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Citation: 2009 TCC 346
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Date: 20090626
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Docket: 2009-549(IT)APP
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BETWEEN:
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HELMUT GOLLNER,
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Applicant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR ORDER
Little J.
A. Facts:
[1] The Applicant is a
retired barber. The Applicant said that after he retired as a barber he
continued to sell shampoo products.
[2] The Applicant
explained his tax problem as follows:
(a) The Applicant received a
letter from the Canada Revenue Agency (the “CRA”) in which he was advised that
the CRA would carry out an audit for his 2001, 2002 and 2003 taxation years.
(b) The Applicant hired an
accountant and provided officials of the CRA with the information that they had
requested for his 2001, 2002 and 2003 taxation years.
(c) Approximately three months
after he had provided the financial information to officials of the CRA he was
advised that the review of his tax position would be conducted by way of a Net
Worth Analysis.
(d) On May 1, 2006, the
Minister of National Revenue (the “Minister”) issued Notices of Reassessment
for the Applicant’s 2002 and 2003 taxation years.
(e) On June 20, 2006, the
Applicant filed Notices of Objection to the Notices of Reassessment issued for
the 2002 and 2003 taxation years.
(f) After the Notices of
Objection were filed the Applicant’s accountant, Mr. Werner Rohrlack had
discussions with Tina Tingson and Ron H. Brass of the Appeals Section of the
CRA. These discussions concerned the Income Tax Reassessments plus the Goods
and Service Tax Reassessments.
(g) On November 14, 2007, the
Minister issued a Notification of Confirmation for the Applicant’s 2002
taxation year.
(h) On December 18, 2007, the
Minister issued a Notice of Reassessment for the Applicant’s 2003 taxation
year. In this Reassessment the Minister reduced the Applicant’s income for the
2003 taxation year from $133,183 to $31,359, i.e. a reduction of $101,824.
(i) On July 10, 2008, the
Applicant filed a Notice of Objection to the Reassessment issued for the 2003
taxation year.
(j) On February 16, 2009, the
Applicant filed an application to extend the time within which to file a Notice
of Appeal for the 2002 and 2003 taxation years.
(k) On May 7, 2009, the
Respondent filed a Reply to an Application for an Extension of Time. In the
Reply the following comments are found:
1. The
Minister of National Revenue (the “Minister”) does not oppose the request for
an Order extending the time within which a Notice of Appeal for the 2003
taxation year may be filed.
2. The
Minister does oppose the request for an Order extending the time within which a
Notice of Appeal for the 2002 taxation year may be filed.
(l) In addition to the income tax
issue, the Applicant also has a Goods and Services tax issue. On the 8th
day of April 2009, Justice McArthur issued an Order which reads, in part, as
follows:
This Court orders that
the time within which an appeal may be instituted is extended to the date of
this Order and the notice of appeal, received with the application, is deemed
to be a valid notice of appeal instituted on the date of this Order if the
appropriate filing fee is paid to the Registry not later than May 11, 2009.
B. ISSUE:
[3] The issue is
whether the Tax Court has the authority to grant an Order extending the time
within which the Applicant may file a Notice of Appeal with respect to the 2002
taxation year.
C. ANALYSIS AND DECISION:
[4] Counsel for the
Respondent stated that the Notice of Appeal to the Notification of Confirmation
for the 2002 taxation year should have been filed within 90 days of
November 14, 2007, i.e. on or before February 12, 2008.
[5] Counsel for the
Minister stated that the one year time limit for requesting an extension of
time within which to file a Notice of Appeal would expire on February 12, 2009.
The Application to extend the time to file an appeal was filed by the Applicant
on February 16, 2009, i.e. four days after the deadline.
[6] The relevant
provisions in the Income Tax Act (the “Act”) are:
1.
Section
169(1) of the Act provides that a taxpayer who wishes to appeal an
assessment should file an appeal within 90 days of the date that the
Notification of Confirmation is mailed. In this situation the Notification was
issued on November 14, 2007 and therefore the Notice of Appeal should have been
filed on or before February 12, 2008.
2.
Paragraph
167(5)(a) of the Act allows an application for an extension of time if
it is filed within one year following the end of the 90-day period. In other
words the one year deadline would expire on February 12, 2009.
[7] As noted, the
Application to extend the time was filed on February 16, 2009, i.e. four days
after the deadline.
[8] There are many
Court decisions which have stated that the Tax Court does not have the
authority to extend the 90-day plus one year time limitation in order to give a
taxpayer the right to file a Notice of Appeal to a Notification of Confirmation.
