Fallon v. R., [1999] 3 CTC 2050 (Informal Procedure)

Beaubier T.C.J. .

This appeal pursuant to the Informal Procedure was heard at St. John’s, Newfoundland on May 14, 1999. The Appellant was the only witness.

She has appealed the disallowance of her claims for expenses in 1994 and 1995. In those years she was a car saleswoman working solely on commission for Royal Garage Ltd. (“Royal”). For a total of eight months through both 1994 and 1995, Royal’s premises were picketed and Ms. Fallon had to meet her prospects and customers off the premises at restaurants and elsewhere in order to conduct her sales. In addition, much of her business was done with customers outside of St. John’s. As a result, she often paid others to deliver sold vehicles to customers.

The assumptions in the Reply to the Notice of Appeal are true. They read:

8. In so assessing the 1994 and 1995 taxation years, the Minister made, inter alia, the following assumption of facts:

a) the Appellant was employed as an automobile salesperson during 1994 and 1995;

b) the Appellant claimed employment expenses according to statements of Employment Expenses filed with her returns as shown on Appendix A attached and later revised those expenses to amounts indicated on Appendix A attached;

c) The Appellant did not provide receipts to verify any of the amounts claimed but she did supply a list of her clients and a list of the clients to whom she said she loaned her vehicle together with a list of expenses she represented as relating to advertising and promotion;

d) The Minister allowed $305.00 in the 1994 taxation year and $290.00 in the 1995 taxation year as reasonable expenses for Christmas and business cards;

At the hearing the Appellant testified that she has lost any receipts that she had. However, she testified that she kept a “log” on her desk at her employer’s premises respecting her expenses and she filed copies of it as Exhibits A-l and A-2 for 1994 and 1995 respectively.

In both income tax returns she claimed large expenses, the details of which were challenged. She then filed revised expenses which totalled the same amounts - $5,758.30 in 1994 and $4,622.67 in 1995.

The Appellant’s logs offer very little detail. But they do describe various amounts and the names and, sometimes, the telephone numbers of the recipients of, in essence, finder’s fees or lunches. The amounts total

These amounts are allowed for each year.

She was also charged “demo charges” by the dealer for the vehicles. These are allowed as charged.

She is also allowed a salesperson bond fee detailed in her second set of expenses:

There is no evidence to verify other amounts which she claimed, many of which could be personal. Her “advertising and promotion” and “motor vehicle” expenses claimed in her revised claims appear, from her testimony, to be susceptible to duplication.

For this reason she is allowed the expense amounts as detailed which total the following in each year:

The “lunches and coffee” are subject to the appropriate adjustments pursuant to the Income Tax Act in each year.

These amounts are allowed in addition to the amounts described in subparagraph 8(d) of the assumptions.

These matters are referred to the Minister of National Revenue for reconsideration and reassessment in accordance with these reasons.

Appeal allowed in part.