Kwarteng v. The Queen, docket 2000-2131-IT-I (Informal Procedure)

Date: 20010612

Docket: 2000-2131-IT-I

BETWEEN:

BEATRICE KWARTENG,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

O'Connor, J.T.C.C.

[1]            This appeal was heard at Windsor, Ontario on May 29, 2001.

[2]            The only issue is whether the Appellant is entitled to a child care expense deduction of $4,400.00 in the 1996 taxation year pursuant to section 63 of the Income Tax Act (the "Act") in respect of her three children - issue of an earlier marriage. This, in turn, will depend upon whether the Appellant, although having exclusively paid the child care expenses, is excluded from deducting same because her income was higher than that of her second husband, Thomas Fofie ("spouse"), who commenced living with the Appellant in November 1996 and who was married to the Appellant on December 27, 1996.

Submission of the Appellant

[3]            The Appellant's submission was that it is not fair and equitable for her to lose the deduction because she only married with four days left in 1996 and, had she known, she could easily have postponed the wedding until early 1997. She also considers it unfair because she is the one who paid the expenses, the spouse having come from a third world country with no monies and no income in 1996.

Submissions of the Respondent

[4]            The Respondent's position is relatively straightforward. The Appellant's spouse is to be considered as her spouse in 1996. The Appellant resided with the spouse in November and December of 1996 and at a point in time in early January 1997 the spouse went to Toronto to seek work. In other words, counsel for the Respondent contends that the spouse fits the definition of supporting person provided for in section 63 simply by reason of the fact that he was the spouse of the Appellant and resided with the Appellant during the periods mentioned above. She maintains that is what the law provides for and, further, that the law provides that the deduction can only be taken by the person who has the lower income.

[5]            Counsel further points to paragraph 3(f) of the Act which provides that a taxpayer with no income is deemed to have an income of $0.00. Counsel points out that this provision was enacted after Court decisions held that where one spouse had no income at all, the spouse with income could deduct the child care expenses since there was only one income (Fiset v. M.N.R., (TCC) 88 DTC 1226 and McLaren v. M.N.R. (TCC) 88 DTC 1259). After the enactment of paragraph 3(f) this Court determined in Fromstein v. The Queen (TCC) 93 DTC 1735 that, in effect, paragraph 3(f) negated the decisions made in those two cases. In other words, even though the spouse had no income, he is considered to have the lower income and is the person entitled to the deduction even though it may be useless to that spouse.

[6]            Obviously my sympathies in this matter are with the Appellant who has borne the child care expenses for her three children and the spouse made no contribution at all. However, as a Judge of this Court, I am obliged to enforce the provisions of the Act even where, in certain cases, they appear to be unfair. The combined effect of section 63 and paragraph 3(f) of the Act can only lead to the conclusion that the Appellant is not entitled to the deduction in question.

[7]            It is clear that section 63 of the Act allows for a deduction of child care expenses, but it is equally clear from subsection 63(3) that a supporting person includes the taxpayer's spouse or common law partner and with few exceptions (none of which are applicable in this case) it is the person who has the lowest income who must take the deduction and this is so regardless of who actually incurred the expenses.

[8]            Consequently, the appeal must be dismissed.

                Signed at Ottawa, Canada this 12^th day of June 2001.

"T. O' Connor"

J.T.C.C.

COURT FILE NO.:                                                 2000-2131(IT)I

STYLE OF CAUSE:                                               Beatrice Kwarteng and The Queen

PLACE OF HEARING:                                         Windsor, Ontario

DATE OF HEARING:                                           May 29, 2001

REASONS FOR JUDGMENT BY:      The Honourable Judge Terrence O'Connor

DATE OF JUDGMENT:                                       June 12, 2001

APPEARANCES:

For the Appellant:                                                 The Appellant herself

Counsel for the Respondent:              Rosemary Fincham

COUNSEL OF RECORD:

For the Appellant:                

Name:                     

Firm:                       

For the Respondent:                             Morris Rosenberg

                                                                                Deputy Attorney General of Canada

                                                                                                Ottawa, Canada

2000-2131(IT)I

BETWEEN:

BEATRICE KWARTENG,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on May 29, 2001 at Windsor, Ontario, by

the Honourable Judge Terrence O'Connor

Appearances

For the Appellant:                                The Appellant herself

Counsel for the Respondent:                Rosemary Fincham

JUDGMENT

          The appeal from the assessment made under the Income Tax Act for the 1996 taxation year is dismissed in accordance with the attached Reasons for Judgment.

          Signed at Ottawa, Canada this 12^th day of June 2001.

"T. O' Connor"

J.T.C.C.