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Docket: 2004-1711(IT)I
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BETWEEN:
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PERRY D. CHARLEBOIS,
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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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____________________________________________________________________
Appeal heard on October 6, 2004, at Toronto,
Ontario,
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By: The Honourable Justice A.A. Sarchuk
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Appearances:
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For the Appellant:
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The Appellant himself
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Agent for the Respondent:
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Paolo Torchetti (Student-at-law)
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____________________________________________________________________
JUDGMENT
The
appeal from the assessment of tax made under the Income Tax
Act for the 2001 taxation year is dismissed.
Signed at Ottawa, Canada, this 30th day of November, 2004.
Sarchuk J.
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Citation: 2004TCC785
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Date: 20041130
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Docket: 2004-1711(IT)I
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BETWEEN:
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PERRY D. CHARLEBOIS,
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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
Sarchuk J.
[1] In computing tax payable for the
2001 taxation year, the Appellant claimed a gross non-refundable
tax credit in relation to an "amount for an eligible
dependent" totalling $6,293 in respect of his daughter,
Nadine. The Appellant was initially assessed, as filed.
Subsequently, the Minister of National Revenue reassessed the
Appellant and disallowed the "amount for an eligible
dependent" as the Appellant failed to provide sufficient
information to demonstrate that he was entitled to such a
claim.
[2] The following facts are not in
dispute. The Appellant and Tracey Brandt are the parents of two
children, Courtney, born May 1, 1989 and Nadine, born May 31,
1996. The Appellant and Tracey were living separate and apart due
to a marriage breakdown during the 2001 taxation year. The
Appellant testified that the marriage had been "on the
rocks" for some period of time and that as a result, even
though they continued to reside in the same residence in 2001,
they maintained separate bedrooms and led separate lives. Both
were employed and for the most part worked "opposite
shifts" which enabled one of them to look after the children
with the result that day-care for them was required only on rare
occasions. The Appellant also testified that he and Tracey shared
all of the expenses in the home, albeit he paid the majority of
them. He says that he had received information from Revenue
Canada to the effect that if he and Tracey were unable to agree
on "who is going to claim the children, that the claim would
be denied to both of us" and as a result "we decided
that at the very beginning that I would claim both children and
then we continued to do so throughout the years until the 2001
year where things started getting really messy, so we decided to
claim one each". Thus, in filing their returns in that year,
the Appellant claimed Nadine and Tracey claimed the other
daughter, Courtney.[1]
[3] The Respondent's position is
premised in part on the provisions of paragraph 118(1)(b)
of the Income Tax Act, the relevant portion of which
reads:
118(1) For the purpose of computing the tax payable
under this Part by an individual for a taxation year, there may
be deducted ...
(b) in the
case of an individual who does not claim a deduction for the year
because of paragraph (a) and who, at any time in the
year,
(i) is
(A) ...
(B) a person who is
married or in a common-law partnership, who neither supported nor
lived with their spouse or common-law partner and who is not
supported by that spouse or common-law partner, and
(ii) whether alone
or jointly with one or more other persons, maintains a
self-contained domestic establishment (in which the individual
lives) and actually supports in that establishment a person who,
at that time, is
(A) ...
(B) wholly dependent for
support on the individual, or the individual and the other person
or persons, as the case may be,
(C) related to the
individual, and
(D) ...
Counsel for the Respondent argued that although the Appellant
had separated from his wife, at the same time he claims that he
supported the wife entirely and that he was the primary income
earner in the family. That, counsel argued, defeats the
Appellant's reliance on this provision since the legislation
clearly stated that one is required not to have supported the
other spouse.
[4] Paragraph 118(1)(a)
provides for what is known as the married tax credit which may be
claimed only by an individual who is married and supports the
spouse. Paragraph 118(1)(b) provides a somewhat similar
credit for taxpayers who support a wholly dependent person. The
Act is clear that the equivalent to married tax credit
cannot be claimed by an individual who is married and lives with
his spouse, but can be claimed only by an individual who is
single, widowed, divorced or separated. In order to claim this
credit, the taxpayer must have supported an individual living in
their home who was wholly dependent upon the taxpayer. In this
particular appeal, it is clear that the child in issue was not
wholly dependent upon the taxpayer. If the Appellant and his wife
were living separate and apart, and the Minister does not dispute
that fact, there is nonetheless inadequate information as to
which of the parents cared for which child. This information is
relevant and the best that could be said with respect to the
evidence before the Court is that both the Appellant and his
estranged spouse were involved in the financial support required.
Counsel for the Respondent further argued that the Appellant
cannot succeed because paragraph 118(4)(b) of the
Act provides that:
118(4) For the purposes of subsection (1), the following
rules apply:
(a)
...
(b) not more
than one individual is entitled to a deduction under subsection
(1) because of paragraph (b) of the description of B in
subsection (1) for a taxation year in respect of the same person
or the same domestic establishment and where two or more
individuals otherwise entitled to such a deduction fail to agree
as to the individual by whom the deduction may be made, no such
deduction for the year shall be allowed to either or any of
them;
(c)
...
These legislative provisions indicate that not more than one
individual is entitled to the deduction in question for a
taxation year in respect of either the same person or the same
domestic establishment. Where two or more individuals otherwise
entitled to such a deduction fail to agree as to whom a deduction
can be taken, no such deduction for the year shall be allowed to
either or any of them.
[5] The Appellant has conceded that he
that he and his wife each had made a claim for a deduction with
respect to one of the children. I agree with the Respondent's
position that this takes the Appellant out of the provisions of
the Act and accordingly the Minister's assessment was
correct in that no dependents were wholly dependent and/or
supported by the Appellant in a self-contained domestic
establishment that he himself maintained.
[6] Accordingly, the appeal is
dismissed.
Signed at Ottawa, Canada, this 30th day of November, 2004.
Sarchuk J.
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