appellant was living with
her would be relevant, there was no evidence of Tami Reid’s income for 1999.
[22] When the Appellant was contacted by the auditor for
the Canada Revenue Agency about his income for these years, he chose to not
cooperate and hence left the Canada Revenue Agency with no alternative but to
assess the Appellant based on a net worth analysis. The Appellant provided
little or no input into the amounts used in the net worth analysis. As a result
the net worth analysis (and hence the resulting assessments) are based on
various assumptions made by the Minister with respect to the personal
expenditures incurred by the Appellant in 1999, 2000, 2001 and 2002.
[23] In Hickman Motors Ltd. v. Her Majesty the Queen,
[1997] S.C.J. No. 62, L’Heureux-Dubé J. of the Supreme Court of Canada
made the following comments in relation to an Appellant's onus of “demolishing”
the Minister’s assumptions:
92 It is trite law that in taxation the
standard of proof is the civil balance of probabilities: Dobieco Ltd. v.
Minister of National Revenue, [1966] S.C.R. 95 (S.C.C.), and that within
balance of probabilities, there can be varying degrees of proof required in
order to discharge the onus, depending on the subject matter: Continental
Insurance Co. v. Dalton Cartage Ltd., [1982] 1 S.C.R. 164 (S.C.C.); Pallan v.
Minister of National Revenue (1989), 90 D.T.C. 1102 (T.C.C.) at p. 1106. The
Minister, in making assessments, proceeds on assumptions (Bayridge Estates Ltd.
v. Minister of National Revenue (1959), 59 D.T.C. 1098 (Can. Ex. Ct.), at p.
1101) and the initial onus is on the taxpayer to “demolish” the Minister's
assumptions in the assessment (Johnston v. Minister of National Revenue, [1948]
S.C.R. 486 (S.C.C.); Kennedy v. Minister of National Revenue (1973), 73 D.T.C.
5359 (Fed. C.A.), at p. 5361). The initial burden is only to “demolish” the
exact assumptions made by the Minister but no more:First Fund Genesis Corp. v.
R. (1990), 90 D.T.C. 6337 (Fed. T.D.), at p. 6340.
93 This initial onus of “demolishing” the Minister's
exact assumptions is met where the Appellant makes out at least a prima facie
case: Kamin v. Minister of National Revenue (1992), 93 D.T.C. 62 (T.C.C.);
Goodwin v. Minister of National Revenue (1982), 82 D.T.C. 1679 (T.R.B.). In the
case at bar, the Appellant adduced evidence which met not only a prima facie
standard, but also, in my view, even a higher one. In my view, the Appellant
“demolished” the following assumptions as follows: (a) the assumption of “two
businesses”, by adducing clear evidence of only one business; (b) the
assumption of “no income”, by adducing clear evidence of income. The law is
settled that unchallenged and uncontradicted evidence “demolishes” the
Minister's assumptions: see for example MacIsaac v. Minister of National Revenue
(1974), 74 D.T.C. 6380 (Fed. C.A.), at p. 6381; Zink v. Minister of National
Revenue (1987), 87 D.T.C. 652 (T.C.C.). As stated above, all of the Appellant's
evidence in the case at bar remained unchallenged and uncontradicted.
Accordingly, in my view, the assumptions of “two businesses” and “no income”
have been “demolished” by the Appellant.
94 Where the Minister's assumptions have
been “demolished” by the Appellant, “the onus shifts to the Minister to rebut
the prima facie case” made out by the Appellant and to prove the assumptions:
Magilb Development Corp. v. Minister of National Revenue (1986), 87 D.T.C. 5012
(Fed. T.D.), at p. 5018. Hence, in the case at bar, the onus has shifted to the
Minister to prove its assumptions that there are “two businesses” and “no
income”.
95 Where the burden has shifted to the
Minister, and the Minister adduces no evidence whatsoever, the taxpayer is
entitled to succeed: see for example MacIsaac, supra, where the Federal Court
of Appeal set aside the judgment of the Trial Division, on the grounds that (at
pp. 6381-2) the “evidence was not challenged or contradicted and no objection
of any kind was taken thereto”. See also Waxstein v. Minister of National
Revenue (1980), 80 D.T.C. 1348 (T.R.B.); Roselawn Investments Ltd. v. Minister
of National Revenue (1980), 80 D.T.C. 1271 (T.R.B.). Refer also to Zink v.
