Meberatu – Tax Court of Canada finds that an employee could deduct cell phone expenses

A personal support worker claimed around $900 a year in cell phone expenses as a deduction from her employment income on the basis that she was required by her employer to be able both to notify clients when she was going to be late and to report to her employer. She provided no documentary support.

Graham J stated that although he had the option to “not allow Ms. Meberatu any cell phone expenses on the basis that she has not proven that she incurred those expenses,” he instead chose to allow her $120 per year, stating:

This amount is a conservative estimate of Ms. Meberatu’s actual costs. I am not prepared to reward her failure to produce documents and provide a reliable breakdown of her employment-related cell phone use by using a middle or high estimate. If Ms. Meberatu wanted her income to be determined accurately, she should have provided a means for me to do so.

This case is intriguing not only because the taxpayer fared quite well (if in fact her expenditure was mostly for personal use) notwithstanding having lost, turfed or suppressed her records, but also because of the finding that there can be a cell phone deduction from employment income – perhaps under s. 8(1)(i)(iii) (“the cost of supplies that were consumed directly in the performance of the duties”)?

Neal Armstrong. Summary of Meberatu v. The Queen, 2017 TCC 211 under s. 8(1)(i)(iii).