Docket: 2013-3099(IT)I
BETWEEN:
EVA
OI HAR TSE-LAM,
Appellant,
and
HER
MAJESTY THE QUEEN,
Respondent.
Appeal heard on February 1, 2016, at
Toronto,
Ontario
Before:
The Honourable Mr. Justice Randall S. Bocock
Appearances:
|
For the
Appellant:
|
The Appellant
herself
|
|
Counsel for
the Respondent:
|
Aaron Tallon
|
JUDGMENT
IN ACCORDANCE with the reasons for judgment attached,
the appeal from the assessment for taxation year 2012 is hereby dismissed,
without costs, upon the following grounds:
(i)
the appellant adduced no evidence before the
Court which contests the Minister’s assessment;
(ii)
the appellant was assessed for no additional
taxes, interest or penalties beyond the income and taxes payable as reported by
the appellant in her return of income for the 2012 taxation year; and
(iii)
the appellant has not presented any discernible
argument or submission that her return of income for 2012, which was confirmed
as filed by the Minister of National Revenue, was incorrect or invalid.
Signed at Ottawa, Canada, this 10th day
of March 2016.
“R.S. Bocock”
Citation: 2016 TCC 61
Date:
20160310
Dockets: 2013-2522(IT)G
2013-3099(IT)I
BETWEEN:
EVA
OI HAR TSE-LAM,
Appellant,
and
HER
MAJESTY THE QUEEN,
Respondent.
COMMON
REASONS FOR JUDGMENT
Bocock J.
[1]
These appeals were heard together. The two
appeals involve Ms. Tse-Lam, the common appellant, but otherwise concern distinct
appeals.
I. 2012
Taxation year
[2]
Ms. Tse-Lam filed her 2012 return of income. She
reported $31,194 in income, comprised of CPP benefits, dividends, interest ($10,799)
and RRSP withdrawal ($15,000) and a small amount of other income. She was
assessed by the Minister of National Revenue (the “Minister”), as filed, on May
9, 2013. There was no additional tax liability assessed. There was however a
balance owing: $2,586.26. Although it is difficult to know beyond a calculated guess,
the Court surmises the balance owing caused Ms. Tse-Lam to commence an appeal.
This appears to have been prompted by the Notice of Confirmation which,
although it assessed Ms. Tse-Lam for no additional tax, did reflect the balance
due arising from her own calculations, report of income and corresponding
accrued interest. As well, Ms. Tse-Lam’s pre-existing disputes relating to
other taxation years, particularly taxation years 2006, 2007 and 2008 dealt
with below may have contributed to the 2012 appeal.
[3]
In any event, at the hearing, Ms. Tse-Lam presented
no discernible evidence, documents or arguments concerning the basis for her
2012 tax appeal. Respondent’s counsel conjectured that the appeal may have been
based upon the two largest sources of income: Canada Savings Bond (CSB)
interest of $10,799 and an RRSP withdrawal of $15,000.
[4]
The Reply contained assumptions of fact
concerning both these sources of income. As mentioned, these distinct sources
of income were reported by Ms. Tse-Lam herself and assessed as filed.
[5]
No evidence was tendered by Ms. Tse-Lam to
suggest that the Minister’s assumptions were incorrect or that any reported
error had been made by her.
[6]
On such basis, and consistent with the
discussion below concerning Ms. Tse-Lam testimony and arguments generally,
the Court dismisses the 2012 taxation year appeal.
II. 2006,
2007 and 2008 taxation years
[7]
On August 10, 2010, through her accountant Ms. Tse-Lam
submitted a voluntary disclosure of unreported income for the 2006, 2007 and
2008 taxation years (the “taxation years”). In doing so, Ms. Tse-Lam reported
the following rental property income, distributed to her through a testamentary
trust, domiciled in Hong Kong and relating to her mother’s estate:
|
Taxation year
|
Amount in Canadian dollars
|
|
2006
|
$58,412.00
|
|
2007
|
$27,549.00
|
|
2008
|
$27,386.00
|
[8]
As a result of the disclosure, the Minister reassessed
taxes and interest. Although penalties were not waived, none were ultimately
assessed. No operative tax treaty existed between Hong Kong and Canada for such
period. Even if one did exist, no evidence was tendered to suggest Ms. Tse-Lam
had paid withholding or other taxes in Hong Kong to afford her claim for
foreign income tax credits.