Minister of National Revenue, supra, at p. 653, where, even if the evidence
contained “gaps in logic, chronology and substance”, the taxpayer's appeal was
allowed as the Minster failed to present any evidence as to the source of
income. I note that, in the case at bar, the evidence contains no such “gaps”.
Therefore, in the case at bar, since the Minister adduced no evidence
whatsoever, and no question of credibility was ever raised by anyone, the Appellant
is entitled to succeed.
96 In the present case, without any
evidence, both the Trial Division and the Court of Appeal purported to
transform the Minister's unsubstantiated and unproven assumptions into “factual
findings”, thus making errors of law on the onus of proof. My colleague
Iacobucci J. defers to these so-called “concurrent findings” of the courts
below, but, while I fully agree in general with the principle of deference, in
this case two wrongs cannot make a right. Even with “concurrent findings”,
unchallenged and uncontradicted evidence positively rebuts the Minister's
assumptions: MacIsaac, supra. As Rip T.C.J., stated in Gelber v. Minister of
National Revenue (1991), 91 D.T.C. 1030 (T.C.C.), at p. 1033, “[the Minister]
is not the arbiter of what is right or wrong in tax law”. As Brulé T.C.J.,
stated in Kamin, supra, at p. 64:
the Minister should be able to rebut such [prima facie] evidence and
bring forth some foundation for his assumptions.
…
The Minister does not have a carte blanche in terms of setting out any
assumption which suits his convenience. On being challenged by evidence in
chief he must be expected to present something more concrete than a simple
assumption. [Emphasis added by L’Heureux Dubé J. ]
[24] The net worth method of determining a taxpayer’s
income was described by Bowman J. (as he then was) in Bigayan v. Canada,
[2000] 1 C.T.C. 2229, 2000 D.T.C. 1619 as follows:
2 The net worth method, as observed in Ramey
v. R. (1993), 93 D.T.C. 791 (T.C.C.), is a last resort to be used when all else
fails. Frequently it is used when a taxpayer has failed to file income tax
returns or has kept no records. It is a blunt instrument, accurate within a
range of indeterminate magnitude. It is based on an assumption that if one
subtracts a taxpayer's net worth at the beginning of a year from that at the
end, adds the taxpayer's expenditures in the year, deletes non-taxable receipts
and accretions to value of existing assets, the net result, less any amount
declared by the taxpayer, must be attributable to unreported income earned in
the year, unless the taxpayer can demonstrate otherwise. It is at best an
unsatisfactory method, arbitrary and inaccurate but sometimes it is the only
means of approximating the income of a taxpayer.
3 The best method of challenging a net worth
assessment is to put forth evidence of what the taxpayer's income actually is.
A less satisfactory, but nonetheless acceptable method is described by Cameron
J. in Chernenkoff v. Minister of National Revenue (1949), 4 D.T.C. 680 (Can.
Ex. Ct.) at 683:
In the absence of records, the alternative course open to the Appellant
was to prove that even on a proper and complete “net worth” basis the
assessments were wrong.
4 This method of challenging a net worth
assessment is accepted, but even after the adjustments have been completed one
is left with the uneasy feeling that the truth has not been fully uncovered.
Tinkering with an inherently flawed and imperfect vehicle is not likely to
perfect it.
[25] Counsel for the Respondent stated that the net worth
assessment was completed as a result of the authority granted to the Minister
pursuant to subsection 152(7) of the Income Tax Act, which provides
that:
(7) The Minister is not bound by a return or information supplied by or
on behalf of a taxpayer and, in making an assessment, may, notwithstanding a
return or information so supplied or if no return has been filed, assess the
tax payable under this Part.
[26] In Hsu v. Her Majesty the Queen, 2001 FCA
240, the taxpayer was assessed pursuant to subsection 152(7) of the Income
Tax Act and the Federal Court of Appeal stated that:
15
Since the appellant
failed to adduce any evidence contradicting the Minister's assumptions, the Tax
Court judge found that he had been in receipt of undeclared income and upheld
the reassessments.
…
22 …Subsection 152(8) grants a presumption of validity to these
assessments and places the initial onus upon the taxpayer to disprove the state
of affairs assumed by the Minister (Dezura v. M.N.R. (1947), 3 D.T.C. 1101 at
1102 (Ex. Ct.)). Notwithstanding the fact that such an assessment is "arbitrary",
the Minister is obliged to disclose the precise basis upon which it has been
formulated (Johnston v. M.N.R. (1948), 3 D.T.C. 1182 at 1183 (S.C.C.)).
