Alexander Josifovic v. Her Majesty the Queen (Informal Procedure), [1993] 2 CTC 2286

Sarchuk, T.C.C.J. (orally):— This is an appeal by Alexander Josifovic (Josifovic) from an assessment of tax for his 1989 taxation year. Josifovic has elected in his notice of appeal to have the provisions of sections 18.1 to 18.28 apply.

In computing income for the 1989 taxation year the appellant filed an income tax return and declared a total income of $9,853.14. In reassessing the Minister of National Revenue increased the appellant's total income by including unreported employment earnings in the amount of $2,033.60. In so reassessing the appellant the Minister made certain assumptions of fact. These assumptions are found in paragraph 4(a) to (e) of the Minister's reply and I incorporate them into my reasons for judgment:

(a) during 1989 the appellant was employed by Bywin Management Inc., also known as Bywin Management 90 (” Bywin");

(b) during the 1989 taxation year the appellant received the amount of $1,533.60 from Bywin;

(c) in the 1989 taxation year Bywin conferred a benefit for the use of an apartment with a value of $500 on the appellant in the capacity of an employee (the "benefit") ;

(d) Bywin prepared a T4 slip for the appellant for the amount of $2,033, which showed a deduction of $168.64 for income tax deducted, Canada Pension Plan contributions of $25.18, and Unemployment Insurance Commission contributions of $39.64;

(e) in computing income for the 1989 taxation year the appellant did not include in income the amount of $2,033 from Bywin.

The issue in this case is whether the amount of $2,033 received by the appellant is to be included in his income.

Mr. Josifovic states that his appeal against the assessment should be allowed because it is based on a T4 slip with respect to the 1989 taxation year provided by his former employer, Bywin Management 90 Inc., which the appellant says is not only wrong but is a fabrication. He asserts that in April of 1989 when he was given his copy of the 1988 T4 slip by Bywin he was told that it included, in addition to his 1988 earnings, the amounts that he had been paid for the short period of time that he had been employed by Bywin in 1989. The appellant further states that Bywin never provided him with a T4 slip for 1989.

Ultimately, in December 1991, the 1989 taxation year was reassessed by the Minister and the appellant says it was at this stage that he first became aware of the 1989 T4 slip which, as I stated earlier, he describes as incorrect and falsified. The appellant objected and when the assessment was confirmed appealed to this Court.

In his testimony he maintained that all moneys earned from his employment with Bywin both in 1988 and 1989 were included in the 1988 T4 slip. He produced his 1988 tax return, Exhibit A-4, which discloses income earned from several employers including the amount of $5,595 representing wages from Bywin. As well it discloses the existence of a housing benefit received from Bywin. He then produced seven cheques from Bywin, the earliest dated October 21, 1988 and the last, December 30, 1988 (Exhibit A-2). He agrees that these amounts represent the total paid to him by Bywin in 1988. Three cheques dated January 13, January 27 and January 27, 1989 were also filed by the appellant and are Exhibit A-1. These cheques represent, as the appellant stated, the wages paid to him by Bywin in 1989 to the date of the termination of his employment.

The appellant does not dispute that in addition to the wages he received he was entitled to the use of an apartment with a value of $500 per month. Regarding this benefit there was some testimony from the appellant as to the date upon which he commenced working for Bywin as a building supervisor and became entitled as a result thereof to the use of the apartment. I conclude that his employment commenced on or about the beginning of October 1988. In this context I make specific reference to pages 1 and 2 of Exhibit A-2, a photocopy of the first dated of the seven cheques for 1988. In fact this cheque bears the date October 21, 1988. The back of the cheque bears notations indicating that the gross pay of $900 was for a three week period. From this I conclude that in all probability he commenced his employment at the beginning of October and became entitled to the apartment as of that date. In essence that is the evidence presented by the appellant.

I have considered what the appellant has said and have reviewed the documents provided. It may well be that he did not receive a 1989 T4 slip from Bywin and indeed he left its employ almost a year prior to the time when the T4 slip would normally be provided to an employee. As well, he appears to honestly believe that he was the victim of a devious plan concocted by Bywin to defraud him. However, the documents he produced and invited me to inspect simply do not support his position regarding the validity of the Minister's assessment.

The appellant specifically invited the Court to total the amounts paid to him as shown in the ten cheques in Exhibits A-1 and A-2. That is all of the money that he received from Bywin in 1988 and 1989. He contends this simple exercise would demonstrate the correctness of his assertion that all the amounts paid to him were included by Bywin in his 1988 T4 slip. I accepted his invitation and my review of the material shows the following: Exhibit A-4, the T4 slip prepared by Bywin for the 1988 taxation year shows total income of $5,595 which includes the benefit of $1,500. I then examined Exhibit A-2, the seven cheques issued to him in 1988 by Bywin. The face of each cheque shows the net amount paid to the appellant, while the back of the cheque discloses the gross pay and the payor's calculations which produced the net amount. I have taken the gross pay shown on each cheque; these amounts are:

The above amounts to $4,095. The apartment benefit for three months at $500 per month is $1,500, producing a grand total of $5,595. That is the exact amount reported on the T4 slip provided by Bywin for the taxation year 1988.

For 1989 I totalled the amounts shown on the three cheques found in Exhibit A-1 and again I refer to the gross pay:

With reference to the larger January 27 cheque there is a typographical error with respect to the gross pay. The amount of $660 has been conceded by the appellant to be correct. The cheque for January 27 in the smaller amount is described as vacation pay. The total of the three is $1,533.60. Adding to that a benefit of $500 for the use of the apartment for the month of January produces a grand total of $2,033.60. Again this is the exact amount recorded on the T4 slip for 1989 provided by Bywin to Revenue Canada. I note that this is the T4 slip which the appellant maintains he had never seen prior to the assessment.

Bearing in mind that the appellant does not dispute the fact that he was paid these amounts in 1988 and 1989, as shown on the two tests of cheques, it is simply not possible to accept the propositions that he has put before the court and it is apparent that the appeal cannot succeed. Therefore, Mr. Josifovic's appeal, for the taxation year 1989 is dismissed.

Appeal dismissed.