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Citation: 2009 TCC 542
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Date: 20091023
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Docket: 2009-196(IT)I
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BETWEEN:
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TRUDY FINDLAY,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Little J.
A.
FACTS
[1] At all relevant times, Garth Findlay was the co-habiting spouse
of the Appellant.
[2] In the 2004 taxation year, the Appellant was employed by Lee
Valley Tools Ltd.
[3] The Appellant’s net income for the 2004 taxation year was
$15,600.00. Mr. Findlay’s net income for the 2004 taxation year was
$57,424.00. The family net income for 2004 was $73,024.00.
[4] When the Appellant filed her income tax return for the 2004
taxation year she did not state her marital status in the tax return, nor did
she declare the net income of her husband, Garth Findlay, for 2004.
[5] For the period from July 2005 to May 2006 of the 2004 base
taxation year (the “2004 base taxation year”), the Appellant had one qualified
dependant, a son, who was born on May 12, 1988.
[6] By a Notice dated July 20, 2005, the Minister of National
Revenue (the “Minister”) determined that the Appellant was entitled to Canada
Child Tax Benefits (“CCTBs”) of $245.87 for the month of July 2005 and $245.83
per month for the period August 2005 to May 2006 on the basis that:
(a) she
was single;
(b) she
had one child who was eligible for the benefits until May 2006; and
(c) she
had a family net income of $15,600.00.
[7] By a Notice dated July 18, 2008, the Minister notified the
Appellant that her entitlement to CCTBs had been recalculated for the 2004 base
taxation year on the basis that:
(a) she
was married;
(b) she
had one eligible child; and
(c) she
had a “family” net income of $73,024.00.
[8] Because of the new position adopted by the Minister, the
Minister determined that the Appellant had deemed overpayments of CCTBs
totalling $2,264.70 for the period from July 2005 to May 2006 (i.e. the 2004
base taxation year).
[9] The Appellant filed a Notice of Objection and the Minister
issued a Notification of Confirmation on October 21, 2008.
B. ISSUE
[10] The issue is whether the Minister properly calculated the
Appellant’s entitlement to CCTBs for the 2004 base taxation year.
C. ANALYSIS
AND DECISION
[11] During the hearing, Mr. Findlay filed the front cover of the
Appellant’s 2004 income tax return (Exhibit A-5) and his personal income tax
return for 2004 (Exhibit A-4).
[12] Exhibit A-5 indicates the errors that were made when the
Appellant signed her 2004 income tax return. For example, the 2004 income tax
return indicates that the Appellant did not enter her date of birth and did not
“check the box” to show her marital status on December 31, 2004. In
addition, the Appellant did not enter her spouse’s net income for 2004.
However, as Mr. Findlay pointed out, the Appellant’s tax return did contain the
spouse’s Social Insurance Number (“SIN”). (Note: A printed label issued
by the Canada Revenue Agency (the “CRA”) contained a copy of the Appellant’s
SIN number plus Mr. Findlay’s SIN number.)
[13] Mr. Findlay also noted that, in his personal tax return for 2004,
the marital status box was checked as single. However, Mr. Findlay maintained
that he did not personally check the box indicating that he was single. During
examination‑in-chief, the following dialogue occurred:
JUSTICE: It is checked off, I don’t
know who checked it off.
THE WITNESS: That is what I’d like
to know.
(Mr. Findlay)
(Transcript,
page 22, lines 11-14)
[14] In cross-examination, Mr. Findlay admitted that he had prepared
the Appellant’s income tax return for 2004 and that he had prepared his
personal income tax return for 2004. Mr. Findlay admitted that the Appellant’s
income tax return does not contain Mr. Findlay’s name and Mr. Findlay’s 2004
income tax return does not contain the Appellant’s name (Transcript, page 30,
lines 12-16).
[15] Furthermore, neither income tax return contained any reference
to the 2004 net income of the other spouse for 2004, although the tax return
form for each party contains the words, “Enter his or her net income for 2004”
to claim certain credits (Transcript, page 32, lines 5-14).
[16] During his argument, Mr. Findlay said that if officials of the CRA
had made inquiries of the marital status of Mr. and Mrs. Findlay
before sending out refunds (i.e. the CCTBs), the whole mess would have been
cleared up.
