REASONS
FOR JUDGMENT
V.A. Miller J.
[1]
The issue in this appeal is whether the Appellant
is entitled to claim moving expenses of $1,530 pursuant to paragraph 62(3)(c)
of the Income Tax Act (“ITA”).
[2]
The Appellant did not appear at the hearing of
her appeal but she was represented by Donald G. Mitchener, FCPA, FCA who acted
as her agent. There were no witnesses and no documents entered into evidence
and Mr. Mitchener proceeded with the appeal on the basis of a legal argument
only.
[3]
In 2012, the Appellant and her spouse moved from
Saskatoon, Saskatchewan to Guelph, Ontario. Her move was accepted by the Minister
of National Revenue (the “Minister”) as an “eligible relocation” within the
meaning of that term in subsection 248(1) of the ITA. She claimed total
moving expenses of $5,616.63 and was allowed a deduction of $4,086.63. The
amount allowed by the Minister included transportation and storage costs for
household effects; travel expense; three nights’ accommodation expenses; and,
meals expenses for three days. As part of her total moving expenses, the
Appellant also claimed temporary living expenses in the amount of $1,530. This
was calculated as a meals expense of $51 per day for 15 days for her and her
spouse. She did not claim an amount for lodgings for these 15 days.
[4]
The Minister disallowed the deduction of $1,530
on the basis that the Appellant did not incur temporary living expenses.
[5]
A moving expense for temporary living expenses
is provided in paragraph 62(3)(c) of the ITA. It reads:
62(3) In
subsection 62(1), “moving expenses” includes any expense incurred as or on
account of
…
(c) the cost to
the taxpayer of meals and lodging near the old residence or the new residence
for the taxpayer and members of the taxpayer’s household for a period not
exceeding 15 days,
Appellant’s Position
[6]
It was the Appellant’s position that there was
no requirement to prove that the costs for temporary living expenses were
actually incurred. Mr. Mitchener stated that this paragraph of the ITA
is administered by the Canada Revenue Agency (“CRA”) so that it creates a
non-rebuttable presumption that the expenses were incurred. He stated that the
only criterion for the application of paragraph 62(3)(c) is that there
be an “eligible relocation”. Once it is accepted that there is an “eligible
relocation”, the taxpayer can claim meals and lodging expenses for 15 days. The
days do not have to be sequential and no receipts are necessary if one uses the
simplified method.
[7]
In support of the Appellant’s position, Mr.
Mitchener relied on a News Release dated December 14, 1999 from the then CCRA,
now called the CRA. According to the News Release, the CRA announced that for
1999 and subsequent years, taxpayers would have the option of choosing a
detailed or simplified method to calculate certain travel expenses for moving.
Use of the detailed method meant that the taxpayer had to keep and submit
receipts upon request. Use of the simplified method meant that the taxpayer
could use various pre-established flat rates. In particular, there was a
prescribed flat rate for mileage and one for meals. In 2012, the flat rate for
meals was $51 per person per day.
[8]
Mr. Mitchener also relied on the former
Interpretation Bulletin IT-178R3 which also explained the simplified and
detailed options which a taxpayer had when claiming various moving expenses.
[9]
Mr. Mitchener stated that his client did incur
meal expenses but she used the simplified method to calculate her meal expenses
in accordance with the News Release from the CRA. The Appellant had no
receipts. In conclusion, he argued that paragraph 62(3)(c) allowed the
Appellant to claim meal expenses for 15 days; the paragraph did not require her
to incur the expenses in order to claim them; the Appellant could claim meal
expenses without claiming an expense for lodging; and, paragraph 62(3)(c)
does not contain the word “temporary” with respect to “meals and lodging”.
Respondent’s Position
[10]
Counsel for the Respondent acknowledged that the
CRA introduced a simplified method which taxpayers could use to calculate their
moving expenses. That method allows a taxpayer to calculate their meal and
mileage expenses by using prescribed rates. No receipts are necessary. However,
the expenses must have been incurred. Counsel argued that the Appellant has the
burden to show that the moving expenses she claimed were actually incurred.
Analysis
[11]
I agree with counsel for the Respondent.
[12]
In this appeal, the relevant statutory law is
contained in paragraph 62(3)(c). It clearly requires that a “moving
expense” be incurred. The opening sentence to subsection 62(3) reads: “moving
expenses” includes any expense incurred. An expense has been incurred when a
taxpayer has a legal obligation to pay a sum of money for the expense: Wawang
Forest Products Ltd. v R, 2001 FCA 80 at paragraph 9. Consequently, I
disagree with the Mr. Mitchener’s premise which was that a taxpayer who has an
“eligible relocation can always claim meals expenses for 15 days. Those meal
expenses have to be incurred in accordance with paragraph 62(3)(c).
[13]
Mr. Mitchener has also argued that the Appellant
can claim meal expenses without claiming expenses for lodging. I disagree. It
is my view that paragraph 62(3)(c) allows for temporary living expenses
similar to “room and board expenses”. The Appellant cannot live in her own home
and claim an expense for the meals only. The expenses allowed pursuant to
paragraph 62(3)(c) are those expenses incurred when one is required to
live in temporary accommodations either near their old residence or near their
new residence but not in their old or new residence.
[14]
The Appellant can rely on paragraph 62(3)(c)
only if she can show that she incurred expenses for temporary living expenses.
She is required to submit receipts for her lodgings even if she has used the
simplified method to calculate her meal expenses. The receipts for lodgings
would have supported the Appellant’s position that she incurred expenses for
meals.
[15]
Although paragraph 62(3)(c) does not
contain the word “temporary”, it is obvious that the paragraph refers to
temporary living expenses because it only includes the expenses incurred for a
period which does not exceed 15 days. The period of time for meals and lodging
expenses near the old residence plus the time for those expenses near the new
residence cannot exceed 15 days. These are expenses which are incurred for a
brief or temporary period.
[16]
In conclusion, the Appellant used the simplified
method to claim moving expenses and she did not have to submit receipts for her
meal expenses but she was required to submit receipts for the cost of lodgings.
Apparently, she did not incur an expense for lodgings either near her old
residence or her new residence. It is my view that paragraph 62(3)(c) is
not applicable in the circumstances of this appeal. For all of these reasons,
the appeal is dismissed.
Signed at Ottawa, Canada, this 10th day of December 2015.
“V.A. Miller”
Email this Content