Plant v. R., [1998] 3 CTC 2353

O’Connor T.C.J.:

In this appeal the Minister of National Revenue assessed the Appellant for the 1994 taxation year, Notice of Assessment thereof having been mailed on December 11, 1995. In that assessment, the Minister included the amount of $22,165 received under the Canada Pension Plan for disability benefits.

The Appellant points out that this amount of $22,165 in effect applies not only to 1994, but to the three previous years, and he argues that the amount should have been prorated over all of the years in question rather than being included in one year.

I examined the Minister’s assessment. Section 56(1) of the Income Tax Act requires the taxpayer to include in income his benefits under the Canada Pension Plan Act. Section 120.3 of the Act requires the taxpayer to include amounts related to the previous taxation years. However, Section 56(8) of the Act provides as follows, or provides in essence, as follows:

Where an amount received by a person in the taxation year as a disability pension under the Canada Pension and a portion of the total of those amounts relates to one or more preceding taxation years, that portion related to previous years shall, at the option of the taxpayer, not be included in his income.

Now, I’ve examined very carefully the Notice of Assessment in question and it is worth quoting from it to enable a better understanding of how the assessment was made. It states, and it’s addressed to Mr. Plant:

You received a Canada Pension Plan lump sum disability payment. This payment was to compensate you for CPP, disability benefits you did not receive earlier. Since you received the payment for this reason, it is eligible for a special tax calculation which benefits you. We have reduced your 1994 income by $15,179, which is the amount of the payment that applies to previous years. We have calculated the tax on this amount as if you received payments in the years to which they apply. We have added the tax which is $1,531.00 to your total payable. Our adjustments have reduced the amount of tax you have to pay on this amount.

And if you look at the actual figures in the Notice of Assessment, everything that is stated there is true and is a proper application of Section 56(8) of the Income Tax Act.

Consequently the assessment is correct and the appeal is dismissed. I would add, however, that this taxpayer has certainly had an ongoing feud with not only the Minister of Revenue, but with other government offices. Considering all the factors of this case, I would strongly recommend that the Minister apply the Fairness Package and eliminate any interest on the assessment.

It is very clear also from Mr. Plant’s evidence that he believes certain credits and refunds to which he was entitled for the years 1991 and following have not been properly credited to him in the assessment. Once again, I would strongly recommend, and I mentioned this to counsel for the Minister, that a complete statement of account covering all the years in question, i.e. 1991 to 1994, be supplied to the Appellant, and hopefully this can be done as soon as possible, and perhaps the bottom line of who owes what to whom can be determined. I thank you both.

Appeal dismissed.