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Citation: 2004TCC337
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Date: 20040504
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Docket: 2003-1832(IT)I
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BETWEEN:
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KAREN KEHLER,
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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] The Appellant and her husband,
Leroy Kehler, were married in 1981.
[2] Two children were born of the
marriage:
Daughter
- 1985
Son
- 1989
(The children are collectively referred to as the
"Children".)
[3] The Appellant and her husband
separated in September 2001. Following the separation the
Children lived with their father at the family home in the City
of Winnipeg, Manitoba.
[4] The Appellant maintains that all
child tax benefits paid with respect to the Children were
deposited in an account at the Cambrian Credit Union. The
Appellant said that this account was a Joint Account and that she
and her husband had signing authority on the bank account (the
bank account is hereinafter referred to as the "Joint
Account").
[5] The Appellant said that when she
filed her income tax return for the 2001 taxation year she became
entitled to a tax refund of approximately $1,500.00.
[6] The Appellant also stated that the
tax refund which was issued by the Canada Customs and Revenue
Agency ("CCRA") was deposited in the Joint Account.
[7] The Appellant maintains that the
only access that she made to the Joint Account after the
separation in September 2001 was made by her to remove
approximately $1,000.00 of the $1,500.00 tax refund that had been
deposited by the CCRA.
[8] The Appellant contends that all of
the child tax benefits that have been paid since the separation
were deposited in the Joint Account. The Appellant said that she
has never had access or attempted to have access to any of the
moneys in the Joint Account other than the one time, as noted
above, when she removed a portion ($1,000.00 out of $1,500.00) of
the tax refund.
[9] The Minister of National Revenue
(the "Minister"), by Notice dated October 18, 2002,
advised the Appellant that she was in receipt of Canada Child Tax
Benefit ("CCTB") overpayments in the amount of
$1,161.54 for the 2000 base period and $824.40 for the 2001 base
taxation year.
B.
ISSUE:
[10] Is the Appellant required to include in
her income any portion of the Child Tax Benefits that were
deposited in the Joint Account after the separation.
C.
ANALYSIS:
[11] The relevant legislation in the
Income Tax Act (the "Act") reads as
follows:
122.6 "eligible individual" in respect of a
qualified dependant at any time means a person who at that
time
(a) resides
with the qualified dependant;
(b) is the
parent of the qualified dependant who primarily fulfils the
responsibility for the care and upbringing of the qualified
dependant, . . .
[12] Subsection 122.62(4):
(4) Person ceasing to be an eligible individual.
Where during a particular month a person ceases to be an eligible
individual in respect of a particular qualified dependant
(otherwise than because of the qualified dependant attaining the
age of 18 years), the person shall notify the Minister of that
fact before the end of the first month following the particular
month.
[13] During the hearing before the Court the
Appellant made the following statements:
(a) Around July 5, 2002 she
called the CCRA to ask them not to direct deposit any money in
the Joint Account that she shares with her spouse. Thereafter she
received the child tax benefits through the mail; (Transcript,
page 29)
(b) When asked by counsel for the
Respondent if she notified the Minister of her position the
Appellant said:
As far as the child tax benefit credits go, no, I did not. I
didn't notify anybody of anything. (Transcript, p. 28)
(c) The Appellant did not notify the
CCRA that she no longer had the care of her children because she
was not aware of that obligation; (Transcript, page 31);
(d) Until October 22, 2003 (the date
of the hearing) the Appellant had not notified the CCRA that she
was no longer living with her children; (Transcript,
page 33)
(e) The CCRA is aware of the
Appellant's change of address. (Transcript, page 33)
[14] Subsection 122.62(4) of the Act
requires a taxpayer to notify the Minister if she ceases to be an
"eligible individual". An "eligible
individual" is an individual who resides with the qualified
dependants pursuant to section 122.6 of the Act. In July
2002 the Appellant did notify the Minister of her change of
address and asked them to no longer deposit the child tax credit
benefits in the Joint Account. The Appellant did not notify the
CCRA that she no longer lived with her qualified dependants.
Given that an individual can move residences, ask for a change in
mode of payment and still reside with the qualified dependants,
the Appellant's notification of July 2002 does not satisfy
the notification requirements of subsection 122.62(4) of the
Act. In addition, the Appellant clearly admitted on page
28 of the transcript that she did not notify the CCRA with
respect to the child tax credit benefits.
[15] Given the Appellant's failure to
notify the Minister that she ceased to be an "eligible
individual" pursuant to subsection 122.62(4) of the
Act, the Appellant's appeal should be dismissed,
without costs.
Signed at Vancouver, British Columbia, this 4th day of May
2004.
Little J.
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