Date: 19990819
Docket: 98-1401(IT)I
BETWEEN:
TAMMY ZINN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Watson, D.J.T.C.C.
[1] This appeal was heard in Regina,
Saskatchewan on August 5, 1999, under the Informal Procedure.
[2] In computing income for the 1994,
1995 and 1996 taxation years, the Appellant claimed child care
expenses in the amount of $3,010.00 for 1994 and $1,655.00 for
1995 and a personal credit in respect of a wholly dependent
person in the amount of $5,380.00 for each year, 17% of which is
the actual non-refundable tax credit.
[3] In reassessing the Appellant for
the 1994, 1995 and 1996 taxation years, the Minister of National
Revenue (the "Minister") disallowed the claim for child
care expenses of $3,010.00 for 1994; reduced the claim for child
care expenses by $775.00 to $880.00; disallowed the claim for
personal credit in respect of a wholly dependent person in the
amount of $5,380.00 for each year; and assessed penalties in the
amounts of $471.20, $471.25 and $471.67 respectively pursuant to
subsection 163(2) of the Income Tax Act (the
"Act").
[4] In reassessing the Appellant for
the three years in issue, the Minister made the following
assumptions of fact taken from the Reply to Notice of Appeal:
"(a) the Appellant is
the natural mother of two dependent children, as follows:
Name
Date of Birth
Jenna Lorraine Zinn
("Jenna")
July 28, 1993
Dalton Zinn
("Dalton")
February, 1997
(b) child care
expenses claimed in the amount of $3,010.00 for 1994 and
$1,655.00 for 1995 were in respect of payments made for child
care services provided by Jaime VanLoosen
("Jaime");
(c) Jaime is the
sister of the Appellant;
(d) Jaime is related
to the Appellant within the meaning of the Act;
(e) child care
expenses disallowed in the amount of $3,010.00 for 1994 and
$755.00 for 1995 were in respect child care services provided by
Jaime during the period of time that she was under 18 years of
age;
(f) the claim
for the personal credit for a wholly dependent person that was
made by the Appellant for each year was in respect of Jenna;
(g) Curtis Zinn is
the natural father of both Jenna and Dalton;
(h) at all relevant
times to the 1994, 1995 and 1996 taxation years, the Appellant
cohabited with Curtis Zinn, who is a person of the opposite sex,
in a conjugal relationship;
(i) the
Appellant knowingly, or under circumstances amounting to gross
negligence in carrying out a duty or obligation imposed by or
under the Act, made or participated in, assented to or
acquiesced in the making of a false statement or omission in the
income tax returns filed for the 1994, 1995 and 1996 taxation
years, as a result of which the tax that would have been payable
assessed on the information provided in the Appellant's
income tax returns filed for those years was less than the tax
payable by the amount of $942.40 for 1994, $942.50 for 1995 and
$943.34 for 1996."
[5] At the hearing, the Appellant
admitted paragraphs (a) to (g) and denied paragraphs (h) and
(i).
[6] The Respondent admitted the
following allegations of fact of the Appellant in her Notice of
Appeal:
"(a) that the address
and the telephone number Curtis Zinn used were that of the
Appellant;
(b) that Curtis Zinn
jointly signed the power bills with the Appellant;
(c) that the
enumeration was done with a city address; and
(d) that beneficiary
forms were done in the Appellant's name for her daughter,
Jenna."
[7] At the hearing of the appeal, the
Appellant agreed that the child care expenses of $3,010.00 and
$775.00 for 1994 and 1995 respectively were properly disallowed
by the Minister in his reassessment. The two issues before the
Court in the appeal are:
(a) is the Appellant entitled to
a personal tax credit in respect of a wholly dependent person for
the 1994, 1995 and 1996 taxation years; and
(b) did the Minister properly assess
penalties for the three years in issue pursuant to subsection
163(2) of the Act.
[8] The Appellant has the onus of
establishing on a balance of probabilities that the
Minister's reassessment disallowing the personal tax credit
for the three years in issue was ill-founded in fact and in
law; the Respondent has the onus insofar as the penalties are
concerned.
[9] The three witnesses heard at the
appeal were the Appellant, Curtis Zinn and Paul Gee, the Revenue
Canada auditor charged with the reassessment. The Appellant did
not dispute the fact that Mr. Zinn was the father of her
two children; however, she disputed the allegation that he
cohabited with her during the three years in issue. The
Appellant's testimony relied on a vague memory of the years
in issue; much of her testimony was unreliable and contradicted
not only by a great amount of documentary evidence but also by
her admission in cross-examination that Mr. Zinn resided at her
address about 50% of the time during the three years in issue; in
the Designation of Beneficiary dated December 23, 1995, the
one dated March 26, 1996 and the Benefits Plan enrolment form
dated August 17, 1996, the Appellant admitted that she was
referred to as the common law spouse of Curtis Zinn.
[10] In his testimony, Mr. Zinn admitted
that he used the Appellant's address on documentation
relating to his place of employment, T4, Unemployment Insurance
benefit applications, group life insurance enrolment forms and
income tax returns; he also gave his telephone number as the one
of the Appellant's residence.
[11] Taking into consideration all of the
circumstances, including the testimony of the witnesses, the
admissions and documentary evidence in the light of subsection
252(4) of the Act and the case law provided at the
hearing, I am satisfied that the Appellant has failed in her onus
of establishing on a balance of probabilities that she was
entitled to the personal tax credit in respect of a wholly
dependent child for the 1994, 1995 and 1996 taxation years.
[12] Furthermore, I am satisfied that the
Respondent has succeeded in establishing on a balance of
probabilities that the Appellant knowingly participated in making
false statements in the 1994, 1995 and 1996 income tax returns
and that the penalties in the amounts of $471.20, $471.25 and
$471.67 respectively for the three years were properly assessed
pursuant to subsection 163(2) of the Act.
[13] The appeal is accordingly
dismissed.
Signed at Ottawa, Canada, this 19th day of August 1999.
D.J.T.C.C.
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