Browatzke v. The Queen, docket 97-1361-IT-I (Informal Procedure)

Date: 19980824

Docket: 97-1361-IT-I

BETWEEN:

IVY BROWATZKE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Beaubier, J.T.C.C.

[1] This appeal pursuant to the Informal Procedure was heard at Edmonton, Alberta on August 13, 1998. The Appellant testified as did Daniel Service, the auditor.

[2] The particulars of the assessment appealed are set out in paragraphs 2 and 5 to 8, inclusive, of the Reply to the Notice of Appeal. They read:

2. He denies that the Appellant was not an employee of Fleming Powerline Construction Ltd (the "Employer") as stated in the second unnumbered paragraph in the Notice of Appeal.

...

5. In computing income for the 1995 Taxation Year, the Appellant did not include employment income in the amount of $10,311.00.

6. In reassessing the Appellant for the 1995 Taxation Year, the Minister of National Revenue (the "Minister") included into income from an office or employment the amount of $10,311.00.

7. In so reassessing the Appellant, the Minister made the following assumptions of fact:

(a) the Appellant was employed by the Employer during the 1995 taxation year;

(b) the Appellant was in receipt of employment income from the Employer as follows:

Date	Gross	UI	CPP	Tax
04-30-95	1,149.20	34.48	23.38	104.93
05-31-95	1,149.20	34.48	23.38	133.87
06-30-95	1,149.20	34.48	23.38	133.87
07-31-95	2,652.00	79.56	63.95	8.49
08-25-95	2,600.00	78.00	63.95	459.45
09-08-95	1,612.00	48.36	35.87	7.77
Totals	10,311.60	309.36	232.51	848.38

B. ISSUES TO BE DECIDED

8. The issues are:

a) whether the appellant was employed by the Employer, and

b) whether the Appellant, by virtue of the Appellant's employment with the Employer, was in receipt of employment income in the amount of $10,311.00.

[3] The essence of the Appellant's evidence is to deny that she was ever employed by the Employer. The Employer was owned by Dennis Fleming with whom she was living common-law. Ms. Browatzke testified that the payments the "Employer" corporation made to her were for Dennis Fleming's share of household expenses while he was living with her. She testified that she had another full time job and that she never worked for the Employer in any capacity.

[4] No withholdings were deducted from the "Employer" cheques she submitted in evidence. These cheques were intermittent and many of them had references on them such as "loan". (Ms. Browatzke testified that Dennis owed her money.) The T-slips the "Employer" issued had the Employer's, not Ms. Browatzke's address (to the attention of Dennis Fleming) for Ms. Browatzke's name. The Court believes Ms. Browatzke.

[5] However, one cheque had endorsed on it "wages" in Ms. Browatzke's hand writing. She testified that she had needed the money, but Dennis would not give it to her unless she agreed that it was wages from the "Employer". So she filled out the cheque and he signed it. Nonetheless, she was never an employee of the "Employer" and no withholdings were deducted. In essence, she testified that her situation at the time forced her to go through the procedure described.

[6] There is no testimony contrary to Ms. Browatzke's allegations that she had no employment duties. She did not do or have any employee duties for the "Employer". The T-slips were not sent to her and no deductions were made. They were false. For all of these reasons, the Court does not find that even this cheque constituted wages to Mr. Browatzke.

[7] On the evidence, all of the money in question constituted a benefit to Dennis Fleming from his corporation for his personal expenditures and the "T" material is fraudulent.

[8] The appeal is allowed. The Appellant is awarded her party and party costs.

Signed at Regina, Saskatchewan this 24th day of August 1998.

"D.W. Beaubier"

J.T.C.C.