Citation: 2013 TCC 222
Date: 20130709
Dockets: 2011-3625(IT)I
2011-3626(IT)I
2012-4868(IT)I
BETWEEN:
JONATHAN J. HAYFRON-BENJAMIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Boyle J.
[1]
Mr. Hayfron-Benjamin
has appealed the Canada Revenue Agency’s (“CRA”) reassessments of his 2008,
2009 and 2010 taxation years. His informal appeal in Halifax, Nova Scotia
lasted a full day, including a lengthy adjournment to permit the taxpayer to go
home to get additional documents. The taxpayer gave evidence on his own behalf.
The Crown had a CRA appeals officer testify.
[2]
The reassessments each
included additional unreported employment income in Mr. Hayfron-Benjamin’s
income. The 2008 and 2009 reassessments also include a retiring allowance from
an employer in question each year. In addition, in each of the 2009 and 2010
taxation years, CRA reassessed a subsection 163(1) penalty in respect of
repeated underreporting of income.
[3]
The unreported income
in issue in these appeals was approximately $35,000 in 2008, $19,000 in 2009
and $32,000 in 2010. The taxpayer’s reported income prior to the amounts in
issue being reassessed was all employment income in the amounts of
approximately $36,000 in 2008, $28,000 in 2009 and $21,000 in 2010.
[4]
The reassessed amounts
included in income from three different employers had all been subject to income
tax withholding and T4 or T5 information return reporting. It appeared from the
parties’ pleadings and argument that, as a practical matter, it was the 10%
penalties assessed in 2009 and 2010 which were the focus of Mr.
Hayfron-Benjamin’s objection and appeal. This is presumably because the
appropriate withholdings were made by the employers from the amounts paid.
[5]
The subsection 163(1)
penalty is 10% of the unreported amounts even in circumstances where the full
amount is subject to tax withholding and reporting by the employer. See this
Court’s decisions in Dunlop v. The Queen, 2009 TCC 177, Saunders v.
The Queen, 2006 TCC 51, and Mignault v. The Queen, 2011 TCC 500.
[6]
In the years in
question, Mr. Hayfron-Benjamin worked in the information technology IT and call
centre sectors for several different employers. The three employers for which
he has been reassessed and the amounts reported as paid to him as their
employee are also IT/call centre related.
[7]
The three employers
each reported the amounts were paid to Jonathan Hayfron-Benjamin and identified
him by his correct social insurance number. It is the taxpayer’s position that
he never worked for, nor was paid by, any of these three companies and that he
therefore must have been the victim of SIN fraud. Further, he maintains he did
not receive his copies of the T4 or T5 slips in question.
[8]
Having denied that he
worked for, or was paid by, any of these companies, Mr. Hayfron-Benjamin
correctly notes that it is difficult for him to prove the negative and argues
that it should be up to the Crown to prove he did in fact work for and get paid
by these companies.
[9]
The Crown’s evidence is
that each of these companies reported T4 or T5 income to a person having the
taxpayer’s name and social insurance number. In addition, with respect to two
of the employers, Dell and Resolve (now D+H), CRA obtained later written
confirmation and supporting documentation confirming essentially the same
information along with other employee and employment related information. With
respect to Dell, that included the employee’s bank account information into
which the amounts were deposited. CRA had nothing further than the original
T4/T5 information in respect of the third employer corporation. CRA did not ask
for or try to confirm whether amounts were in fact deposited by any of the
three companies into a bank account of this taxpayer. The Crown essentially is
left relying upon the taxpayer’s name and SIN for its decision to add the
reassessed amounts in question to this taxpayer’s income.
[10]
In short, the Crown did
not have anyone who could say that this particular taxpayer – as opposed to
another person using his name and SIN – actually worked at or for, or got paid
by, any of these three companies.