Otherwise, the taxpayer would be unable to discharge his or her initial onus of
demolishing the "exact assumptions made by the Minister but no more"
(Hickman Motors Ltd. v. The Queen (1997), 97 D.T.C. 5363 at 5376 (S.C.C.)).
…
33 …In Dezura, supra at 1103-1104, the President of the Exchequer
Court of Canada explained:
The object of an assessment is the ascertainment of the amount of the
taxpayer's taxable income and the fixation of his liability in accordance with
the provisions of the Act. If the taxpayer makes no return or gives incorrect
information either in his return or otherwise he can have no just cause for
complaint on the ground that the Minister has determined the amount of tax he
ought to pay provided he has a right of appeal therefrom and is given an
opportunity of showing that the amount determined by the Minister is incorrect
in fact. Nor need the taxpayer who has made a true return have any fear of the
Minister's power if he has a right of appeal. The interests of the revenue are
thus protected with the rights of the taxpayers being fully maintained.
Ordinarily, the taxpayer knows better than any one else the amount of his
taxable income and should be able to prove it to the satisfaction of the Court.
If he does so and it is less than the amount determined by the Minister, then
such amount must be reduced in accordance with the finding of the Court. If, on
the other hand, he fails to show that the amount determined by the Minister is
erroneous, he cannot justly complain if the amount stands. If his failure to
satisfy the Court is due to his own fault or neglect such as his failure to
keep proper account or records with which to support his own statements, he has
no one to blame but himself.
[27] I do not accept that the Appellant did not have any
income or any money in any of the years under appeal. There is a large amount
of unexplained cash seized at the Toronto airport and the convictions for trafficking in
cocaine indicate that he was selling drugs and therefore had a source of income.
As well the levels of income reported by Michelle Jollimore for 2000 and 2001
were less than $12,000 per year and suggest that since there were two of them
living in the one household, that the Appellant was making a financial
contribution. However ascertaining the exact amount of the Appellant's income
for each of these years is an impossible task. It is, however, the Appellant’s
tax liability under Part I (which is based on his income) that is to be
assessed. Since the Appellant has no record of his income, it is necessary to
try to determine, as accurately as possible in the circumstances, the estimate
of his income based on a net worth analysis that takes into account the
Appellant’s personal circumstances and life style.
[28] The Canada Revenue Agency, in preparing the net
worth assessment, acknowledged that not all amounts for which there are
Statistics Canada averages are applicable to the Appellant. It therefore seems
to me that an adjustment should be made for any of the items that are based on
Statistics Canada average amounts and for which the Appellant has made out at
least a prima facie case that such items do not apply to him as the amounts
used by the Respondent are based on assumptions using Statistics Canada
averages with respect to the amounts spent on various items by a single person.
[29] Several items that have been included in the net
worth assessment are not applicable to the Appellant. In particular, the
amounts used for rental charges for the years range from $4,800 - $5,100. This
is based only on an assumption of rents paid by a single person. Michelle
Jollimore testified that she was living in a co-op apartment with the Appellant.
The rent that she was paying was based on her income. Her rent was $196 a month,
which would only be $2,352 per year. She and the Appellant stated that she paid
the rent and not the Appellant. She and the Appellant also testified that she
paid for all of the expenditures related to the accommodations including the
rent, maintenance and repairs, insurance and water, fuel and electricity.
[30] Michelle Jollimore stated that the Appellant moved in
with her in February of 2000 and lived with her throughout the balance of the
years under appeal, until the Appellant was incarcerated in September of 2002.
Michelle Jollmore stated that her current address is 29 Taranki Drive,
Dartmouth, Nova Scotia. She was never asked to state her address in 2000,
2001 and 2002. Therefore there is no evidence of her address in those years.
The Appellant was not asked why he listed 2414 Creighton Street, Halifax, Nova
Scotia as his address in his 1999 and 2000 tax returns or why he gave this
address to the detaining officer in Toronto or whether this was the address of
the apartment that the Appellant and Michelle Jollimore shared in 2000, 2001
and 2002. As there is no evidence of Michelle Jollimore’s address in 2000, 2001
and 2002, there is no evidence that they were residing at separate addresses
during those years.
