Docket: 2007-2549(IT)I
BETWEEN:
BEATRICE OSEI‑TUTU,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on March 8, 2010, at Edmonton, Alberta.
Before: The Honourable
Justice Patrick Boyle
Appearances:
|
Agent for the appellant:
|
Samuel Amponsah
|
|
Counsel for the respondent:
|
Gregory Perlinski
|
____________________________________________________________________
JUDGMENT
Upon motion made by counsel for the respondent for a
judgment quashing the appeals from the assessments and determinations made under the Income Tax
Act with respect to the appellant’s 1999, 2000, 2001 and 2002 taxation
years;
And upon hearing submissions of the parties;
The respondent’s
motion is granted and the purported appeals are quashed.
The
appeal from the reassessment and determination made under the Income Tax Act
with respect to the
appellant’s 2003 taxation year is allowed,
and the matter is referred back to the Minister of National Revenue for
reassessment and redetermination in accordance with the Reasons for Judgment attached hereto.
Costs in the amount of $250 shall be
payable by the respondent in favour of the appellant.
It is further ordered that the filing fee in the amount
of $100 be reimbursed to the appellant.
Signed at Ottawa, Canada, this 12th day of April 2010.
"Patrick Boyle"
Citation: 2010 TCC 185
Date: 20100412
Docket: 2007-2549(IT)I
BETWEEN:
BEATRICE OSEI‑TUTU,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
EDITED VERSION OF TRANSCRIPT
OF REASONS FOR JUDGMENT
[delivered
orally from the Bench at Edmonton,
Alberta, on March 8, 2010]
Boyle J.
[1]
These are my reasons
for decision in the Osei‑Tutu motion heard this morning and in the
matter, as it turns out.
[2]
The appellant,
Ms. Osei‑Tutu, has appealed her 1999 to 2003 years on the basis that
in those years she was living common-law with Mr. Amponsah. She claims she
is entitled to claim a common-law spousal credit in respect of Mr. Amponsah
for income tax purposes and that it also affects the amounts she should have received
as GST credits and as Child Tax Benefits.
[3]
The 2003 appeal has
been fully resolved this morning. The Crown conceded that the 2003 GST credit
needs to be redetermined with respect to Ms. Osei‑Tutu and the
children of the marriage. The Crown also conceded that the 2003 GST credit
needs to be redetermined with respect to Mr. Amponsah for any periods for
which he has not yet received the credit. I will be ordering that those redeterminations
are to be made. Mr. Amponsah, representing Ms. Osei‑Tutu, confirmed
that, for 2003, the common‑law spousal credit has been given to
Ms. Osei‑Tutu, and that it and the 2003 Child Tax Benefits are no
longer in dispute.
[4]
The Crown has brought a
motion to strike Ms. Osei‑Tutu’s appeals for 1999 to 2002 on the
ground that they have not been validly instituted. The Income Tax Act
only gives this Court power to hear appeals from the Minister’s decision to
objections: see section 169. However, in this case the taxpayer never
filed valid objections to the 1999 to 2002 taxation years, since they were
filed beyond the maximum time permitted by section 165.
[5]
Ms. Osei‑Tutu
asked the Canada Revenue Agency (the “CRA”) to make an adjustment to her 1999
to 2002 tax assessments to reflect her common‑law relationship with
Mr. Amponsah in January 2006. She appears to have used the appropriate
CRA T1 Adjustment form. I understand she had initially claimed a spousal tax credit
in respect of her former spouse for the years 1999 to 2001, which were
initially permitted but were denied in reassessments of 1999 and 2000, in October 2002,
and in a reassessment of 2001, in January 2003. It appears that her 2002
return was never reassessed nor objected to because in that year she had
claimed an equivalent to married credit.
[6]
By a one‑page
letter dated March 1, 2006, the CRA responded that it could not update
her marital status for prior years because the information she provided with her
request conflicted with the information previously provided.
[7]
Ms. Osei‑Tutu
then filed the objections, which are the subject of her appeal to this Court. These
objections are dated March 7, 2006.
[8]
The CRA responded to these
objections with a brief letter that pointed out that only her 2003 objection
was a validly filed objection and allowing her common‑law spousal credit for
2003.
[9]
The CRA’s
October 19, 2006, letter went on to confirm that it will update its records
to reflect her common‑law spousal relationship with Mr. Amponsah
since 1999. It then continued that this change may result in future changes to
her returns or GST or CTB benefits.
[10]
Ms. Osei Tutu
replied to that letter with a phone call and an attestation signed by each of
her and Mr. Amponsah confirming they had been in a common‑law
relationship for each of 1999 to 2003. This was dated November 14, 2006
and was faxed
to the CRA.
[11]
In response to Ms. Osei‑Tutu’s
further reply, the CRA sent her a one‑page letter, the material paragraph
of which reads:
“Based on your reply of November 15, 2006, we are closing
your file on the basis that you now agree with the assessment. We have changed
your marital status for the years 1999 to 2003 from single or married to common‑law
as per your request. We hereby confirm the assessment as correct under
subsection 165(3) of the Income Tax Act.”
