REASONS
FOR JUDGMENT
V.A. Miller J.
[1]
The Appellant has appealed the reassessment of
his 2012 taxation year wherein the Minister of National Revenue included the
amounts of $12,192 and $18,933 in his income. The issues in this appeal are
whether the Appellant failed to include in his income for the 2012 year, a
non-eligible retiring allowance of $12,192 and funds from a Registered
Retirement Savings Plan (“RRSP”) in the amount of $18,933.
[2]
In 2012 the Appellant was an Information
Technology Analyst with Precision Drilling Corporation (“Precision”). It
appeared from his testimony that in 2012 there was a disagreement between him
and Precision. The result was that the Appellant lost his employment with
Precision. They negotiated a settlement whereby the Appellant received the
non-eligible retiring allowance in question and the amounts he had contributed
to the company pension plan.
[3]
It was the Appellant’s position that he did not
fail to report the retiring allowance. He stated that it was already included
in the amount of employment income he reported in his income tax return. With respect
to the $18,933 which he received from his RRSP, the Appellant asserted that
this was not additional income to him. Rather it was a financial loss because
he had to withdraw it early and would not have it for future years when he
would retire.
Non-Eligible Retiring Allowance
[4]
The Appellant stated that he had been employed
with Precision from 2007 to September 2012. In 2012, his annual salary was
$85,000 and he received $7,083.33 each month. He provided calculations which
alleged that his non-eligible retiring allowance had already been included in
the employment income declared on his T4. His calculations were as follows:
|
Base Salary ($7,083.33 x 8.5)
|
$60,208.30
|
|
STIP (Company Bonus)
|
9,501.02
|
|
Other Taxable Benefits
|
361.18
|
|
Approximate Computed Income in 2012
|
$70,070.50
|
|
Box 14 of T4 for 2012
|
$82,634.23
|
|
Employment Income less Computed Income
|
$12,563.73
|
[5]
The problem with these calculations is that they
are based on the premise that the Appellant received an annual salary of
$85,000 in 2012. Counsel for the Respondent asked the Appellant for something
that would support the Appellant’s evidence that his salary was $85,000 in
2012. Counsel requested a copy of his contract with Precision or his bank
statements for 2012 or a pay stub for 2012. The Appellant had no documentary
evidence to support his premise.
[6]
The Appellant submitted a print out from a
computer which he stated was from Precision’s computer. The print out was
titled “Government Reportable Box Totals”. It showed the amounts which were on
the Appellant’s T4 from Precision for 2012. This document (Exhibit A-1, page 2)
and the T4 for 2012 (Exhibit A-1, page 3) do not support the Appellant’s
position.
[7]
Exhibit A-1, page 2 clearly showed that the
non-eligible retiring allowance was not included in the employment income. The
total amount of “income tax deducted” was subdivided into amounts deducted from
the regular income, amounts deducted from lump sum payments and amounts
deducted from non-per. Whereas, the Appellant’s employment income was not subdivided.
It and the non-eligible retiring allowance were shown as separate amounts in
this exhibit.
[8]
The documentary evidence submitted by the
Appellant demonstrated that the Minister’s assessment was correct and that the
Appellant failed to report the non-retiring allowance in his income tax return.
RRSP Amounts
[9]
With respect to the amount of $18,933 which the
Appellant received from his RRSP, he stated that he didn’t include it in his
2012 income tax return because taxes had been deducted from the amount and he
thought that he didn’t have to report it. He also said that this amount was not
“additional income” to him but was a financial loss and he didn’t have to
include it in income.
[10]
It is clear that whether or not the Appellant
will incur a financial loss in the future because of the withdrawal of $18,933
from his RRSP, the amount was income to him in 2012 and had to be included in
his 2012 income. Paragraph 56(1)(h) and subsection 146(8) of the ITA
are not ambiguous. They provide:
56. (1) Without
restricting the generality of section 3, there shall be included in computing
the income of a taxpayer for a taxation year,
Registered
retirement savings plan, etc.
(h)
amounts required by section 146 in respect of a registered retirement savings
plan or a registered retirement income fund to be included in computing the
taxpayer’s income for the year;
146(8) There
shall be included in computing a taxpayer’s income for a taxation year the
total of all amounts received by the taxpayer in the year as benefits out of or
under registered retirement savings plans, other than excluded withdrawals (as
defined in subsection 146.01(1) or 146.02(1)) of the taxpayer and amounts that
are included under paragraph (12)(b) in computing the taxpayer’s income.
[11]
In conclusion, the Appellant received the amount
of $12,192 as a non-eligible retiring allowance and the amount of $18,933 from
his RRSP in 2012. He failed to report these amounts as income and he was
properly assessed by the Minister. The appeal is dismissed.
Signed at Ottawa, Canada, this 26th
day of June 2015.
“V.A. Miller”
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