[31] In R. v. Beavies, [2004] N.S.J. No. 210,
Williams J. of the Nova Scotia Provincial Court dealt with an application by
Michelle Jollimore for a return of a vehicle after it had been seized pursuant
to a Consent Order issued by the Nova Scotia Provincial Court. Williams J.
stated that:
3
From her employment
as a hair stylist and with some assistance from relatives the applicant made
regular monthly instalment payments that commenced on October 28, 2001.
Although they were in a relationship since October 2000, she received no
assistance or contributions from Beavies toward the purchase or regular
payments for the vehicle. When she became pregnant, she took her maternity
leave in October 2002 and delivered her child in December 2002. While on
maternity leave her income consisted of employment insurance benefits, a child
allowance and baby-sitting services.
4 At the time that she was employed, Beavies,
who did not reside with her, would drive her to and from work in her
vehicle.
(emphasis
added)
[32] Neither the Appellant nor Michelle Jollimore were
asked any questions in relation to the testimony provided during this Nova Scotia Provincial Court case. Since Williams J. also noted that the Appellant
would drive Michelle Jollimore to and from work, the basis for the conclusion
that the Appellant was not residing with Michelle Jollimore is not clear as the
Appellant must have been at her place when she went to work and then returned
with her when she was finished. Without knowing the basis for this conclusion
and with no evidence of Michelle Jollimore’s address in 2000, 2001 and 2002, in
my opinion, this simple statement that the Appellant did not reside with
Michelle Jollimore, in the same sentence which also stated that he would drive
her to and from work, is not sufficient to impeach the credibility of Michelle
Jollimore and the Appellant on the issue of whether he was living with her and
she was paying the rent in 2000, 2001 and 2002.
[33] The Appellant and Michelle Jollimore both stated that
the Appellant was not living with Michelle Jollimore in 1999. The Appellant
stated that he was living with his former girlfriend, Tami Reid, in 1999. Tami
Reid did not testify during the hearing. In the Law of Evidence in Canada,
second edition, by Sopinka, Lederman and Bryant, it is stated at p. 297
that:
In civil cases, an unfavourable inference can be
drawn when, in the absence of an explanation, a party litigant does not
testify, or fails to provide affidavit evidence on an application, or fails to
call a witness who would have knowledge of the facts and would be assumed to be
willing to assist that party.
[34] The question in relation to Tami Reid is whether she
would be assumed to be willing to assist the Appellant as she is a former
girlfriend. In Antaya
v.Her Majesty the Queen, [2005]
T.C.J. No. 9 Sheridan J. made the
following comments on drawing an inference in a situation where an Appellant
failed to call a former spouse as a witness:
It would have assisted the Court to have
heard from Mr. Antaya's former spouse and counsel for the Respondent suggested
that a negative inference should be drawn from Mr. Antaya's failure to call
her. His answer was that relations between them had been strained and calling
her as a witness was not a realistic expectation. In my view, it was equally
open to the Respondent to call the former spouse, especially given its
resources, its duty to the proper administration of justice and the absence of
any of the personal relationship issues that may have hampered Mr. Antaya. I
accept Mr. Antaya's explanation as reasonable and draw no negative inference
from his not having called his former spouse to testify.
[35] I agree with the comments of Sheridan J. that the
Respondent could have called Tami Reid and therefore I do not draw any negative
inference from the Appellant not calling Tami Reid to testify. Since the
Appellant testified that his living arrangement was the same with Tami Reid as
it was with Michelle Jollimore, I find that any of the following adjustments to
be made to the net worth assessment for 2000, 2001 and 2002 should also be made
for 1999, unless otherwise noted.
[36] I accept the Appellant’s and Michelle Jollimore’s
testimony on the amounts related to the accommodation (rent, maintenance and
repairs, insurance, water, fuel and electricity) and therefore these items are
all to be deducted in determining the estimated personal expenditures of the Appellant.
[37] The Appellant and Michelle Jollimore also testified
that the Appellant did not have a telephone and did not contribute towards
cleaning supplies or paper, plastic and foil supplies. I accept their testimony
on this and therefore these items should be deleted.
[38] Even though there was no indication that the Appellant
owned an automobile, amounts were included for automotive fuel, maintenance and
repair - automobile, and insurance premiums – automobile. The issue of the
ownership of the automobile that was driven by the Appellant was the subject of
the decision of the Nova Scotia
Provincial Court referred to above. As
noted above, Williams J. dealt with an application by Michelle Jollimore for a
return of a vehicle after it had been seized pursuant to a Consent Order issued
by the Nova Scotia Provincial Court. Williams J. stated, as part of the conclusions
reached in that case, that:
17 In addition, I am satisfied and I conclude and find that
Beavies never had or continues to have any possessory title or interest in the
seized vehicle….
