Docket: 2006-3370(IT)I
BETWEEN:
NORMAN TUFTS,
Appellant,
and
HER MAJESTY THE QUEEN,
Appeal heard on January 22, 2008, at London, Ontario
Before: The Honourable
Justice Patrick Boyle
Appearances:
|
For the Appellant:
|
The
Appellant himself
|
|
|
|
|
Counsel for the Respondent:
|
Pascal Tétrault
|
JUDGMENT
The appeal from the reassessments made under
the Income Tax Act for the 2000, 2001 and 2002 taxation years is allowed
in part, without costs, and the matter is referred back to the Minister of National
Revenue for reconsideration and reassessment in accordance with the attached
Reasons for Judgment.
The appeal from the reassessments made under
the Income Tax Act for the 2003 and 2004 taxation years is dismissed.
Signed at Ottawa, Canada, this 29th day of January 2008.
"Patrick Boyle"
Citation: 2008TCC68
Date: 20080129
Docket: 2006-3370(IT)I
BETWEEN:
NORMAN TUFTS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Boyle, J.
[1] Mr. Tufts donated a
historic vehicle to a Canadian museum. It was duly certified as Canadian
cultural property and appraised at $52,000 for that purpose. Neither the
donation nor the value of the car are in question by either party.
[2] Prior to deciding
to donate a car he had owned since new and maintained and restored for almost
50 years, Mr. Tufts met with CRA officials on more than one occasion.
These discussions focused on the tax consequences to Mr. Tufts of making a
$52,000 gift of cultural property. According to Mr. Tufts, this included
CRA agents filling out written sample Schedule 9 gift calculations and
annotating the CRA guides and forms regarding such donations. Apparently CRA
spent considerable time with Mr. Tufts determining his expected tax
consequences. The two CRA offices he consulted, also consulted with the CRA in Ottawa in the course of
working with him.
[3] Relying on this
information, Mr. Tufts made the gift in 2000 and began claiming tax credits
for his gift. Mr. Tufts testified that, based upon and relying on the representations
of CRA and his understanding, he claimed the credit for his donation in the
first year based on the full amount of the gift even though his income for the
year was less than $52,000. The Income Tax Act (the “Act”) provides
that the amount of the gift that can result in a credit in a year is limited to
the taxpayer’s income for the year since the resulting credit is
non-refundable. The Act does not allow any greater credit, nor is it
apparent how one could use it in any event, notwithstanding what Mr. Tufts
may have been initially advised by CRA. The excess of the gift can, however, be
carried forward to generate a credit in the following years as a result of the
definition of “total cultural gifts” in the Act.
[4] This is where the second
and more substantive problem arises for Mr. Tufts. Mr. Tufts says that the
CRA officials also explained to him that the portion of the $52,000 gift
available to be carried forward to the next year was $52,000 less the amount of
the credit claimed in the year of the gift. Again he testified this was
discussed clearly and shown to him by the CRA officials after careful thought,
review and consultation with Ottawa. This too reflects a misunderstanding since the definition
of “cultural gifts” sensibly provides that, in determining the balance of the
gift which can be carried forward to a subsequent year, the $52,000 initial
amount of the gift is reduced by the amount of the gift already used to
compute a tax credit.
[5] Despite
Mr. Tufts’ misunderstandings and despite whatever CRA officials initially
may have advised him, his appeal on these calculations cannot succeed in this
Court.
[6] Mr. Tufts
testified he would have not made the gift but for the representations made to
him by CRA that he could claim tax credits as he did. Mr. Tufts said he
would have not donated the car to the Canadian museum but would have sold it to
one of several potential purchasers for cash instead. He did not argue that the
Crown should be estopped from reassessing contrary to CRA’s initial
representations, and it is most unlikely that such a claim could have succeeded
in this Court. Apparently Mr. Tufts and CRA do have this whole matter
before both a Fairness Committee and a Remission Order review committee and Mr. Tufts
is hopeful of finding some relief from these processes as a result of his
having received incorrect, or at least poorly explained, advice from CRA at the
outset. However, he understands both of those committees require him to exhaust
his avenues of appeal to this Court before they will finally decide his
matters. I trust that is not truly the case since two such high level
committees should have had no difficulty anticipating the outcome of this
appeal.
[7] Mr. Tufts’
appeal cannot succeed on its substantive merits. The Crown has conceded that
the amount of the cultural gift tax credit reassessed for 2000 to 2002 should
be further reassessed to allow certain other tax credits available to
Mr. Tufts to be used in those years. This is described in paragraph 12 of the
Minister’s Reply and shown in Schedule B thereto.
[8] I should add that,
in this proceeding, I am not called upon to determine the source of
Mr. Tufts’ misunderstandings regarding the tax credit resulting from the
$52,000 cultural gift he made. Nor in the circumstances could I determine if
CRA made one or more misrepresentations to him in this regard. No CRA official
provided any evidence and I did not need to sort out whose writing appears on
which part of the several forms and guides. I was not told what, if any, part
the Canadian museum receiving the gift may have played in contributing to
Mr. Tufts’ misunderstandings.
[9] I am referring the 2000
to 2002 reassessments back to the Minister for reconsideration and reassessment
in accordance with these Reasons. I am dismissing the appeals for the 2003 and
2004 years.
Signed at Ottawa, Canada, this 29th day of January 2008.
"Patrick Boyle"
CITATION: 2008TCC68
COURT FILE NO.: 2006-3370(IT)I
STYLE OF CAUSE: NORMAN TUFTS AND HER MAJESTY THE QUEEN
PLACE OF HEARING: London, Ontario
DATE OF HEARING: January 22, 2008
REASONS FOR JUDGMENT BY: The
Honourable Justice Patrick Boyle
DATE OF JUDGMENT: January 29, 2008
APPEARANCES:
|
For the
Appellant:
|
The Appellant himself
|
|
|
|
|
Counsel for the
Respondent:
|
Pascal Tétrault
|
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa,
Canada
Email this Content