[9] I have no
alternative but to allow the Minister’s Motion and dismiss the Application to
extend the time for filing a Notice of Appeal to the Notification of
Confirmation issued for the 2002 taxation year. I do not have the authority to
extend the time to file a Notice of Appeal beyond the 90-day plus one year.
[10] Before closing I
wish to make some comments and observations:
1. When the Applicant appeared
in Court he indicated that he was being treated for cancer during the period
when the audit was being conducted by the CRA.
2. The Applicant also said
that he had received incorrect advice from his previous financial advisors
regarding his tax position.
3. The Applicant said that he
retained Mr. W.P. Rohrlack of W.R. Accounting & Consulting Services.
The Applicant filed Exhibit A-1 which contained several letters from Mr.
Rohrlack to officials of the CRA. By letter dated January 17, 2007, Mr.
Rohrlack stated “I have been an accountant for 40 years, and indeed used
to be a Tax Auditor, but I have never seen the type of confusion in the
numbers”. From the evidence that I have reviewed it appears that officials of
the CRA were not aware of all of the relevant facts concerning the Applicant.
4. During the hearing counsel
for the Minister filed Exhibits R-5 and R-6.
(a) Exhibit R-5
contains the following statement:
Re: Notice of Objection
postmarked July 24, 2008 for the taxation years: 2001, 2002 and 2003.
My Comments: According to the
evidence produced the Notice of Objection for the 2003 taxation year was filed
on July 10, 2008. The Notice of Objection for the 2002 taxation year was filed
on June 20, 2006.
The letter from the CRA reads, in
part, as follows:
You did not file your
objection within 90 days from the mailing date of the Notices of Reassessment,
dated May 5, 2007 for the 2001 and 2002 taxation years …
My Comments: The Notice of
Reassessment for the 2002 taxation year was issued on May 1, 2006 and not May
5, 2007.
(b) Exhibit R-6
reads as follows:
Our letter of October 9,
2008 regarding the objection filed for 2002 and 2003 is in error.
Objections were
previously filed for the 2002 and 2003 taxation years. A Notice of Confirmation
was issued for the 2002 objection on October 9, 2008. …
Note: This reference to
the 2002 objection dated October 9, 2008 appears to be incorrect. According
to the evidence, the Notification issued to confirm the Reassessment for the
2002 taxation year was issued on November 14, 2007 and not October 9, 2008 as
Exhibit R-6 states.
My Further Comments: The incorrect
information contained in the letter dated October 9, 2008 (Exhibit R-5) and the
letter dated November 12, 2008 (Exhibit R‑6) was, I am sure, very
confusing to the Applicant.
[11] Based on the above
comments, I have reached the following conclusions:
A. Hopefully the Applicant can
deal with the outstanding tax issues for the 2002 taxation year when he deals
with the Notice of Appeal filed for the 2003 taxation year.
B. Since the GST issue is based upon
the income received by the Applicant for the period July 1, 2001 to December
31, 2003, the Applicant may also be able to resolve some of the outstanding tax
issues in the 2002 taxation year when he deals with the GST issues.
C. Since the Applicant was receiving
treatment for cancer during the audit period and since officials of the CRA
made a number of errors re. timing (see Exhibits R-5 and R-6) this may be a
situation where the Minister should apply the fairness provisions contained in
section 220 of the Act to grant the Applicant some relief. I do not have
the authority to exercise these provisions. This discretionary authority is
held by the Minister and his officials.
D. If tax issues for the 2002
taxation year remain outstanding this may be a situation where the Minister should
apply subsection 23(2) of the Financial Administration Act. Subsection
23(2) reads as follows:
(2) The Governor in Council may, on
the recommendation of the appropriate Minister, remit any tax or penalty,
including any interest paid or payable thereon, where the Governor in Council
considers that the collection of the tax or the enforcement of the penalty is
unreasonable or unjust or that it is otherwise in the public interest to remit
the tax or penalty.
Only the Federal Cabinet on the
recommendation of the Minister has the authority to remit tax.
[12] Finally, I wish to
refer to the comments made by Counsel for the Minister during the hearing that
was held on June 9, 2009.
[13] During the hearing Mr.
Canzer said:
I can advise the court as well that just
this morning I've had conversations with an official of the Canada Revenue
Agency, who was able to advise me that they are not -- without making any
promises or representations, they are not completely ruling out the possibility
of working under Section 169(3), which is disposition of appeal on consent.
[14] The Minister’s
Motion is accepted and the Application is dismissed.
Signed at Vancouver, British Columbia, this 26th day of June 2009.
Little
J.
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