The Assistant Chairman:
1 This is the appeal of Lawrence J Barron from income tax assessment in respect of the 1971 taxation year.
2 In November of 1971 the appellant disposed of rental property at a profit on which capital cost allowance had been claimed since 1967. In preparing his 1971 return the appellant sought the assistance of the local District Taxation Office regarding the determination of the tax payable. The Department of National Revenue employee, on information received from the appellant, personally determined the amount of undepreciated capital cost on the appellant's property.
3 The appellant, on the basis of the above calculation, filed his 1971 return in good faith, and on June 26, 1972 received form T453 stating that no balance remained to be paid by him or refunded to him. However, by letter dated November 27, 1973 the appellant was advised that the Department of National Revenue had to add to the appellant's 1971 return the amount of recapture of capital cost allowance of $3,507.78 which he had failed to report. As a result, the appellant was assessed an additional tax of $894.90 and charged interest in the amount of $99.50.
4 The appellant did recognize his liability and in fact paid the $894.90 in additional tax but filed his appeal in respect of the interest charge of $99.50.
5 The appellant's wife, who was representing him, explained that the appeal was not a question of the money involved in the interest charge but a question of principle. Having accepted the Department of National Revenue's highly publicized invitation to taxpayers to consult with the departmental representatives at the local taxation offices for assistance in computing particularly difficult tax problems, the appellant meticulously filed his 1971 return as computed by the Department's representative, and feels that he is now being unjustly charged interest because of an error made at the time by one of the Department of National Revenue's representatives.
6 I can, up to a point, sympathize with the appellant or with any taxpayer who consults the Department of National Revenue's representatives in tax matters believing that such representatives are infallible, or that the Department of National Revenue would automatically disregard the taxpayer's true tax liability and accept as payment the amount that may erroneously have been given the taxpayer as the tax payable by him in a particular taxation year. As I understand it, such consultation by representatives of the Department of National Revenue is merely a service which the Department offers the public to help in filing returns correctly. However, this service can in no way affect the amount of tax really owing and payable by a taxpayer.
7 In my view, and in order to avoid any misunderstanding in the matter, the taxpayers should be advised and made well aware of the long-standing principle that the Minister of National Revenue is not bound by any errors or faulty advice inadvertently given to a taxpayer in respect of his tax liability by a representative of the Department of National Revenue. The role of the Minister of National Revenue is to collect the tax payable in accordance with the Income Tax Act passed by the Government of Canada, and the liability for tax as set out in that Act is the responsibility of the taxpayer and of no one else. Because the Minister is dealing with the public's money, and because it is only equitable that all tax payable be collected by him, he may, within the limits set down in the Act, assess or reassess at any time he feels that tax payable by a taxpayer has not been fully paid.
8 Regardless of what calculations were made by the representative of the Department of National Revenue or what advice he may have been given, the appellant was legally and personally liable for the full amount of tax payable in the 1971 taxation year and that amount of tax payable, pursuant to the Income Tax Act, included the amount of $894.90 which the appellant, himself, now admits was payable in 1971.
9 Since the amount of tax paid by the appellant in 1971 was, in fact, less than the amount of tax payable by him in that year, subsection 54(1) of the Income Tax Act which imposes an interest charge on the unpaid portion of the tax payable, must apply.
10 I have, therefore, no alternative but to dismiss the appeal.
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