[17] In addition, the Appellant said during her testimony that she
phoned the CRA regarding the CCTBs. She said that she talked to an unidentified
CRA official and said:
… "I shouldn't be getting this. I'm working now,
I'm almost four days a week, I shouldn't be getting this, it's too much."
And they said, not to worry, "the government will let you know when it's
too much", …
(Transcript, page
8, lines 8-11)
[18] Counsel for the Respondent said that the CCTBs are calculated
based on the income of the person and the income of his or her co-habiting
spouse. She noted that it is the family income that is used to determine the entitlement
to and the amount of the benefits. She said:
… Essentially, the benefit decreases as family income
increases. Demonstrating parliament’s intent to provide a greater benefit to
lower income families. …
(Transcript,
page 45, lines 3-5)
[19] Counsel for the Respondent also noted the argument of Mr.
Findlay is that the Minister could have looked beyond the filed tax returns
to find out that the Appellant was, in fact, married in 2004. (Emphasis added)
[20] Counsel for the Respondent said that it is the Respondent’s
position that no administrative error was made by the Minister and the Minister’s
recalculation of the Appellant’s CCTBs is correct.
[21] Counsel for the Respondent also noted that, if an administrative
error had occurred, it would have no impact on the outcome of the appeal.
[22] In support of her position, counsel for the Respondent referred
to the case of Dionne v. Canada, [2004] 2 C.T.C. 2828. In that case, the
Appellant received CCTBs calculated solely on the basis of her income, and not
taking into account her husband’s income, because of an administrative error on
the part of the Minister. The Appellant had correctly recorded her marital
status on her income tax return, but the Minister mistakenly determined the
Appellant’s CCTBs taking into account her income alone. When the error was
later discovered, the Minister recalculated the benefits, taking into account
her husband’s income, which reduced the benefit. The Minister sought to recover
the payment. At paragraph 16, Tardif J. states:
[16] Admittedly, the claim has caused
problems and inconvenience. It is unfortunate that the appellant has to be so
inconvenienced because of an administrative error. However, this is not
sufficient to cancel the claim or allow the appeal. …
Paragraph 17 of the Dionne
decision refers to several cases and goes on to state:
[17] The only basis for the
appellant's appeal is equity. The Tax Court of Canada has no authority to
dispose of an appeal on that basis. Its jurisdiction is basically to decide
whether the notices of redetermination comply with the relevant provisions of
the Act. …
[23] I agree with the comments and conclusion of Justice Tardif. I
also note that the facts in the Dionne case are quite similar to the
facts in this appeal. However, in the Dionne case the Appellant had
correctly indicated her marital status on her income tax return.
[24] Before concluding my Reasons for Judgment, I wish to note that
the Appellant made the following errors when she prepared and filed her income
tax return for 2004:
1. She
did not enter her date of birth;
2. She did not indicate whether the language of correspondence
was English or Français;
3. She
did not check the box that indicates her marital status;
4. She
did not enter her spouse’s first name; and
5. She
did not enter her spouse’s income for 2004.
[25] Mr. Findlay made the following mistakes in completing his 2004
income tax return:
1. He
did not enter his date of birth;
2. He did not indicate whether the language of correspondence
was English or Français;
3. He
(or someone) checked the box which stated that he was single;
4. He
did not enter his spouse’s first name; and
5. He
did not indicate his wife’s net income for 2004.
[26] The only point made by the Appellant is that she said that she
had talked to an unidentified official of the CRA to indicate that the CCTBs received
by her were too high. She alleges that the CRA official told her not to worry. The
CRA official allegedly said, “the government will let you know when it’s too
much”. In my opinion, this allegation is not sufficient to establish any administrative
error on the part of the CRA.
[27] In summary, a taxpayer cannot make significant mistakes of this
nature on her income tax return and then claim that officials of the CRA made
an administrative error in not picking up the taxpayer’s mistakes.
[28] In my opinion, the Minister’s calculations in determining the
CCTBs for the Appellant’s 2004 base taxation year were correct. The appeal is dismissed, without costs.
Signed at Vancouver, British Columbia, this 23rd day of October 2009.
Little
J.
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