[11]
As I said in Gorfain
v. The Queen, 2013 TCC 136, in circumstances where a taxpayer maintains he
does not know the alleged payor and that they never worked or got paid by them,
it is indeed difficult for a taxpayer to put in much further evidence. Given
the prevalence of identity theft and the loss of personal information including
names, addresses, SINs and other personal information, including by government
departments and agencies, this may have the practical effect of requiring some further
persuasive evidence from the Crown in some such cases. In this case, it would
have been open to CRA to request or demand from the taxpayer or his bank, his
account information to establish payment. It did not make any effort in this
regard.
[12]
In the particular
circumstances of this case, however, I find there are significant concerns with
respect to Mr. Hayfron-Benjamin’s position, evidence and version of events, and
with respect to his overall credibility, that require me to dismiss his
appeals. I do not accept his position that he did not work for or get paid by
these three companies having regard to all of the evidence. Further, Mr.
Hayfron-Benjamin’s credibility is very significantly brought into question
overall by his deceptive and misleading letter to the Court described below.
[13]
I find the taxpayer’s
position difficult to accept for the following reasons:
(i) it would not appear
to make economic sense for a Canadian to use another taxpayer’s name and social
insurance number and identity to earn employment income subject to withholding as
no tax can be avoided and a refund is probably lost;
(ii) the taxpayer reported
his belief that there had been fraudulent use of his SIN to the appropriate
government department. Human Resources and Skills Development Canada
(HRSDC/Service Canada) conducted an investigation and reported that no
fraudulent activity had been identified and refused to issue Mr.
Hayfron-Benjamin a new SIN;
(iii) the taxpayer never
attempted to write or call any of the three companies to try to get to the
bottom of why they would believe he had worked for them - even though he had
made numerous trips to government offices and police stations for his claims to
have been a victim of SIN fraud;
(iv) the taxpayer did not
bring or produce his bank account information, even though he could see from
the documents received from the Crown well before the trial, that Dell had made
direct deposits to an account at his branch of his bank; and
(v) the taxpayer did not
appear to be entirely forthcoming in answering questions put to him by the
Crown. For example, he denied ever living at an address on Hopewell Drive in
Ottawa but, when he was then shown evidence to the contrary, he pointed out it
was Hopewell Avenue, not Drive. Another example was when he said he had never
heard of much less worked for Harris/Decima until he was shown a record of
having worked at Decima Research.
[14]
I do not find the
address issue compelling in this case because the taxpayer lived at such a
number of different addresses in the Ottawa and Halifax areas in the relevant
years that he was not even sure he could name or recognize them all. Further,
he admitted using a relative’s address in another town as his mailing address
for tax purposes on at least one occasion.
[15]
Finally, I find that I
can not accept any of the taxpayer’s testimony as credible given his letter of
June 28, 2012 to this Court. At an earlier adjournment request hearing at which
the taxpayer indicated he was awaiting HRSDC/Service Canada’s report following
the conclusion of its investigation of his report of fraudulent use of his SIN,
he was ordered to communicate with the Court regularly regarding the status of
his report. By letter dated May 10, 2012, he was advised by Service Canada that
the investigation had been conducted, that no fraudulent use had been detected,
and that he would therefore not be issued a new SIN. The taxpayer acknowledged
having received that letter in May. Nonetheless, in June he wrote to this Court
stating that “… Service Canada has not written me yet. Once I receive a report,
I will let you know.”
[16]
That letter to the
Court was misleading, deceitful and possibly contemptible. Mr.
Hayfron-Benjamin’s attempts to explain it away and rationalize it on the basis
that the May letter was signed by a different government officer then the one
that he met with to make his complaint is entirely unacceptable. This leads me
to not be able to accept as credible any of his testimony that is challenged or
contradicted or that is not clearly supported by corroborating evidence.
[17]
For these reasons, the
taxpayer’s appeals are dismissed.
Signed at Ottawa, Canada this 9th day of
July 2013.
"Patrick Boyle"
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