Docket: 2005-1083(IT)I
BETWEEN:
YVON TREMBLAY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
____________________________________________________________________
Appeals
heard on August 24, 2006, at Chicoutimi, Quebec.
Before: The Honourable
Justice Alain Tardif
Appearances:
|
For the Appellant:
|
The Appellant himself
|
|
Counsel for the Respondent:
|
Christina Ham
|
____________________________________________________________________
JUDGMENT
The appeals from the assessments made under
the Income Tax Act for the 2000 and 2001 taxation years are dismissed,
without costs, in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 14th day of
September 2006.
"Alain Tardif"
Translation
certified true
on this 28th day
of June, 2007.
Brian McCordick,
Translator
Citation: 2006TCC486
Date: 20060914
Docket: 2005-1083(IT)I
BETWEEN:
YVON TREMBLAY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Tardif J.
[1] These are appeals
from assessments made by the Minister of National Revenue
("the Minister") under the Income Tax Act ("the
Act") in respect of the 2000 and 2001 taxation years.
[2] The issue is
whether, in computing the Appellant's income from an office or employment for
these taxation years, the Minister properly disallowed the deduction of the
amounts of $8,315 and $10,699, which had been claimed as
"other employment expenses".
[3] In making and
confirming the assessments, the Minister assumed the following facts:
[TRANSLATION]
(a) During the
taxation years in issue, the Appellant was employed by Combined Insurance
Company of America. (admitted)
(b) During the
taxation years in issue, the Appellant was sub-regional manager for the Chicoutimi, Saguenay, Lac Saint‑Jean, La Baie, Dolbeau, Forestville and
Charlevoix area. (admitted)
(c) The Appellant
was responsible for a team of 30 agents during the taxation years in issue. (admitted)
(d) During the 2000
and 2001 taxation years, the Appellant reported the amounts of $15,305 and
$18,218, respectively, as gross commissions. (admitted)
(e) The Appellant
claimed the amounts of $13,465 and $15,697, respectively, as "other
employment expenses" for the 2000 and 2001 taxation years. (admitted)
(f) According to
Form T2200, the "Declaration of Conditions of Employment" filled out
by the employer, the Appellant was entitled to the following reimbursements in
respect of the 2000 taxation year: (admitted in part)
|
(i)
(ii)
(iii)
|
automobile expenses
expenses (perfor'ce of duties)
home-office expenses
|
$6,832
$18,994
$3,868
$29,694
|
(g) According to Form T2200, the
"Declaration of Conditions of Employment" filled out by the employer,
the Appellant was entitled to the following reimbursements in respect of the
2001 taxation year: (denied)
|
(i)
(ii)
(iii)
|
automobile expenses
expenses (perfor'ce of duties)
home office expenses
|
$5,218
$19,483
$2,400
$27,101
|
(h) According to form T2200, the
"Declaration of Conditions of Employment" filled out by the employer
in respect of the 2000 taxation year, the Appellant was reimbursed at a rate of
$0.23 per kilometre for 29,704 business-related kilometres driven. (admitted)
(i) According to form T2200, the
"Declaration of Conditions of Employment" filled out by the employer
in respect of the 2001 taxation year, the Appellant was reimbursed at a rate of
$0.23 per kilometre for 22,688 business-related kilometres driven.
(admitted)
(j) For the taxation
year 2000, a total of $4,477 worth of automobile expenses was allowed based on
the following calculations: (admitted)
|
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
|
fuel
maintenance and repair
insurance
registration
rental costs
personal use 20%
reimbursement by employer
|
$3,736
$1,173
$960
$203
$8,064
$14,136
$2,827
$11,309
$6,832
$4,477
|
(k) For the 2000 taxation year, the Minister
allowed the following expenses: (denied)
|
(i)
(ii)
(iii)
|
automobile expenses
advertising and promotion
accounting fees
|
$4,477
$523
$150
$5,150
|
(l) For the 2001 taxation year, an amount of
$4,153 worth of automobile expenses was allowed based on the following
calculation: (denied)
|
(i)
(ii)
(iii)
(iv)
(v)
(vi)
|
fuel
maintenance of repair
insurance
registration
rental costs
personal use 28%
|
$2,912
$1,263
$1,022
$377
$7,515
$13,089
$3,718
$9,371
|
(m) (denied)
|
|
reimbursement by employer
|
$5,218
$4,153;
|
(n) For the 2001 taxation year, the Minister
allowed the following expenses: (denied)
|
(i)
(ii)
(iii)
|
automobile expenses
advertising and promotion
accounting fees
|
$4,153
$695
$150
$4,998
|
(o) For each of the taxation years in issue,
expenses were disallowed because they had been reimbursed by the employer. (denied)
|
(i)
(ii)
|
Year
2000
2001
|
Claimed
13,465
15,697
|
Allowed
5,150
4,998
|
Disallowed
8,315
10,699
|
[4] In support of his
case, which he had the burden to prove, the Appellant essentially argued that
he received income in two different capacities: as an employee of Combined
Insurance Company of America, and as a commissioned salesperson with the same
company.
[5] He submitted two
contracts in support of his arguments: his commissioned agent's contract and his
district manager's contract.
[6] The Appellant was
reimbursed by Combined Insurance Company of America for the expenses associated
with his work as a salaried manager.
[7] Thus, he claimed
that the only expenses for which he was reimbursed were the expenses incurred
as part of his salaried employment. He submitted that in addition to being
reimbursed by his employer for his expenses, he was entitled to deduct the
expenses incurred in relation to his commissioned work.
[8] For his part, the
person responsible for the Appellant's file explained the steps leading up to
his assessment. He admitted that he assumed that the expenses had been incurred
for the Appellant's work as a whole. The expenses taken into account were the
ones that the employer reimbursed.
[9] In order to establish
that his claim was meritorious, the Appellant, to avoid confusion, would have
had to persuasively and coherently show which expenses were directly related to
each of his two positions.
[10] The Appellant was
unable accurately to show how many kilometres were driven in connection with
each of his positions; with very little conviction, he submitted that the
office expense reimbursement essentially corresponded to the cost of
long-distance calls, but the relevant documents did not support this
interpretation at all.
[11] Otherwise, the bulk
of the Appellant's representations sought to show that a distinction should be
drawn between his two sources of income: employment income; and income from commissioned
self-employment.
[12] Even the evidence
submitted with respect to this aspect was not decisive. Indeed, the fact that the
Appellant signed a contract several years ago, setting out his conditions of
employment and establishing that he was paid by commission, does not
automatically have the effect of demonstrating the validity of his allegations,
especially since the legal relationship described in the contract might well
have been necessary in order for the Appellant to have employee status, which
enabled him occasionally to hold himself up as an example to the salespersons
under his supervision.
[13] All assessments are
presumed to have been made in accordance with the relevant facts and applicable
legislation. An attack against the merits of an assessment requires more than
mere criticism of the Minister's approach; it is absolutely essential to prove
what the assessment should have been.
[14] Here, the Appellant
essentially submitted that he had two different functions, and that this enabled
him to claim expenses in excess of what his employer reimbursed. It would
have been important, and perhaps even fundamental, for him to submit decisive
evidence as to the details of the disallowed expenses that were associated
exclusively with his self-employment.
[15] In the absence of
such evidence, I must find that the Appellant has not met his burden of proof,
and, consequently, the appeals are dismissed.
Signed at Ottawa, Canada, this
14th day of September 2006.
"Alain Tardif"
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