Rosalind Binda v. Her Majesty the Queen, [1995] 1 CTC 2119

Teskey, J.T.C.C.:—The appellant appeals her assessments of income tax for the years 1989, 1990 and 1991 and has elected to have her appeals heard pursuant to the informal procedure.

Issue

The Minister of National Revenue (the "Minister") in so assessing the appellant’s tax returns disallowed her claim for child care expenses.

Facts

The Minister in so disallowing the claimed child care expenses assumed certain facts which were reproduced in paragraph 5 of the reply to the notice of appeal. Paragraph 5 reads as follows:

(a) the amounts claimed by the appellant were not expended by her on account of child care expenses in the 1989, 1990 and 1991 taxation years;

(b) an invalid social insurance number was provided for Janette Smith, one of the alleged baby sitters to whom the appellant purportedly paid the amount of $6,000 on account of child care expenses in the 1989 taxation year;

(c) the recipient’s name appearing on receipts provided by the appellant to substantiate her claim for child care expenses in the 1989 taxation year does not correspond to the name of the individual to whom such alleged payments were made in the year as per form T778(E) "Calculation of Child Care Expense Deduction" submitted by the appellant at the time of filing her 1989 TI return;

(d) the social insurance number provided for Margaret Jones, to whom the appellant purportedly paid the amount of $4,000 on account of child care expenses in the 1990 taxation year, was found to have been issued to another individual not living in the Toronto area during the year.

The appellant gave evidence on her own behalf and the respondent called two witnesses; namely, the husband of the appellant and Joseph Madio, an appeals’ officer with Revenue Canada. The evidence shows that in her T1 tax return for 1989 she completed the T778(E) form for child care expenses claiming that there had been child care expenses paid in the amount of $6,000 to a Mrs. Janette Smith. At trial, she produced 12 purported receipts of $480, one for each month of the year, from a Dianne Garrett, making a total of $480 x 12 $5,760. The address on the return for the child care giver was her own home address.

The appellant in her 1990 TI tax return claimed child care was provided by a M. Jones of Scarborough. At trial, she produced 12 purported receipts of $330, one for each month of the year. Her T778(E) form shows again the appellant’s personal residence as the residence of the child care giver. She claimed expenses of $4,000. The total of the receipts is $330 x 12 = $3,960.

Her T778(E) form attached to her 1991 T1 tax return shows the child care giver as a Peama Beharry and with a different address than her own. Again, $4,000 was claimed as expenses in her tax return and at trial she produced 12 receipts each of $330, one for each month totalling again $3,960. The appellant in her testimony stated that the first two providers of the child care lived right around the corner from her house but the third one was a long walking distance away from their residence so they drove to it.

In each year the purported payment was identical for each month. The appellant’s children were born in 1982 and 1983. Throughout the three years in question, both children attended a public school. These child care givers were to provide, during the school year, a place for the children to go to at 3:30 p.m. when school was out until they were picked up by the parents between 5:30 p.m. and 6:00 p.m. The appellant claimed that she paid each child care giver cash each month and never by cheque. She made all the payments. She always brought and picked up the children and her husband never had anything to do with it.

In the summertime, the children were taken to the child care giver in the morning on the way to work and the child care giver looked after the children all day long from shortly after 8:00 a.m. to 5:30 p.m., supposedly for the same remuneration for nine and a half hours of supervision a day as opposed to three hours of supervision a day during the school year.

The husband’s testimony disputed the wife’s testimony to a certain extent. He said that although the majority of the dropping or picking up of the children was done by the wife, he certainly did his share on occasion and in regards to the third child care giver, her house was just around the corner within a short walking distance.

Revenue Canada contacted the appellant on March 9, 1992 by letter requesting additional documentation. The additional documentation required was cancelled cheques to support the payments claimed and/or receipts and the social insurance numbers of the child care givers. The appellant was given 30 days in which to supply this information and was advised that if the information was not supplied, the deduction would not be allowed. Only the names and the social insurance numbers of the alleged child care givers were produced and the social insurance numbers proved to be fictitious. She did not produce the purported receipts that she produced at trial.

In reviewing all the evidence before me, and in particular the conflict between the husband’s testimony and the appellant’s and the fact that she did not immediately give to Revenue Canada the receipts produced at trial, the appellant has not convinced me that in fact the money was paid. The appellant and her husband have responsible jobs, earning good wages and I cannot believe that they would not pay these child care givers by cheque at least on one or two occasions over a 36 month period. I believe she has falsely made these claims for child care expenses as I do not believe these payments were ever made as alleged.

The appeals are dismissed.

Appeals dismissed