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Docket: 2002-821(IT)I
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BETWEEN:
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IAN M. STRACHAN,
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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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____________________________________________________________________
Appeals heard on December 3, 2002 at Calgary,
Alberta
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Before: The Honourable Judge L.M. Little
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Appearances:
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For the Appellant:
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The Appellant himself
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Counsel for the Respondent:
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Elena Sacluti
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____________________________________________________________________
JUDGMENT
The
appeals from the assessments made under the Income Tax Act
for the 1999 and 2000 taxation years are allowed, without costs,
and the appeals are referred back to the Minister of National
Revenue for reconsideration and reassessment in accordance with
the attached Reasons for Judgment.
Signed at Vancouver, British Columbia, this 4th day of May
2004.
Little J.
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Citation: 2004TCC340
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Date: 20040504
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Docket: 2002-821(IT)I
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BETWEEN:
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IAN M. STRACHAN,
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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 Deborah Ann
Di Massimo (the "Mother") are the natural parents
of Briana Di Massimo.
[2] The Appellant and the Mother
signed a Maintenance Agreement dated the 12th day of May
1992.
[3] The Maintenance Agreement was made
pursuant to section 6 of the Alberta Parentage and
Maintenance Act, S.A. 1990, c. P-O. 7. Pursuant to the
Maintenance Agreement the Appellant agreed to pay maintenance
payments ("Maintenance Payments") for the expected
child in the amount of $200.00 per month commencing on the 15th
day of October 1992 and thereafter on the 15th day of each
month (Exhibit A-2).
[4] Briana Di Massimo
("Briana") was born on September 27, 1992.
[5] The Appellant commenced to make
maintenance payments to the Mother on October 15, 1992 in
the amount of $200.00 per month as required by the Maintenance
Agreement.
[6] In determining his income for the
1992, 1993, 1994, 1995, 1996, 1997 and 1998 taxation years the
Appellant deducted $2,400.00 ($200.00 x 12) per year for each of
the above years in connection with the Maintenance Payments that
he made to the Mother on behalf of Briana.
[7] The Minister of National Revenue
(the "Minister") allowed the deduction of the
Maintenance Payments claimed by the Appellant for the 1992-1998
taxation years.
[8] By Notices of Reassessment dated
the 22nd day of October 2001 the Minister reassessed the
Appellant's 1999 and 2000 taxation years to reduce the
Maintenance Payments paid by the Appellant to nil.
B. ISSUE:
[9] Is the Appellant entitled to
deduct Maintenance Payments in the amount of $2,400.00 per year
that he paid to the Mother on behalf of Briana in determining his
income for the 1999 and 2000 taxation years?
C.
ANALYSIS:
[10] During the hearing of the appeals the
Appellant stated that the Mother had included the Maintenance
Payments in determining her income for the 1999 and 2000 taxation
years.
[11] The Appellant provided the Court with
copies of the income tax returns of the Mother for the 1999 and
2000 taxation years. The income tax returns indicate that the
Mother reported support payments of $2,400.00 in each taxation
year.
[12] Counsel for the Respondent maintained
that the Maintenance Agreement was not an agreement obtained
pursuant to an order made by a competent tribunal.
[13] Paragraph 56.1(4) of the Income Tax
Act reads as follows:
"support amount" means an amount payable or
receivable as an allowance on a periodic basis for the
maintenance of the recipient, children of the recipient or both
the recipient, if the recipient has discretion as to the use of
the amount, and
. . .
(b) the payer is a natural parent of a child of the
recipient and the amount is receivable under an order made by a
competent tribunal in accordance with the laws of a province.
[14] In the recent decision of Robert
Fraser v. The Attorney General of Canada, [2004] F.C.J. No.
550 the Federal Court of Appeal held that payments made by Mr.
Fraser pursuant to a Maintenance Agreement prepared under the
Alberta Parentage and Maintenance Act would qualify as
child support payments within the meaning of the relevant
provisions of the Income Tax Act.
[15] I agree with the reasoning of the
Federal Court of Appeal in Robert Fraser v. The Attorney
General of Canada (supra). I believe that the
Fraser decision supports a finding in favour of the
Appellant's appeals.
[16] The appeals are allowed, without costs,
to permit the Appellant to deduct the following maintenance
payments:
1999
taxation
year
- $2,400.00
2000
taxation
year
- $2,400.00
Signed at Vancouver, British Columbia, this 4th day of May
2004.
Little J.
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