Date: 20000321
Docket: 1999-1675-IT-I
BETWEEN:
KIM LANDON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor
Judgment
Lamarre, J.T.C.C.
[1]
This is an appeal filed under the informal procedure from an
assessment made by the Minister of National Revenue
("Minister") under the Income Tax Act
("Act") in respect of the appellant's 1996
taxation year. In computing her income for that year, the
appellant reported income from an office or employment of
$47,304.30 and claimed deductions for employment expenses in the
amount of $6,577 (including allowable motor vehicle expenses,
except fuel expenses). The appellant also claimed on top of that
an amount of $17,577 for fuel expenses calculated on a cents per
kilometre basis. The appellant applied a rate of 31 cents per
kilometre to a total of 56,700 km driven for her employment,
which resulted in her $17,577 claim.
[2]
In assessing the appellant, the Minister disallowed the $17,577
in fuel expenses claimed but increased the amount of employment
expenses allowed from $6,577 to $9,035 by including fuel expenses
in the amount of $4,281.75. (In so assessing, the Minister also
disallowed the $907 interest expense claimed by the appellant
because the appellant was leasing the car in 1996. The appellant
does not challenge this.) The employment expenses as revised by
the Minister are summarized as follows in subparagraph
12(g) of the Reply to the Notice of Appeal:
g)
the deduction for employment expenses claimed by the Appellant at
line #229 of her income tax return for the 1996 taxation year and
revised by the Minister in accordance with the reassessment of
July 7, 1998 can be summarized as follows:
Employment Expenses
Oil
Change
$ 125.00
Maintenance & repairs
161.32
Insurance
1,098.18
Licensing & registration
100.00
Leasing
costs
5,159.91
Gasoline
4,281.75
Sub
total
10,926.16
Business portion of automobile
expenses $7,957.78
Meals
310.23
Parking
85.00
Supplies
212.00
Cellular
phone
470.00
Total
expenses
$9,035.01
[3]
The only issue before me is the amount of fuel expenses that can
be deducted by the appellant from her employment income. As
already said, the appellant calculated the fuel expenses on a
cents per kilometre basis. The appellant's father, Mr. John
Grist, prepared her tax returns and the accompanying forms. He
determined a rate of 31 cents per kilometre on the basis that
this was the rate allowed for government employees, during the
year at issue, for motor vehicle expenses. However he recognized
in his testimony that this motor vehicle expense allowance for
government employees covered not only fuel expenses but all other
expenses related to the use of a car.
[4]
Mr. Dave Young, an appeals officer with Revenue Canada at the
relevant time, calculated the fuel expenses based on the number
of litres consumed per 100 km. As the appellant did not
provide any receipts, he relied on a Ministry of Transport guide
indicating fuel consumption in litres per 100 km for the
various makes and models of vehicles (Exhibit R-3).
[5]
According to Form T2200 filed by the appellant with her tax
return for 1996 (Exhibit A-5), she drove a 1995 Pontiac Grand Am.
Exhibit R-3 shows that a four-cylinder Pontiac Grand
Am consumes between 7.5 and 11.9 litres per 100 km,
depending on whether the car is driven on the highway or in the
city. This rate varies between 8.2 and 12.7 litres per 100 km for
the six-cylinder model.
[6]
Mr. Young applied a mid-range rate of 10 litres per 100 km and a
reasonable cost of gas for 1996 of 55 ¢ a litre. In Exhibit
A-5, the appellant declared total kilometres driven of 77,850 in
1996. Mr. Young therefore concluded that the appellant spent
approximately $4,281.75 on fuel in that year (77,850 ¸10 =
7,785 litres consumed in the year at 55 ¢ per litre, giving a
fuel cost of $4,281.75 ($7,785 x 0,55) for the year). This amount
of $4,281.75 was added to the other car expenses to give total
car expenses of $10,926.16. Mr. Young then established the
business portion of that total on the basis of the number of
kilometres driven by the appellant for her employment (56,700 km)
as reported by her in Exhibit A-5, and arrived at a figure
of $7,957.78 for allowable automobile expenses.
[7]
Mr. John Grist has acknowledged that his calculations based on a
cost of 31 cents per kilometre overestimated the real fuel
costs incurred by the appellant. Moreover, the onus of proving
that the Minister's calculations are wrong is on the
appellant. In the absence of any supporting receipts or any
reasonable alternative method of calculating the allowable fuel
expenses, I can only conclude that the Minister's method is
reasonable in the circumstances.
[8]
The appeal is therefore dismissed.
Signed at Ottawa, Canada, this 21st day of March 2000.
"Lucie Lamarre"
J.T.C.C.
COURT FILE
NO.:
1999-1675(IT)I
STYLE OF
CAUSE:
Kim Landon v. The Queen
PLACE OF
HEARING:
Ottawa, Ontario
DATE OF
HEARING:
March 13, 2000
REASONS FOR JUDGMENT BY: The
Honourable Judge Lucie Lamarre
DATE OF
JUDGMENT:
March 21, 2000
APPEARANCES:
Agent for the
Appellant:
John Grist
Counsel for the
Respondent:
Susan Tataryn
Mila Mydliar (Student-at-law)
COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
1999-1675(IT)I
BETWEEN:
KIM LANDON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on March 13, 2000, at Ottawa,
Ontario, by
the Honourable Judge Lucie Lamarre
Appearances
Agent for the
Appellant:
John Grist
Counsel for the
Respondent:
Susan Tataryn
Mila Mydliar (Student-at-law)
JUDGMENT
The
appeal from the assessment made under the Income Tax Act
for the 1996 taxation year is dismissed.
Signed at Ottawa, Canada, this 21st day of March 2000.
J.T.C.C.
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