[9]
Both Ms. Tse-Lam and the Canada Revenue Agency
auditor testified at the hearing. It was clear from the testimony that Ms.
Tse-Lam struggles with the requirement, amount and logic of tax systems, both
in Canada and abroad. It was also clear that Ms. Tse-Lam believes she has been
the target of conspiracy, corruption and theft. As well, Ms. Tse-Lam believes
that the appeal process will continue indefinitely: she re-submitted many
documents (mostly correspondence) several weeks after the hearing. However, the
Court is required to base its findings on the evidence at the hearing. From
such evidence and testimony, the Court makes the following findings of fact:
1.
Ms. Tse-Lam admitted she was a Canadian resident
during the taxation years;
2.
Ms. Tse-Lam admitted her accountant filed the
disclosure, but alleges she had been “forced” to request it;
3.
The rental property income arose and was sent
from Hong Kong and Ms. Tse-Lam did not dispute its receipt; and,
4.
After firing the accountant who made the
disclosure, Ms. Tse-Lam filed her Notice of Objection.
[10]
The arguments submitted by Ms. Tse-Lam to the
Court in support of her appeal may be summarized, with generous amplification,
as follows:
1.
The Income Tax Act requires a Canadian taxpayer
to disclose annually all foreign income in respect of property held in excess
of $100,000.00. Ms. Tse-Lam never possessed such amounts of property because of
the Hong Kong testamentary trust. Therefore, Ms. Tse-Lam asserts she was never required
to file a T-1142 disclosing foreign property holdings. Similarly, she was and is
not required to report such rental property income because the sum remains less
than the $100,000.00 threshold annually;
2.
A “Trustee Ordinance” does not require a
beneficiary to report income received through, or by virtue of, a foreign
trust;
3.
The moneys within the testamentary trust have
been taxed in Hong Kong and should not be taxed in Canada as well; and,
4.
Ms. Tse-Lam is not able to pay the taxes and
interest.
[11]
For the reasons which follow the appeal
regarding the 2006, 2007 and 2008 taxation years is dismissed.
[12]
The evidence is clear, by virtue of her own
authorized (at the time at least) voluntary disclosure, that Ms. Tse-Lam
received the rental property income during the taxation years.
[13]
There was no tax treaty in place between Canada
and Hong Kong during the taxation years. In any event, there was no evidence of
any tax having been paid in Hong Kong on the rental property income.
[14]
In calculating a taxpayer’s income for any year,
the Income Tax Act provides in subsection 3(a) that a taxpayer must:
a) determine the total of all amounts each of which is the taxpayer’s
income for the year (other than a taxable capital gain from the disposition of
a property) from a source inside or outside Canada, including, without
restricting the generality of the foregoing, the taxpayer’s income for the
year from each office, employment, business and property. [underscoring
added]
[15]
In light of the fact Ms. Tse-Lam provided no
documentary evidence or other records to displace the assumptions of the
Minister (those assumptions based themselves upon Ms. Tse-Lam’s own voluntary
disclosure), the appeal cannot succeed. The taxpayer bears the burden of disproving
that the Minister’s assumptions are, on balance, untrue, irrelevant or
misapplied. Ms. Tse-Lam must have available sufficient records and information to
afford this Court some facility to compare such evidence with the assumptions
of the Minister. She had no such information; in the absence of such evidence,
the appeal must fail.
[16]
While there were no submissions on the issue of costs,
this was a General Procedure appeal and the Respondent is otherwise entitled to
costs. In the circumstances, costs are fixed at $250.00, which is well below
the tariff applicable. These fixed costs are subject to the Respondent’s right
to make further submissions in writing within 30 days of the date of these
reasons and corresponding judgment.
Signed at Ottawa, Canada,
this 10th day of March 2016.
“R.S. Bocock”
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