Date:
20020903
Docket:
2001-4532-IT-I
BETWEEN:
ISABELLE
WONG,
Appellant,
and
HER MAJESTY
THE QUEEN,
Respondent.
Reasons
for Judgment
O'Connor, J.T.C.C.
[1]
The following extracts from the Reply to the Notice of Appeal set
forth the basic facts:
4.
In computing income for the 1995 taxation year, the Appellant
claimed a loss from commission income in the amount of
$15,239.37...
...
6.
The Minister assessed the Appellant for the 1995 and 1998
taxation years, Notices of Assessment thereof mailed on May
24, 1996 and July 19, 1999, respectively.
7.
In assessing the Appellant for the 1995 taxation year, the
Minister disallowed expenses with respect to the real estate
commission in the amount of $15,239.37...
...
9.
Subsequently, the Appellant served Notices of Objection for the
1995 and 1998 taxation years. After careful consideration, the
Minister issued a Notification of Confirmation dated
September 28, 2001 for the 1995 and 1998 taxation
years.
10.
In so assessing the Appellant, the Minister made the following
assumptions of fact:
(a)
in the 1995 taxation year, the Appellant reported gross income of
$Nil from which she claimed expenses of $15,239.37, resulting in
a loss of $15,239.37 from a purported business of being a
self-employed real estate agent (the
"Business");
(b)
the Appellant held herself out to be variously, an associate
broker with Home Life New World Realty ("Home Life"),
or an independent broker;
(c)
...
(d)
...
(e)
the Appellant failed to provide any listing agreements or
contracts to support her claim that she was a real estate
agent;
(f)
the Appellant failed to provide any travel logs or diaries to
support her claims for expenses related to the
Business;
(g)
the receipts and documents submitted by the Appellant in support
of her claims for expenses were fragmentary, included personal
expenditures and included receipts in the name of another person,
or persons;
(h)
in the 1995 taxation year, the Appellant incurred expenses for
the operation of the Business in the amount of $Nil;
(i)
in the 1995 taxation year, the expenses disallowed were not
incurred for the purpose of gaining or producing income from a
business or property, but were personal or living expenses of the
Appellant;
(j)
in the 1995 taxation year, the expenses were not made or
incurred, or if made or incurred, were not made or incurred for
the purpose of gaining or producing income from a business or
property;
(k)
in the 1995 taxation year, the Appellant had Canada Pension Plan
benefits, Unemployment Insurance benefits, taxable dividends,
interest income, taxable capital gains, other income and rental
losses of $4,561.80, $985.00, $112.00, $12,758.13, $160.00 and
($26,655.00), respectively, resulting in total income/ (loss) of
($8,078.07);
(l)
in the 1995 taxation year, the Appellant had carrying charges and
interest expenses and other deductions of $2,252.43 and $0.18,
respectively, resulting in net income of ($10,330.68);
...
...
...
...
...
[2]
There are also references in the Reply to the Notice of Appeal of
capital losses from various years but it was agreed at trial that
the only issue was the real estate expenses claimed. It was also
conceded by counsel for the Respondent that indeed the Appellant
was registered as a broker although there are references in the
Reply to this not being the case.
[3]
Without reviewing the evidence in the greatest of detail it is
clear from the testimony and evidence produced that the Appellant
had extremely inadequate books and records and receipts. The
receipts which were furnished appear to relate to personal items.
The Appellant tried to explain that some items of food were
bought so that she could make meals at home for prospective
clients. She also indicated some of the items although appearing
personal, were actually gifts for clients.
[4]
The major difficulty which the Appellant faces is that throughout
the years 1994 to 1998 there were losses and in only year, namely
1997, there was an amount of gross real estate income of only
$71.00. It is extremely difficult, with numbers of this nature,
to concede that the Appellant was carrying on a bona fide
real estate business. It is also to be noted that the Appellant
had in the 1995 year various sources of income including as set
forth in paragraph 10(k) of the Reply and she was able to
eventually produce a net loss as a result of using rental losses
and the real estate commission losses and interest
expenses.
[5]
The Appellant blames the lack of books, records and receipts
principally on the fact that the Minister didn't get around
to reassessing until 1999 and by then she had either lost her
receipts or could not produce them for some reason. This is an
inconvenience for taxpayers but taxpayers must keep all necessary
papers until the time to reassess them has passed. The burden of
proof of losses rests with the Appellant and has not been
discharged. Consequently, this is no excuse for the
Appellant.
[6]
For all of the above reasons the appeal is dismissed.
Signed at
Ottawa, Canada, this 16th day of September,
2002.
J.T.C.C.COURT
FILE
NO.:
2001-4532(IT)I
STYLE OF
CAUSE:
Isabelle Wong v. The Queen
PLACE OF
HEARING:
Toronto, Ontario
DATE OF
HEARING:
August 14, 2002
REASONS FOR
JUDGMENT
BY:
The Honourable Judge O'Connor
DATE OF
JUDGMENT:
September 16, 2002
APPEARANCES:
Agent for
the
Appellant:
Fred
Yeung
Counsel for
the
Respondent:
Joel Oliphant
COUNSEL OF
RECORD:
Agent for
the Appellant:
Name:
Fred
Yeung
Firm:
Kei & Yeung Accountants
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-4532(IT)I
BETWEEN:
ISABELLE
WONG,
Appellant,
and
HER MAJESTY
THE QUEEN,
Respondent.
Appeal heard
on August 14, 2002 at Toronto, Ontario, by
the
Honourable Judge Terrence O'Connor
Appearances
Agent for
the
Appellant:
Fred Yeung
Counsel for
the
Respondent:
Joel Oliphant
JUDGMENT
The appeal from the assessment made under the Income Tax
Act for the 1995 taxation year is dismissed for the reasons set
forth in the attached Reasons for Judgment.
Signed at
Ottawa, Canada, this 16th day of September, 2002.
J.T.C.C.
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