18 …In the result, I conclude, find and declare that she has 100
percent ownership interest and title in the black 1996 Chevrolet Multipurpose
vehicle, Model KTA, VIN # 1GNEK13R8TJ357884.
[39] The vehicle in question had been acquired by
Michelle Jollimore in October of 2001. The Appellant testified that he did not
own a car during the period of time under appeal. There was no evidence of any
vehicle in the Appellant’s name. The Nova
Scotia Provincial Court determined that
Michelle Jollimore owned the vehicle that was acquired in October of 2001 and
that was being driven by the Appellant. Prior to Michelle Jollimore acquiring
this vehicle she had her mother’s car. As a result the items that are related
to the maintenance and repair and automobile insurance premiums should be
deleted from the Appellant’s net worth assessment.
[40] The Appellant testified as follows in relation to
whether he drove the vehicles that were owned by Tami Reid and Michelle
Jollimore:
Q.
Did you drive someone else’s car?
A.
Well, they both have vehicles. Like -- not every -- it wasn’t an everyday
thing or nothing like that.
Q.
That you would drive their vehicles?
A.
Yeah, once in awhile.
Q.
And when you drove their vehicles, did you pay for gas?
A.
I never took it that far that we had to put gas in.
[41] Williams J. of the Nova Scotia Provincial Court in
the case referred to above, stated that:
3
From her employment
as a hair stylist and with some assistance from relatives the applicant made
regular monthly instalment payments that commenced on October 28, 2001.
Although they were in a relationship since October 2000, she received no
assistance or contributions from Beavies toward the purchase or regular
payments for the vehicle. When she became pregnant, she took her maternity
leave in October 2002 and delivered her child in December 2002. While on
maternity leave her income consisted of employment insurance benefits, a child
allowance and baby-sitting services.
4
At the time
that she was employed, Beavies, who did not reside with her, would
drive her to and from work in her vehicle. Further, depending on her schedule,
he, with her permission, would have the use of the vehicle. However,
unknown to the applicant, Beavies was the target of a police investigation and the
police would see him often and alone driving the vehicle.
…
10 …I find that
there is some affidavit evidence which disclosed that on several occasions
Beavies was seen alone in the vehicle and operating it. However, that
evidence is vague with respect to details of activities and, in particular,
activities concerning designated substance offences. Overall, on a close
scrutiny and assessment of this evidence I find it difficult to conclude that
Beavies did use this vehicle in connection with the commission of a designated
substance offence. The fact that the police saw him alone and often in
the vehicle, their observations do not, without more, confer legal
title of the vehicle to him.
(emphasis
added)
[42] Neither the Appellant nor Michelle Jollimore were
asked any questions in cross examination on their testimony that would have
been given in this Nova Scotia Provincial
Court case. As well the Appellant was
not questioned on what he meant when he stated that he would drive the vehicle
“once in a while”. The Appellant was asked, in cross examination, the following
questions in relation to driving Tami Reid’s vehicle:
Q.
When you were living with Tami, you said she worked at a clothing store?
A.
Yes.
Q.
And she’d take her car during the day to go to work?
A.
Yeah.
[43] Since Williams J. concluded that the Appellant was
seen alone and often in the vehicle and would drive Michelle Jollimore to and
from work (and therefore the Appellant would have the vehicle while Michelle
Jollimore was at work) and since there is no indication that this was different
when Michelle Jollimore had her mother’s car, I do not accept that the
Appellant did not pay for gas that was used in the vehicle in 2000, 2001 and
2002 and therefore no adjustment will be made for the amount related to
automotive fuel for 2000, 2001 and 2002. Since the only evidence for 1999 was
that Tami Reid would take her vehicle to her work (and therefore the Appellant
would not have the use of her vehicle while she was at work), the amount used
for automotive fuel for 1999 should be deleted.
[44] Since the Appellant did not have the use of Tami
Reid’s car in 1999 while she was at work, no adjustment will be made to the
amount identified as public transportation – local and commuter. Since the
Appellant did have the use of Michelle Jollimore’s vehicle in 2000, 2001 and
2002 while she was at work and since an amount will be included for gas
purchased in these years, the amounts for public transportation – local and
commuter will be deleted for 2000, 2001 and 2002.
