Date: 20020430
Docket: 2001-3676-IT-I
BETWEEN:
WAYNE BARCLAY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor
Judgment
Beaubier, J.T.C.C.
[1]
This appeal pursuant to the Informal Procedure was heard at
Kelowna, British Columbia on April 12, 2002. The Appellant
was the only witness.
[2]
Paragraphs 2 to 9 inclusive of the Reply set out the matters at
issue. The read:
2.
The Minister of National Revenue (the "Minister")
initially assessed the Appellant for the 1996 and 1997 years
by Notices dated May 27, 1997 and May 4, 1998,
respectively.
3.
In computing income for the 1996 and 1997 taxation years, the
Appellant reported net business income from
Quik X Transportation Inc. ("Quik X"),
of $24,857.00 and $23,709.00 respectively.
4.
The Minister subsequently reassessed the Appellant to disallow
expenses claimed against business income in the amounts of
$23,410.00 and $9,508.00 for 1996 and 1997 respectively (the
"Expenses"), on the basis that he was an employee of
Quick X.
5.
In so reassessing the Appellant, the Minister relied on the
following assumptions:
a)
the Appellant was an employee of Quik X in 1996 and 1997 and
he had no business source of income relating to Quik X in
these years;
b)
the Appellant was employed in connection with the negotiating of
contracts for Quik X and was remunerated in whole or in part
by commissions or other similar amounts;
c)
under his contract of employment with Quik X the Appellant
was not required to pay his own expenses;
d)
the Appellant was not ordinarily required to carry on the duties
of his employment away from Quik X's place of
business;
e)
most of the Appellants' duties were performed at
Quik X's place of business;
f)
the Appellant's home was not a place where he principally
performed his duties of employment with Quik X; and
g)
the Appellant's home was not used on a regular and continuous
basis for meeting customers or other persons in the ordinary
course of performing his duties of the employment with
Quik X.
B.
ISSUES TO BE DECIDED
6.
The issue is whether the Appellant is entitled to deduct the
Expenses in 1996 and 1997.
C.
STATUTORY PROVISIONS RELIED ON
7.
He relies on sections 4, 9 and 18 and paragraphs 8(1)(f) and
8(13)(a) of the Income Tax Act, R.S.C. 1985, c. 1 (5th
Supp.), as amended (the "Act").
D.
GROUNDS RELIED ON AND RELIEF SOUGHT
8.
He submits that the Appellant was employed by Quik X as an
employee in 1996 and 1997, and did not have a business source of
income relating to Quik X in those years. Therefore, he is
not entitled to deduct the Expenses as deductions from business
income.
9.
He further submits that the Appellant is not entitled to deduct
the Expenses as deductions from his employment income from
Quik X as his contract of employment did not meet the
conditions necessary for deduction as required by
subparagraphs 8(1)(f)(i) and (ii) and paragraph
8(13)(a).
[3]
Assumptions 5 a), b) and e) are correct respecting Quik X.
The Appellant was a brokerage salesman contacting shippers to
ship loads and truckers to haul loads. He was not provided any
expenses and was paid $500 per week plus a percentage of the
business done by Quik X for 1996 and until March 31, 1997
when he left Quik X. All of the assumptions and the cross
examination relate to Quik X. Respecting the remaining
assumptions; in order: c) the Appellant needed his own car for
contact purposes and bought gifts and meals for some customers;
d) the Appellant was ordinarily required to carry on the duties
of his employment away from his place of business, although not
all of the time - most of the time he worked by phone out of
Quik X's office; e) the Appellant did after hours work
regularly and ordinarily throughout the week away from the office
and was 24 hour duty every third weekend from his home; f)
is true, but he ordinarily performed various duties of work at
and from his home in the nature of the job; and g) is true
insofar as meeting customers is concerned, however the great
majority of customer contact was by phone or by the Appellant
travelling in his car to meet customers.
[4]
Thus for 1996 and until March 31, 1997, the Appellant was an
employee of Quik X. The Appellant followed Quik X's
instructions in filing his income tax return. When he was
reassessed he filed a form T-2200 for all of 1996 and for
January to March 31, 1997 duly signed by an authorized person of
Quik X (Exhibit A-1). Based upon the evidence in Court,
these T-2200's are correct and for those times, the
Appellant is to be assessed in accordance with the contents of
those T-2200's for those two periods.
[5]
With respect to the period April 1 to December 31, 1997, the
assumptions, which relate to Quik X, do not apply since the
Appellant was no longer with Quik X. The Appellant testified
that he was a contractor from April 1 to December 31, 1997 and
his accountant filed an amended statement of business activity
and expenses for that period (Exhibit R-4). The appeal is allowed
for that period on the basis that the Appellant is entitled to
deduct business expenses claimed pursuant to Exhibit R-4.
Signed at Saskatoon, Saskatchewan, this 30th day of April,
2002.
"D. W. Beaubier"
J.T.C.C.
COURT FILE
NO.:
2001-3676(IT)I
STYLE OF
CAUSE:
Wayne Barclay v. The Queen
PLACE OF
HEARING:
Kelowna, British Columbia
DATE OF
HEARING:
April 12, 2002
REASONS FOR JUDGMENT BY: The
Honourable Judge D. W. Beaubier
DATE OF
JUDGMENT:
April 30, 2002
APPEARANCES:
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Michael Taylor
COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
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