Date: 19981124
Docket: 97-3372(IT)I
BETWEEN:
EVE BIJAI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Somers, D.J.T.C.C.
[1] This is an appeal pursuant to the
informal procedure for the 1995 taxation year. The issue is
whether the Appellant is entitled to deduct expenses for child
care within the meaning of subsections 63(1) and 63(3) of the
Income Tax Act (the "Act").
[2] In reassessing the Appellant the
Minister of National Revenue (the "Minister") made the
following assumptions of fact, which were denied by the
Appellant:
"(a) the Appellant
did not file prescribed form T778(E), with her return of income
for the 1995 taxation year;
(b) the Social
Insurance Number of the alleged caregiver subsequently provided
by the Appellant to Revenue Canada is invalid;
(c) the Appellant
did not incur child care expenses in the amount of $4,800 (the
"Payments") in the 1995 taxation year;
(d) the Appellant
has not proven the alleged Payments as, or on account of, child
care expenses by filing with the Minister one or more receipts,
each of which was issued by the payee and contains, where the
payee is an individual, that individual's Social Insurance
Number."
[3] In the year 1995, the Appellant
had three children: Shan Bijai born September 11, 1987, Ricky
Bijai born August 11, 1991 and Alisha Bijai born December 17,
1993. Since the Appellant worked for two different companies
during the 1995 taxation year she had to hire babysitters. She
worked full time for Kathgo Trading Company Inc.; her working
hours were from 9:00 a.m. to 5:00 p.m., five days a week.
She also worked part time for two other companies at different
periods during the year; her working hours were then
flexible.
[4] The Appellant hired Sandra Reid,
45 years old, as a babysitter paying her $720 per week. Sandra
Reid who lived across the street from the Appellant babysat at
the Appellant's home from 6:30 a.m. to 1:00 p.m. from January
1995 to November 1995.
[5] The Appellant did not request
receipts from Sandra Reid nor did she keep records of her working
hours while taking care of the children.
[6] Sandra Reid moved to some other
area in October 1995 and the Appellant does not know where she
lives and made no attempt to locate her. The Appellant was unable
to give a valid social insurance number for Sandra Reid as the
one provided was not valid.
[7] When Sandra Reid moved, the
Appellant hired a student to babysit from 3:30 p.m. to 7:00 p.m.
from October 1995 to December 1995. During that period, the
student lived two streets from the Appellant. No receipt was
obtained by the Appellant to prove the hours worked and no
attempt was made to contact the student to obtain receipts. She
did not consider it worth while since there was only a small
amount involved.
[8] Agent for the Respondent advises
that there are three deficiencies to the Appellant's appeal.
A prescribed form for calculating child care expense deductions
was not filed with Revenue Canada as requested. However, the form
was produced in Court. The Respondent objected to the production
of the form as being too late. In accordance with subsection
63(1) of the Act, there is no indication that the form
should be produced in a certain period of time.
[9] Secondly, receipts were not
produced to Revenue Canada or this Court. In the case of
Y. Senger-Hammond v. Her Majesty the Queen, [1997]
1 C.T.C. 2728, Bowman J.T.C.C. states:
"The essence of section 63 is the deduction of child care
expenses, not the collection of tax from babysitters. The
language of the provision does not support the view that the
filing of receipts is mandatory. For one thing, the word
"shall" is not used. Rather it describes a method of
proof, which is clearly formal, evidentiary and
procedural."
I accept this reasoning that nothing in the section makes it
mandatory to file receipts in support of the deductions. While it
is not mandatory the Appellant must prove her claim. It appears
from the T4 slips provided by her employers that the Appellant
worked during the 1995 taxation year. It is reasonable to
conclude that she needed a babysitter.
[10] In a letter dated October 30, 1996,
Revenue Canada requested receipts to support her claim and also
to provide the babysitter's social insurance number. The
Appellant provided an invalid number and did not produce
receipts. Even though the production of the social insurance
number and receipts is not mandatory, the Appellant has a certain
obligation to prove her claim. She made no attempt to locate the
babysitter. She stated that she did not attempt to speak to the
student to provide receipts because the amount was
insignificant.
[11] In the case of Edward Wells v. Her
Majesty the Queen, [1997], 3 C.T.C. 2581, Rip
J.T.C.C. said:
"There is nothing in the evidence before me to suggest
Mrs. Wells did not do what a reasonable person in similar
circumstances would have done when she obtained the social
insurance number. If the social insurance number that was given
to Mrs. Wells was not correct, and as Mrs. Wells used her best
efforts to obtain the number, Mr. Wells should not be
prejudiced."
[12] In this appeal, the Appellant made no
attempt to correct the deficiencies in supplying the receipts and
valid social insurance numbers. While the requirements of section
63 of the act are not mandatory, the Appellant must
present sufficient evidence to prove her claim. The legislation
is enacted to be respected and not disregarded. If the Appellant
had made a reasonable effort to meet the requirements of the
Act, her claim in certain circumstances would have been
accepted.
[13] In the case of Lucy Wanjiru Njenga
and The Minister of National Revenue [1997] 2 C.T.C. 8, 96
DTC 6593, the Federal Court of Appeal stated the following:
"The income tax system is based on self monitoring. As a
public policy matter the burden of proof of deductions and claims
properly rests with the taxpayer. The Tax Court Judge held that
persons such as the Appellant must maintain and have available
detailed information and documentation in support of the claims
they make. We agree with that finding. Ms. Njenga as the Taxpayer
is responsible for documenting her own personal affairs in a
reasonable manner."
[14] For the reasons given above, the
Appellant did not prove the necessary documentation of her claim.
The burden of proof is on the Appellant. Furthermore, the
Appellant did not make a reasonable attempt to provide such
information.
[15] The appeal is dismissed.
Signed at Ottawa, Canada, this 24th day of November 1998.
D.J.T.C.C.
COURT FILE
NO.:
97-3372(IT)I
STYLE OF
CAUSE:
Eve Bijai and H.M.Q.
PLACE OF
HEARING:
Toronto, Ontario
DATE OF
HEARING:
October 19, 1998
REASONS FOR JUDGMENT BY: The Honourable
Deputy Judge J. Somers
DATE OF
JUDGMENT:
November 24, 1998
APPEARANCES:
For the
Appellant:
The Appellant herself
Agent for the
Respondent: J.
Espeso (student at law)
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
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