Crowe v. The Queen, docket 1998-6-IT-I (Informal Procedure)

Date:20000725

Docket: 1998-6-IT-I

BETWEEN:

IAN D. CROWE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

(Delivered orally from the Bench at Halifax, Nova Scotia on July 19, 2000)

Hamlyn, J.T.C.C.

[1] This is in the matter of Ian Crowe and Her Majesty The Queen by way of a Notice of Appeal to an assessment.

[2] The Appellant deducted $14,774 from his net professional income. This amount was identified as equivalent to spousal RRSP.

[3] By Notice of Reassessment the Minister of National Revenue advised the Appellant that he had been denied the spousal RRSP deduction claimed against business income for the 1996 taxation year.

[4] The Appellant filed a Notice of Objection for the 1996 taxation year, and by way of Notice of Confirmation the Minister confirmed the reassessment.

[5] In his Notice of Appeal the Appellant submitted the following. In February 1997 he made an application for a spousal RRSP in the amount of $14,774. He states the amount was not in excess of his RRSP deduction limit, that his spouse was not of the opposite sex and he stated the bank did not allow him to purchase the spousal RRSP because, as he understood it, Revenue Canada's position was the legislation did not provide for same sex couple spousal RRSPs. He further stated to the court this morning: "I claimed it as a business expense, I set it aside, and let it accumulate independent." But he clearly emphasized to the court that it was not a business expense, it was just a place to place the money in the interim.

[6] He also stated clearly that he believes that this whole exercise, particularly under the Income Tax Act, in relation to how he was dealt with, is contrary to his basic rights as a Canadian citizen.

[7] The Minister says that the Appellant did not contribute to an RRSP in the name of the spouse and that as such disposes of the issue in terms of how the Tax Court is required to deal with it. The issue that I have to decide is whether he is entitled to deduct the amount identified as "Spousal RRSP."

[8] Section 171 of the Income Tax Act outlines what the Tax Court of Canada can do. And in terms of what the court can do, its primary requisite is to determine whether the assessment is correct. And if the assessment is correct, the court must dismiss the appeal. If the assessment is incorrect, the court may allow the appeal, vacate the assessment, vary the assessment or refer the matter back to the Minister for reconsideration and reassessment.

[9] Subsection 146(5.1) of the Income Tax Act reads as follows:

Amount of the spousal RRSP premiums deductible. There may be deducted in computing a taxpayer's income for a taxation year such amount as the taxpayer claims not exceeding the lesser of

(a) the total of all amounts each of which is a premium paid

by the taxpayer after 1990.

In this case the Appellant did not actually pay any RRSP premiums.

[10] The second part of the section is paragraph (b):

The amount, if any, by which the taxpayer's RRSP deduction limit for the year exceeds the amount deducted under subsection (5) in computing the taxpayer's income for the year.

[11] Therefore, in terms of computation the Appellant did not actually pay any RRSP contributions. Therefore the lesser of paragraph 146(5.1)(a) and 146(5.1)(b) is nil, regardless of the amount under paragraph 146(5.1)(b).

[12] Therefore, in terms of interpretation the Income Tax Act of Canada in relation to the facts and the assessment in this matter, the Appellant cannot deduct any amount, and the appeal is dismissed on that basis.

[13] As an additional comment, after considering all the matters that have been put to the court, including apparently the changed legislation in regard to RRSP contributions, I understand that legislation is not retroactive to the taxation year in question.

[14] Moreover, the Appellant has made a plea for a remedy on the basis of fairness. Such a plea is a matter of referral to the Fairness Committee. This court does not have any jurisdiction to consider that plea. I do not express any opinion as to any success one way or the other. I do know that it is not within the jurisdiction of this court to refer the matter to the Fairness Committee.

[15] It also appears to me that it is really a matter that is not so much for the Tax Court, but is possibly a matter that could have been the subject of litigation between the bank, the government and the Appellant and that would be found in another forum, but not this forum.

Dated at Ottawa, Canada, this 18th day of September 2000.

"D. Hamlyn"

J.T.C.C.