[45] The amounts for eye care, and private and public health
insurance should be deleted as the Appellant testified that he did not pay for
any of these during the years under appeal and I accept his testimony in this
regard.
[46] With respect to dental care, the Appellant stated
that:
Q. And would you have visited the dentist often during those
four years?
A.
No, I don’t think so. No.
[47] Since the only evidence was that the Appellant would
not have visited the dentist often, this would mean that he did visit the
dentist during these years. No adjustment will be made to the amounts used for
dental care as the amounts ranged from $128.34 to $138.22 per year.
[48] The amounts for hair cutting, washing, and styling
should be deleted for 2000, 2001 and 2002 as Michelle Jollimore was a
hairstylist and therefore I accept his testimony that he did not pay for these
services in 2000, 2001 and 2002. However, the Appellant confirmed that Tami
Reid worked in a clothing store and therefore no adjustment should be made to
the amount for hair cutting, washing and styling for 1999.
[49] The amounts for sports and athletic equipment,
photographic goods and services and reading material should be deleted as the Appellant
testified that he did not purchase any of these and I accept his testimony in
this regard.
[50] The amounts for tobacco and smokers’ supplies, life
insurance premium, flowers, toys, etc., religious organizations and other
charitable organizations should be deleted as I accept the Appellant’s
testimony that he did not incur any of these amounts in any of these years.
[51] The Appellant testified that he did not have any
credit cards. The Respondent did not introduce any evidence in relation to the
amount identified as interest on personal loans – Scotiabank visa. As a result
this item should be deleted.
[52] I do not agree that any adjustments should be made
to any of the amounts stated for any of the other items. There is a large
amount of unexplained cash seized at the Toronto airport and the convictions for trafficking in
cocaine indicate that he was selling drugs and therefore had a source of income.
As well the levels of income reported by Michelle Jollimore for 2000 and 2001
were less than $12,000 per year and suggest that since there were two of them
living in the one household, that the Appellant was making a financial
contribution.
[53] The Appellant’s testimony in relation to the purchase
of groceries was as follows:
Q. Okay, Carl, let’s talk a
little bit about your living expenses for the years in question, ’99 to 2002.
With respect to food, did you purchase food from grocery stores often?
A. No.
Q. And that’s for all four
years?
A. Yes.
Q. Who would purchase groceries?
A. I never needed to go to the
grocery store. It was always Tami or Michelle, just ---
Q. Did you ever buy the food
yourself?
A. No.
[54] Michelle Jollimore’s testimony in relation to the
groceries was as follows:
Q. So while Mr. Beavis was living
with you, Michelle, did he purchase food from the grocery stores?
A. No.
Q. Who would purchase the
food?
A. I did.
[55] The Appellant may not have gone to the grocery store
himself to purchase groceries but this does not mean that he did not make a
financial contribution towards the purchase of groceries. Therefore no
adjustment should be made to the amount used for Food – groceries.
[56] The Appellant’s testimony in relation to eating at
restaurants was as follows:
Q. Would you eat at
restaurants often?
A. Not very often, no.
Q. When you say not very
often, what do you mean?
A. Well, maybe once a
month or something when ---
Q. And when you would eat
out at restaurants, who would pay for it?
A. Tami or Michelle.
[57] Michelle Jollimore’s testimony in relation to eating
at restaurants was as follows:
Q. Up until 2002 how often
would you and Carl eat at restaurants if at all?
A. Every once -- maybe once
every couple weeks, once a month.
Q. And who would pay for the
meals when you ate at the restaurants?
A. I did.
[58] I do not accept that for four years the Appellant
would eat at restaurants once every couple of weeks (which would be
approximately 94 times before he was incarcerated) or once a month (which would
be approximately 44 times before he was incarcerated) and never pay for a
single meal. Therefore no adjustment should be made to the amount used for Food
– restaurants.
[59] The net worth included items identified as traveler
accommodation and public transportation – inter city and airfare. While the
Appellant did testify that he did not use local public transit, the Appellant
did not introduce any evidence to challenge the amounts used for either one of
these items. Therefore no adjustment will be made for either one of these items.
[60] For the remaining items, I do not accept that the
Appellant for four years did not make any financial contribution towards
clothing, medical supplies, personal care supplies, toys, games, hobbies, home
entertainment, recreational services, alcoholic beverages, gifts and lottery
tickets. Therefore no adjustment will be made to the amounts used for any of
these items.
