Leblanc v. The Queen, docket 1999-4016-IT-I (Informal Procedure)

Date: 20010308

Docket: 1999-4016-IT-I

BETWEEN:

MARIE-NICOLE LEBLANC,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasonsfor Judgment

Tardif, J.T.C.C.

[1]            This is an appeal for the 1996 and 1997 taxation years.

[2]            For the purpose of issuing and justifying the child tax benefit notices dated November 20, 1998, for the 1996 and 1997 base taxation years, the Minister of National Revenue ("the Minister") assumed, inter alia, the following facts:

[TRANSLATION]

(a)            in her tax returns for the years at issue, the appellant indicated that she was living common-law with Frédéric Tremblay;

(b)            in his tax returns for the years at issue, Frédéric Tremblay indicated that he was living common-law with the appellant;

(c)            during the taxation years at issue, the net income of the appellant and Frédéric Tremblay was as follows:

                                                                                1996                        1997

                appellant                                                 22,959                      18,007

                Frédéric Tremblay                                 15,801                    16,928

                                                                                $38,760 $34,935

(d)            when she filled out the child tax benefit application form on May 2, 1997, the appellant indicated, inter alia, that Frédéric Tremblay was her common-law partner;

(e)            by mistake, the Minister had previously calculated the appellant's child tax benefits for the 1996 and 1997 base taxation years without taking her common-law partner's income into account;

(f)             on November 20, 1998, the Minister revised the calculation of the appellant's child tax benefits for the 1996 and 1997 base taxation years by taking the family income into account.

[3]            In support of her appeal, the appellant argued that she did not have to repay the amount of $1,768.42 because, after receiving it, she took steps to obtain an explanation as to why that amount had been credited to her account.

[4]            The respondent's representatives told her that a review of her file showed that such a refund was in order. On the strength of the information thus obtained, she used the money for her children.

[5]            A few months later, she received another notice from the Minister stating that she had to return the money. She again contacted the Department of National Revenue ("the Department") for an explanation, whereupon she was advised that the refund was the result of a mistake.

[6]            The appellant is therefore disputing the respondent's right to claim the amount in question from her, relying in particular on the fact that the Department's representatives twice told her that she was fully entitled to that amount.

[7]            The issue is thus whether the Minister could lawfully revise the calculation of the appellant's child tax benefits for the 1996 and 1997 base taxation years.

[8]            Section 152(4) of the Income Tax Act ("the Act") states the following on this point:

                (4) Assessment and reassessment. Subject to subsection (5), the Minister may at any time assess tax for a taxation year, interest or penalties, if any, payable under this Part by a taxpayer or notify in writing any person by whom a return of income for a taxation year has been filed that no tax is payable for the year, and may

                (a) at any time, if the taxpayer or person filing the return

                      (i) has made any misrepresentation that is attributable to neglect, carelessness or wilful default or has committed any fraud in filing the return or in supplying any information under this Act, or

                      (ii) has filed with the Minister a waiver in prescribed form within the normal reassessment period for the taxpayer in respect of the year,

                (b) before the day that is 3 years after the expiration of the normal reassessment period for the taxpayer in respect of the year, if

                      (i) an assessment or reassessment of the tax of the taxpayer was required pursuant to subsection (6) or would have been required if the taxpayer had claimed an amount by filing the prescribed form referred to in that subsection on or before the day referred to therein,

                      (ii) there is reason, as a consequence of the assessment or reassessment of another taxpayer's tax pursuant to this paragraph or subsection (6), to assess or reassess the taxpayer's tax for any relevant taxation year,

                      (iii) there is reason, as a consequence of a transaction involving the taxpayer and a non-resident person with whom the taxpayer was not dealing at arm's length, to assess or reassess the taxpayer's tax for any relevant taxation year, or

                      (iv) there is reason, as a consequence of an additional payment or reimbursement of any income or profits tax to or by the government of a country other than Canada, to assess or reassess the taxpayer's tax for any relevant taxation year, and

                (c) within the normal reassessment period for the taxpayer in respect of the year, in any other case,

                reassess or make additional assessments, or assess tax, interest or penalties under this Part, as the circumstances require, except that a reassessment, an additional assessment or an assessment may be made under paragraph (b) after the normal reassessment period for the taxpayer in respect of the year only to the extent that it may reasonably be regarded as relating to

(d) the assessment or reassessment referred to in subparagraph (b)(i) or (ii),

(e) the transaction referred to in subparagraph (b)(iii), or

(f) the additional payment or reimbursement referred to in subparagraph (b)(iv).

[9]            In my opinion, the Minister was entitled to revise the calculations concerning the appellant's child tax benefits; he could therefore rectify the mistake made and issue a reassessment.

[10]          Acknowledging the mistake, the Minister did not claim any interest on the amount whose repayment he requested.

[11]          The appellant argued that, for two main reasons, she cannot be made subject to the assessment: first, because it was the result of a mistake by the Department, and second, because she had properly done what was required of her and provided all the appropriate and necessary information. She said that she was surprised and astonished by the tax refund and so contacted representatives of Revenue Canada a few times to make sure that she was really entitled to the refund the respondent had sent her.

[12]          These are the arguments of the appellant, who appeared alone before the Court.

[13]          On an equitable approach, I feel that the appellant's case certainly inspires sympathy, especially since Revenue Canada has or ought to have the necessary resources to avoid such a mistake. However, the provisions of the Act in this regard seem clear to me: they authorize the Department to issue a reassessment. Consequently, I must dismiss the appeal.

Signed at Ottawa, Canada, this 8th day of March 2001.

"Alain Tardif"

J.T.C.C.

Translation certified true on this 28th day of June 2002.

[OFFICIAL ENGLISH TRANSLATION]

Erich Klein, Revisor

[OFFICIAL ENGLISH TRANSLATION]

1999-4016(IT)I

BETWEEN:

MARIE-NICOLE LEBLANC,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on July 18, 2000, at Québec, Quebec, by

the Honourable Judge Alain Tardif

Appearances

For the Appellant:                                The Appellant herself

Counsel for the Respondent:                Valérie Tardif

JUDGMENT

          The appeal from the child tax benefit determination for the 1996 and 1997 base taxation years is dismissed in accordance with the attached Reasons for Judgment.

Signed at Ottawa, Canada, this 8th day of March 2001.

"Alain Tardif"

J.T.C.C.

Translation certified true

on this 28th day of June 2002.

Erich Klein, Revisor