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Citation: 2005TCC569
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Date: 20050923
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Docket: 2004-4187(IT)I
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BETWEEN:
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TERRI L. HANLON,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Little J.
A. FACTS:
[1] The Appellant and her ex-spouse, Michael Gilchuk ("Michael"), were married on January 22, 1989.
[2] Two sons were born:
Alexander - 1992
Zachery - 1994
(Hereinafter collectively referred to as the "Children".)
[3] The Appellant and Michael were divorced pursuant to a Divorce Judgment issued by the Court of Queen's Bench of Alberta on May 16, 2000.
[4] The Appellant and Michael signed an Agreement dated November 12, 2002 (Exhibit A-2) in which they agreed that they had joint custody of the Children and that Michael would not make a claim for Canada Child Tax Benefit ("CCTB").
[5] The Appellant and Michael signed an undated document (Exhibit A-3). This document reads as follows:
We Terri L. Hanlon and Michael S. Gilchuk are in agreement that Terri claims the Child Tax Benefits for Alexander and Zachery (Starting November 3, 1996). Until such a time that we both agree in writing to make a different agreement on the Child Tax Benefit.
We also agree that Terri will claim Zachery on her yearly income tax return and Michael will claim Alexander on his yearly tax return. Until such a time that we both agree in writing to make a different agreement on yearly tax returns.
[6] By CCTB Notices dated December 12, 2003 the Minister of National Revenue informed the Appellant that with respect to the Period of July 2001 to November 2003 for the 2000, 2001 and 2002 base taxation years the Appellant was not entitled to the CCTB based on a change to the eligible children.
[7] The Appellant was in receipt of CCTB payments for the Period in the amount of $9,160.72.
[8] Michael filed a CCTB application on May 13, 2003 effective November 2000 and Michael received CCTB payments for the Period.
[9] The Appellant was in receipt of GSTC payments in the amount of $977.50.
B. ISSUES:
[10] The issues are:
(a) Whether the Appellant is considered an eligible individual for the Children for the Period July 2001 to November 2003 and therefore, whether she is entitled to the CCTB for that Period pursuant to section 122.6 of the Income Tax Act (the "Act");
(b) Whether the Appellant's Children are qualified dependents for the quarters beginning July 2002 to October 2003 for the 2001 and 2002 base taxation years and therefore, whether she is entitled to the GSTC for that Period in respect of the Children pursuant to section 122.5 of the Act;
(c) Whether the Appellant was overpaid CCTB for the 2000, 2001 and 2002 base taxation years in the amount of $9,161.72 consisting of:
(i) $4,550.34 for the 2000 base taxation year;
(ii) $3,525.50 for the 2001 base taxation year; and
(iii) $1,085.88 for the 2002 base taxation year; and
(d) Whether the Appellant was overpaid GSTC for the 2001 and 2002 base taxation years in the amount of $405.00 consisting of:
(i) $297.00 for the 2001 base taxation year; and
(ii) $108.00 for the 2002 base taxation year.
[11] During the hearing the Appellant testified that from the time of separation until December 2002 she received the CCTB for both of the Children.
[12] The Appellant also testified that she and her ex-husband agreed (verbally) that Michael would claim the CCTB for one child and she would claim the CCTB for the other child.
[13] The Appellant also testified that the Canada Revenue Agency ("CRA") reversed their position regarding the CCTB payments because Michael told an official of the CRA that he was the "primary caregiver" of the Children since 2000.
[14] The Appellant also testified that she was the primary caregiver of the Children from January 2000 to October 2000. The Appellant said: "In October 2000 we agreed to a 50-50 deal regarding the children." Michael testified that beginning in January 2003 until December 2003 they had a 50-50 sharing arrangement regarding the Children.
[15] The Appellant also testified that commencing on January 1, 2001 until December 2002 she paid Michael $300.00 per month regarding extra costs for the Children ($150.00 per child).
[16] Michael testified during the hearing that he and his common-law wife Darlene were the primary caregivers of the Children.
[17] It is apparent from the testimony referred to above that we have a conflict between the parties since the Appellant and Michael have each testified that they were the primary caregiver of the Children during the Periods in question.
[18] It should also be noted that from January 1, 2001 to December 2002 while the Appellant received the CCTB she transferred $300.00 per month to Michael.
[19] After carefully considering the testimony of the parties, the legislation and the relevant jurisprudence, I have concluded as follows:
1. The Appellant is entitled to receive the CCTB and the GSTC for the Periods in question for Zachery; and
2. Michael is entitled to receive the CCTB and the GSTC for the Periods in question for Alexander.
[20] The appeals for the 2000, 2001 and 2002 base taxation years are allowed, without costs, and the assessments are referred back to the Minister of National Revenue for reconsideration and reassessment as indicated above.
Signed at Vancouver, British Columbia, this 23rd day of September 2005.
Little J.
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