[61] As a result, the following adjustments are to be
made to the net worth analysis as prepared by the Canada Revenue Agency before
taking into account his period of incarceration that commenced on September 6,
2002:
|
Item:
|
1999
|
2000
|
2001
|
2002
|
|
Rent:
|
($4,800.00)
|
($4,800.00)
|
($4,800.00)
|
($5,100.00)
|
|
Maintenance
and repairs:
|
($226.43)
|
($232.57)
|
($238.52)
|
($243.84)
|
|
Insurance:
|
($145.04)
|
($148.98)
|
($152.78)
|
($156.19)
|
|
Water,
fuel, electricity:
|
($874.40)
|
($898.14)
|
($921.09)
|
($941.66)
|
|
Telephone:
|
($573.89)
|
($589.47)
|
($604.53)
|
($618.04)
|
|
Cleaning
supplies:
|
($130.43)
|
($133.97)
|
($137.39)
|
($140.46)
|
|
Paper,
plastic, foil supplies:
|
($50.00)
|
($50.00)
|
($50.00)
|
($50.00)
|
|
Automotive
fuel:
|
($534.24)
|
|
|
|
|
Maintenance
and repair – automobile:
|
($271.29)
|
($278.66)
|
($285.78)
|
($292.16)
|
|
Insurance
premiums – automobile:
|
($466.42)
|
($479.08)
|
($491.32)
|
($502.29)
|
|
Public
transportation – local and commuter:
|
|
($195.06)
|
($200.05)
|
($204.51)
|
|
Eye
care goods and services:
|
($77.21)
|
($79.31)
|
($81.34)
|
($83.15)
|
|
Private
and Public health insurance:
|
($141.91)
|
($145.76)
|
($149.48)
|
($152.82)
|
|
Hair
cutting, washing styling:
|
|
($205.78)
|
($211.04)
|
($215.75)
|
|
Sports
and athletic equipment:
|
($58.43)
|
($60.02)
|
($61.55)
|
($62.93)
|
|
Photographic
good and services:
|
($44.87)
|
($46.09)
|
($47.26)
|
($48.32)
|
|
Reading
material:
|
($196.17)
|
($201.49)
|
($206.64)
|
($211.26)
|
|
Tobacco
and smokers’ supplies:
|
($328.68)
|
($337.61)
|
($346.23)
|
($353.97)
|
|
Life
insurance premium:
|
($145.04)
|
($148.98)
|
($152.78)
|
($156.19)
|
|
Flowers,
toys, etc.
|
($350.59)
|
($360.11)
|
($369.31)
|
($377.56)
|
|
Religious
organizations:
|
($158.60)
|
($162.91)
|
($167.07)
|
($170.80)
|
|
Other
charitable organizations:
|
($120.00)
|
($123.25)
|
($126.40)
|
($129.23)
|
|
Interest
on personal loans – Scotiabank visa
|
($186.78)
|
($191.85)
|
($196.75)
|
($201.14)
|
|
Total
of the adjustments to be made to the estimated personal expenditures:
|
($9,880.42)
|
($9,869.09)
|
($9,997.31)
|
($10,412.27)
|
[62] The following is a summary of the revised amounts
that are to be used as the estimated personal expenditures of the Appellant in
1999, 2000, 2001, and 2002, taking into account his period of incarceration
that commenced on September 6, 2002:
|
Item:
|
1999
|
2000
|
2001
|
2002
|
|
Total
estimated personal expenditures per audit (before reduction for time
incarcerated):
|
$17,452.64
|
$17,794.79
|
$18,125.52
|
$18,722.04
|
|
Total
adjustments from above:
|
($9,880.42)
|
($9,869.09)
|
($9,997.31)
|
($10,412.27)
|
|
Revised
estimated personal expenditures:
|
$7,572.22
|
$7,925.70
|
$8,128.21
|
$8,309.77
|
|
Reduction
for period of incarceration:
|
|
|
|
($2,637.00)
|
|
Total
revised estimated personal expenditures:
|
$7,572.22
|
$7,925.70
|
$8,128.21
|
$5,672.77
|
[63] Since there is no logical basis to add $10,000 to
the Appellant’s income for 2000 based on cash seized in November of 2001, the
$10,000 should not have been added to the Appellant’s 2000 income and the amount
that should be assessed as the Appellant’s income for 2000 is $7,926.