[12]
It troubles me greatly
that in the face of this letter the CRA would continue to pursue the motion to
quash or the appeals themselves. There is no other way for a typical Canadian
to read this letter than that the adjustments were being made for 1999 and
later years, as she had requested. Crown counsel described the middle sentence
of this paragraph as mind‑boggling. I agree.
[13]
While it is possible
for a specialist well‑versed in income tax rules and procedures to read
into the three sentences read together what the writer may have intended and
conclude it was just poorly written, there was no way Ms. Osei‑Tutu
or any other reasonably intelligent Canadian could read it any other way than
she appears to have. She had finally succeeded.
[14]
The CRA is satisfied
that Mr. Amponsah was Ms. Osei‑Tutu’s common‑law spouse since
1999. The CRA has the statutory power in subsection 152(4.2) to reassess
her 1999 and later years to reflect that; the CRA is refusing to do that. Unfortunately
this Court has no power to order the CRA to make such reassessments. The
Federal Court does have that power.
[15]
Since that
November 2006 letter, Ms. Osei‑Tutu has continued to pursue her
appeal in this Court. Given the wording of the final letter, she no doubt
reasonably expected this Court would be able to resolve what she must have
guessed was a communication or other technical glitch. Indeed the letter only
tells her of her appeal right to this Court. It does not tell her that if she
disagrees with how the CRA exercised its discretion, she should begin an appeal
in the Federal Court.
[16]
No explanation has been
given to her or to this Court as to why the CRA has not made the requested
adjustments, given it is satisfied of the facts of Ms. Osei‑Tutu’s
common‑law relationship since 1999 and it has the power under
subsection 152(4.2) to reassess.
[17]
The CRA has issued an Information
Circular, IC07‑1, headed: Taxpayer Relief Provisions, dealing precisely
with how it deals with individuals’ adjustment requests and when it will
reassess for up to a ten‑year period as permitted by
subsection 152(4.2). Paragraphs 71 and 72 of that Information
Circular provide:
71. The CRA may issue a refund or reduce the amount owed if it
is satisfied that such a refund or reduction would have been made if the return
or request had been filed or made on time, and provided that the necessary assessment
is correct in law and has not been already allowed.
72. Individuals . . . can make a request
if they were not aware of, or missed, claiming a deduction or a non‑refundable
tax credit that was available for the year, such as child care expenses or the amount
for an eligible dependant. Individuals can also ask for refunds or reductions
of amounts owing for refundable tax credits such as provincial tax credits that
have not been claimed. . .
[18]
From what I can
understand, Ms. Osei‑Tutu’s claim is fully in accordance with these
two paragraphs. If it were within my power, I would order the CRA to reassess
under subsection 152(4.1), however, this Court does not have that power.
[19]
The law requires me to
allow the Crown’s motion and to strike the 1999 to 2002 appeals because
Ms. Osei‑Tutu did not properly object to those years within the time
frames required by the Income Tax Act.
[20]
I would urge the respondent,
the CRA, together with its counsel to seriously reconsider its refusal to
reassess Ms. Osei Tutu to allow her adjustment request, so that it
can at least clearly explain to her why it is not being allowed, given the CRA
is satisfied she was entitled to the common‑law spousal credit and given the
CRA’s administrative policies set out in its own Information Circular on when
it will reassess in such circumstances.
[21]
Ms. Osei‑Tutu,
I will be having these reasons transcribed and sent to both you and Mr. Perlinski.
I would urge you to read them because I know they may have been difficult to
follow as I read them. I would urge you to obtain a copy of the CRA Information
Circular I referred to and perhaps Mr. Perlinski can make arrangements to
get you a copy. As I stated earlier, if at the end of the day you are not satisfied
with the CRA’s response and how it exercises its discretion in your case, you
have to complain to the Federal Court, not the Tax Court. The same registry
office serves both courts, if you are looking for information on it. I hope it does
not get to that and wish both sides well in hopefully trying one more time to
resolve the dispute. I may have had to strike the appeal in this Court, but the
dispute with the CRA remains to be resolved.
[22]
Mr. Osei‑Tutu
has been successful in her 2003 appeal. While the Crown’s motion to strike the
years 1999 to 2002 was also successful, that is a procedural victory in an informal
appeal in which a possibly better and final resolution was available but was in
the discretion of the CRA, which it has inexplicably refused to exercise. In
these circumstances I am awarding costs payable by the respondent to Ms. Osei Tutu
in the amount of $250.
[23]
Thank you Mr. Perlinski
and Mr. Amponsah for your clear and helpful input. Thank you Madam
Registrar and Madam Court Reporter. We are adjourned.
Signed at Ottawa, Canada, this 12th day of April 2010.
"Patrick Boyle"
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