Citation: 2008TCC79
Date: 20080208
Docket: 2007-2602(IT)I
BETWEEN:
BOB KING,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
(Delivered
orally from the bench on January 17, 2008,
in Moncton,
New Brunswick.)
Angers J.
[1] This is an appeal of the appellant's 2005 taxation
year assessment which was confirmed on March 14, 2007. The appellant was
initially assessed on October 23, 2006.
[2] In calculating his income tax liability for
the 2005 taxation year, the appellant claimed meals and other employment
expenses in the amount of $14,490.
[3] The Minister has in fact reviewed the appellant's
claim for meals as described above and has reassessed the appellant based on a
$45 per day expense, obviously reduced by the 50% provision provided for in the
Income Tax Act (the "Act").
[4] The facts are summarized as follows:
-
The appellant was at
all material times, i.e. during 
the year 2005, a transport employee.
-
In claiming his meal
expenses, the appellant had the option of using the simplified method or
keeping a detailed record of his actual meal expenses. For taxation year 2005,
the appellant has chosen the simplified method.
-
The appellant, during
the year 2005, took 207 trips and as such, has consumed 621 meals during the
trips in that taxation year.
-
In his tax return for
2005, the appellant claimed a deduction of $70 per day for the 207 days for a
total of $14,490 and the appellant did not reduce his meal claim in his tax
return by the 50% provided for in section 67.1 of the Act.
[5] The relevant sections of the Act are
paragraphs 8.1(g) and section 67.1.
[6] A simple analysis of the 50% reduction in
this fact situation is that, as I have mentioned during the trial, there is
nothing that I can do concerning the 50% reduction. It is provided for in section
67.1 of the Act.
[7] As for the method of calculating the meal expenses, it is
well explained in a decision rendered by Mr. Justice Bowie of this Court in the
Kasaboski v. R., which is found at 2005 D.T.C., page 846.
[8] Justice Bowie has
explained it by saying that:
While it has no
legal foundation, the Minister's willingness to accept meal claims by transport
employees on the so-called simplified basis is a recognition of the injustice
that would result if claims were to be totally denied if the taxpayer could not
produce a corroborating log. The $33 per day that he allows is a recognition
of what I consider to be a truism - a taxpayer should never benefit from a
failure to keep proper records.
[9] Obviously, the
truth of the matter is that
even though no records are being kept, an amount is still allowed, to permit as
in the present case, a deduction for meal expenses.
[10] In this instance, it is clear that the appellant
has not kept any records or any receipts for his meals and has therefore chosen
the simplified method.
[11] Obviously, if one wants to be reimbursed for the
entire amounts of money spent on meals, the solution is to keep the receipts
and claim the exact amounts as deductions, but this is not the case here.
[12] What the appellant has done in this case is, claimed
his meal expenses based on $70 a day. Now the answer that I have heard on a
question that was asked to the appellant regarding the amount of money that he
actually spent on meals out of the $14,490 that was claimed, was actually half
of that amount.
[13] If I make a quick calculation, what was
originally claimed was 207 days at $70 a day for a total of $14,490. If I go with the evidence, the actual expense
would have been half of that amount, so the actual amount, had receipts been
kept by the appellant, would be $7,245.
[15] Given the fact that the Act provides for a
50% deduction, the appellant, had he kept his actual receipts, from the
evidence and from his own admissions that only half of that went to meals,
means that the claim would have been half of $7,245.
[16] The reason I am going through this is because
if I take the numbers that the Canada Revenue Agency (CRA) used in this instance;
they have allowed $45 a day, so 207 days at $45 equals a total of $9,315.
Therefore, the amount that CRA has allowed the appellant is actually almost
$2,000 more than the actual expense the appellant would have spent on meals.
[17] The evidence does not disclose if other
expenses were made on things other than meals, because the tax returns for 2005
clearly indicate that the $70 a day claim was specifically for meals.
[18] In my opinion, the $45 a day in this
particular instance has to be reasonable in the circumstances, and to my
knowledge, it does satisfy the test established by this Court in the Kasaboski
decision rendered by Mr. Justice Bowie; that test being what would a reasonable
trucker have spent in these circumstances based on the Gabco Ltd. v. Canada,
68 DTC 5210, decision.
[19] As I have mentioned, by his own admission, if
half of that $14,490 was his actual expense, it means that he would have been
able to claim less than what CRA is actually allowing him in their assessment.
[20] As for the argument raised by the appellant concerning
the civil servants, I can only refer back to the quote by Mr. Justice Bowie
that allowances paid to public servants are established as a term of their
employment and as such, they are not relevant in determining this matter unless
it would be a possible test of reasonableness for the purpose of section 67.1.
[21] Since I have come to the conclusion that the
amount allowed by CRA far exceeds what the appellant himself
says was his actual expense, I cannot come to another conclusion than to say
that the amount allowed by CRA is reasonable in the circumstances.
[22] On the basis of this conclusion, I have no
other choice but to dismiss the appeal.
Signed at Edmundston,
New Brunswick, this 8th day of February 2008.
"François
Angers"
Email this Content