[64] In Venne v. Her Majesty the Queen, [1984]
C.T.C. 223, 84 D.T.C. 6247, Strayer, J. of the F.C.T.D. made the following
comments on the meaning of gross negligence for the purposes of penalties
imposed under subsection 163(2) of the Income Tax Act:
“Gross negligence” must be taken to involve greater neglect than simply a
failure to use reasonable care. It must involve a high degree of negligence
tantamount to intentional acting, an indifference as to whether the law is
complied with or not.
[65] Subsection 163(3) of the Income Tax Act
provides that:
(3) Where, in an appeal under this Act, a penalty assessed by the
Minister under this section or section 163.2 is in issue, the burden of
establishing the facts justifying the assessment of the penalty is on the
Minister.
[66] Since the revised income amounts for 1999 and 2000 of
$7,572 and $7,926 exceed the reported income amounts of nil and $1 by a
significant amount, and since the Appellant acknowledged a source of unreported
income (trafficking in cocaine for which he was convicted in 2002) I find that
the Respondent has established the facts that would justify the assessment of
gross negligence penalties in this case. Filing returns with reported income of
$1 and nil in these circumstances indicates that the Appellant was indifferent
as to whether he complied with his obligation to properly complete his tax
returns that he filed. As well, indicating in his 1999 and 2000 tax returns
that he was single and therefore did not have a common law partner also
indicated an indifference as to whether he complied with his obligation to file
tax returns that correctly disclosed his living arrangements.
[67] Subsection 163(2) of the Income Tax Act
provided in 1999 and 2000, in part, as follows:
(2) False statements or omissions — Every person who, knowingly, or under
circumstances amounting to gross negligence, has made or has participated in,
assented to or acquiesced in the making of, a false statement or omission in a
return, form, certificate, statement or answer (in this section referred to as
a “return”) filed or made in respect of a taxation year for the purposes of
this Act, is liable to a penalty of the greater of $100 and 50% of the total of
(a) the amount, if any, by which
(i) the amount, if any, by which
(A) the tax for the year that
would be payable by the person under this Act
exceeds
(B) the amounts that would be
deemed by subsections 120(2) and (2.2) to have been paid on account of the
person's tax for the year
if the person's taxable income for
the year were computed by adding to the taxable income reported by the person
in the person's return for the year that portion of the person's understatement
of income for the year that is reasonably attributable to the false statement
or omission and if the person's tax payable for the year were computed by
subtracting from the deductions from the tax otherwise payable by the person
for the year such portion of any such deduction as may reasonably be attributable
to the false statement or omission
exceeds
(ii) the amount, if any, by which
(A) the tax for the year that
would have been payable by the person under this Act
exceeds
(B) the amounts that would be
deemed by subsections 120(2) and (2.2) to have been paid on account of the
person's tax for the year
had the person's tax payable for
the year been assessed on the basis of the information provided in the person's
return for the year,
[68] The revised income for 1999 is $7,572. The basic
personal tax credit under the Income Tax Act for 1999 was 17% of $6,794.
As a result the Appellant’s liability for taxes under the Income Tax Act (calculated
based on this income and only a claim for the basic personal tax credit) would
be less than $200 and therefore the penalty imposed under subsection 163(2) of
the Income Tax Act would be the minimum amount of $100 as this will be
greater than 50% of the amount of taxes payable by the Appellant under the Income
Tax Act. This would be the same for 2000 as the basic personal tax credit
amount for 2000 was 17% of $7,231. In the Reply it is stated that the penalty
was only based on the amount of taxes payable. There is no reference to any
alleged overpayment of any GST credit and therefore the penalty in this case
will only apply to the tax liability of the Appellant under the Income Tax
Act and hence the minimum amount of $100 will be the amount of the penalty
for 1999 and 2000.
[69] As a result, the appeal is allowed, without costs,
and the matter is referred back to the Minister of National Revenue for
reconsideration and reassessment on the basis that the Appellant’s income for
1999, 2000, 2001 and 2002 is as follows:
1999
– $7,572
2000
- $7,926
2001
- $8,128
2002
- $5,673
[70] The penalties assessed under subsection 163(2) of
the Income Tax Act for 1999 and 2000, are to be reduced to $100 for 1999
and $100 for 2000.
Signed at Halifax, Nova Scotia, this 25th day of February 2008.
“Wyman W. Webb”
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