Price v. R., [1997] 2 CTC 2311

Teskey T.C.J.:

The Appellant, in his Notice of Appeal, wherein he appealed re-assessments for the years 1990, 1991 and 1992, elected the informal procedure. For the year 1990, there are two issues in front of me. The first issue is the business of a day care centre and expenses, and the second issue which is also the same issue in 1991 and 1992 is whether the Appellant is entitled to write off certain additional expenses as an independent contractor.

Dealing with the issue of the day care expenses, attached to his T1 tax return, it shows a total income of $2,363.40. It is under the statement “income statement 1990 Patricia A. Price and Rick Price,” with their Social Insurance Numbers.

There is nothing in front of me to back up the $100 expense for accounting and legal fees. There is nothing to back up the fire theft and liability insurance premiums, but I assume, at least, he would have some liability insurance if he was bringing day care children in, and I think I can even assume that it was an obligation.

Regarding interest and bank charges, there is no evidence before me how that figure is arrived at. There is no figure or evidence before me to help me figure out the light, heat and water charges. There is some evidence before me that would say that the $2,532 is one-third of the rent on the unit.

There is a claim for $246.23 for telephone expenses. Where that comes from, I do not have the slightest idea. I can speculate. Regarding maintenance and repairs, there is no attempt to justify that figure or where it is from. Regarding food expense, I do have the oral evidence that they had to buy food for the children but there are no receipts produced.

Against that, I also have the evidence of Rick Price. He says that if there had been any profit, it would have been his wife’s.

It certainly seems to me that between the two of them, they entered into a joint venture. She would provide the time and the husband provided the money, and any income would have been split 50/50.

There is no doubt about it that they did perform the service and they should have an opportunity to write off the legitimate expenses against that income. So, without having any evidence to prove these various statements, I am satisfied that there was reasonable expenses in the amount of the income and, therefore, it is a complete draw, and I am not prepared to give any more expense other than the actual income of $2,363.46, which I understand he has already in his reassessment.

Now, the other issue before me, namely, was the Appellant an employee? He paid union dues. He operated under a union agreement. He filed his Income Tax returns three years in a row saying I am an employee. In each return he has signed the same, “I hereby certify the information given on this return and in any documents attached is true, correct and complete in every respect. I fully disclose my income from all sources.”

He does claim that he had, outside the union contract, some additional expense and income, and he talks about being on call one week or one night every seven or eight weeks or five or seven times a year; that he did not have to do and that he got a small amount of income from it.

He also said that when he got what he called his cartage income, that was a figure that obviously he and his employer agreed upon and I asked him specifically, if you are on job “A” and you all of a sudden realize that part “B” is missing, that he would call into his employer and say, I’m sorry, part “B” is missing; they would say to him, if you go to job “C,” you can pick up part “B,” we have an extra one there, and he would go to the job site “C,” pick up part “B” and go back and that’s what he would get his $25 for. That obviously was an amount that was paid to him that was agreed between him and his employer. I have no knowledge whether it was paid to him as a non-taxable allowance or not. There is no evidence before me.

He also said that for the three-quarters of an hour that he took to go and get part “B,” meanwhile he was still receiving his hourly wage. So, it seems to me that he and his employer agreed that was a reasonable charge. He could have taken a taxi. He could have taken any means that he wanted to, to get that part “B” and, without some evidence from the employer, that that was included in his taxable income, I am not prepared, on the facts before me, to make that leap of faith on straight speculation.

In regards to the on-call part, he said that he gets paid two hours whether he is called or not. If he is not called, he gets two hours pay. That is employment income. If he gets called and the hours out on he job is four hours, he gets paid six hours and that is employment income.

The Appellant works out of his residence. He has to, in order to have the job. There is just no point in going out and running an office or anything, but he has to get his instructions every day or every week or after every job or he does not know where to go. Any expense for this, seven times a year, is just not justifiable. It is just part of the job of being an employee. He has to receive the instructions from his employer and he gets them and he goes and does his job.

I am not convinced that the 14 hours of work a year that he gets paid for, justifies any expense. It is employment income. He is, according to the agreement, reimbursed for travel time, and in different areas, he gets the reimbursement and that I am sure, without evidence to the contrary, that’s not taxable. So, I do not see where that leads to any tax relief. The fact that he gets the $25,1 am sure it is a non-taxable benefit that he is getting. It is an agreed upon amount. It is a reimbursement. I am sure that when he goes to Sudbury, and I’m not sure whether the figure is $70 or $65, that is a reimbursement, a non-taxable allowance. It was to reimburse him for the expense of getting to Sudbury and/or Peterborough. Under the circumstances, the appeals are dismissed.

Appeal dismissed.