AMENDED
REASONS FOR JUDGMENT
Russell J.
[1]
The following constitutes my reasons for
judgment in the appeal of Mr. Langboung (Appellant) under the federal Income
Tax Act (Act). The Appellant appeals the denial by the Minister of Revenue
(Minister) of the Appellant’s charitable donation claims for his 2002, 2003,
2004 and 2005 taxation years. The denied tax credits in respect of charitable
donations allegedly made by the Appellant total $5,050, $8,500, $5,044 and
$3,095 for these years respectively. The 2002 and 2003 taxation years were
reassessed beyond the Appellant’s applicable normal reassessment period and
accordingly the onus is on the Respondent Crown for the reassessment at issue
for each of those two years.
[2]
The Appellant represented himself at the hearing
of this informal procedure matter and he was his only witness. The Respondent
called no evidence. Certain documents were entered by the Respondent into
evidence with the consent of the Appellant.
[3]
The Appellant testified that he had had receipts
for the claimed charitable donations. The church he donated to had helped him
when he first came to Canada. The church, “Redeemers’ Victory”, in Ontario, is
no longer in existence. In cross-examination the Appellant further testified
that his givings to this church were in the form of cash and from time to time also
he would buy an item to donate such as a TV or microphone. He now has no
cancelled cheques; the boxes they were kept in have been misplaced. He states
he has lived in five locations within the last few years so has moved around
and his documents have become lost in the course of these moves. He testified
he thought he had filed all documents prior to his February 2009 notice of
objection. His notice of objection said he would submit documents, but there is
no record of anything having been submitted.
[4]
The Appellant testified he had retained an accountant
who prepared his returns. He trusted the accountant and so did not review his
returns. He was not aware that she subsequently was convicted for fraud. He
stated he had had a photocopy of all submitted documentation but that is lost too.
He had moved to Edmonton from Ontario in 2008. He agreed that his 2002 net
income was $26,102 and that he had claimed $5,050 charitable donation tax
credit for that year. He acknowledged for 2003 having total earnings of $40,966
and claiming $8,500 charitable donation tax credit. He likewise acknowledged
2004 net income of $43,920 and claiming a $5,044 charitable donation tax credit
and in 2005 having net income of $27,730 when he claimed charitable donation
tax credit of $3,095.
[5]
In initial argument the Appellant had no
submissions. The Respondent submitted that it had met the onus for opening the
reassessments for the 2004 and 2005 statute-barred years. There were no
cancelled cheques, in fact no supportive documentation whatsoever. There was a
long objection period but no documentation ever provided to corroborate any of
the claimed donations. Corroboration is required for cash gifts, gifts in kind,
particularly in view of relatively high claimed amounts in comparison with his
income. Unsubstantiated testimony is not enough.
[6]
As well there was nothing at all from his
church, which church now at least does not exist. There is no letter from
anyone previously there and no confirmation it was ever a registered charity.
[7]
Paragraph 118.2(2)(a) of the Act specifies that
a charitable gift is not to be included in total charitable gifts unless the
making of the gift is evidenced by filing with the Minister, “a receipt for the gift that contains prescribed information”.
Clause 152(4)(a)(i) of the Act specified that a statute-barred taxation year
may be opened if is shown that the taxpayer, “has made
any misrepresentation attributable to neglect, carelessness or wilful default
or has committed any fraud in filing the return or in supplying any information
under this Act”. And, clause 152(4.01)(a)(i) of the Act provides that a
statute-barred year being opened can only be opened to the extent of the
misrepresentation itself. The year cannot be opened as a whole.
[8]
Finally, federal Income Tax Regulations
subsection 3501(1) provides that a charitable cash gift receipt should include
certain information therein listed, including name and address of the
charitable organization, the organization’s registration number, the serial
number of the receipt, the place or locality where the receipt was issued, if
the gift was cash, the date or year the gift was received. The provision also
provides for similar requirements for receipts for non-cash charitable gifts.
[9]
Mr. Langboung in his concluding submissions
proposed that it was too much to ask someone to keep such documents as these,
dealing with receipts, for six or seven years. He has just lost track of them
and has been searching for them for the last three days. Also, at the objection
stage the Minister simply denied the claimed amounts. There was no letter from
the Minister saying the Minister had the documents and they were not enough.
[10]
In my view, in this appeal the Respondent’s reassessments
should be supported. There is a complete absence of evidence supporting the
Appellant’s uncorroborated oral testimony given under oath. To claim a charitable
gift tax credit the law clearly requires supportive documentation in the form
of receipts with prescribed information. Not only did the Appellant not have
even one receipt, he had no other documentation whatsoever; not even something
from the putative church in Ontario that was his supposed recipient of the
alleged charitable gifts.
[11]
Additionally, in my view the Respondent has
successfully established the opening of the two statute-barred years - 2002 and
2003 - for which reassessments also have been appealed in this proceeding. A
misrepresentation due to carelessness, negligence or wilful default for each
such year has been established by, again, the complete and utter absence of any
shred of documentation as required by law - or even third party testimony -
that would even begin to substantiate the Appellant’s statements in his tax
returns claiming he had made in claiming charitable donation tax credits for
each of those years.
[12]
The appeal accordingly is dismissed, as to each
of the appealed reassessments for the Appellant’s 2002, 2003, 2004 and 2005
taxation years, respectively.
This Amended Reasons for Judgment
is issued in substitution for the Reasons for Judgment dated September 22,
2017.
Signed at Ottawa, Canada, this day of October 2017.
“B. Russell”
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