Date: 20020306
Docket: 2001-1494-IT-I
BETWEEN:
THE ESTATE OF GERTRUDE BOUCHER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Angers, J.T.C.C.
[1] This is an appeal under the informal procedure from an assessment concerning the 1999 taxation year of the Estate of Dame Gertrude Boucher, which was represented at the hearing by the deceased's son, Laurent Boisclair.
[2] The assessment for 1999 was made by the Minister of National Revenue (the "Minister") on August 8, 2000. The appellant's claim for a disability tax credit was disallowed. In the Minister's view, the appellant was not entitled to claim both a disability tax credit under section 118.3 of the Income Tax Act (the "Act") and a medical expense credit in respect of amounts paid to nursing homes under section 118.2 of the Act.
[3] The appellant filed a notice of objection on October 12, 2000, and the Minister confirmed his assessment on January 29, 2001.
[4] The facts on which the Minister based his assessment were admitted by the appellant at the hearing. The facts in question are as follows:
[TRANSLATION]
(a) Gertrude Boucher is a person who had been suffering from a severe and permanent disability since 1990.
(b) For 1999, the appellant claims both the disability tax credit and a medical expense credit totalling $10,765.17.
(c) According to a document filed by the appellant, the amount of $10,765.17 breaks down as follows:
|
Accommodation: |
CHSLD René-Lévesque |
$4,789.00 |
|
|
Résidence Les Quatre Temps |
$3,375.00 |
|
|
|
|
|
|
Hôpital du Haut-Richelieu |
$880.00 |
|
|
|
|
|
Medical expenses |
|
$740.69 |
|
Private health services plan |
|
$570.48 |
|
premiums |
|
|
|
Dental care |
|
$260.00 |
|
Miscellaneous |
|
$150.00 |
|
|
|
|
|
|
Total |
$10,765.17 |
[5] The position of the appellant's agent is based on the fact that his mother required constant supervision by health care attendants during her stay at the residential centre as a result of her medical condition. Since she monopolized the health care attendants assigned to take care of her, most of the accommodation expenses she paid were purportedly used to pay the attendants. This led the appellant's agent to conclude that the accommodation expenses were in fact attendant expenses. Since the total accommodation expenses (the first three items in the previous paragraph) were less than $10,000, the appellant should be able to deduct the expenses under paragraph 118.2(2)(b.1) of the Act, which reads as follows:
(2) Medical expenses. For the purposes of subsection (1), a medical expense of an individual is an amount paid
. . .
(b.1) as remuneration for attendant care provided in Canada to the patient if
(i) the patient is a person in respect of whom an amount may be deducted under section 118.3 in computing a taxpayer's tax payable under this Part for the taxation year in which the expense was incurred,
(ii) no amount is included under section 63 or 64 or paragraph (b), (c), (d) or (e) in computing a deduction claimed in respect of the patient for the taxation year in which the remuneration was paid,
(iii) at the time the remuneration is paid, the attendant is neither the individual's spouse nor under 18 years of age, and
(iv) each receipt filed with the Minister to prove payment of the remuneration was issued by the payee and contains, where the payee is an individual, that individual's Social Insurance Number,
to the extent that the total of amounts so paid does not exceed $10,000 (or $20,000 if the individual dies in the year) . . . .
[6] The appellant's agent also claims that a representative of the Minister had confirmed in a telephone conversation he had with her that the two credits had been allowed and that a notice of refund would be issued. That conversation purportedly took place on November 28, 2000. On January 29, 2001, he received the assessment in issue, which confirmed the assessment of August 8, 2000. He further contends that a letter from the Canada Customs and Revenue Agency (formerly "Revenue Canada") confirmed that, if medical expenses were expenses for a health care attendant and were less than $10,000, the appellant could deduct both amounts. However, I wish to point out that the same letter states that the appellant could not deduct the disability amount if it deducted, as medical expenses, the remuneration paid to a health care attendant in excess of $10,000 or expenses paid for accommodation in a nursing home that related to the deceased's mental or physical impairment. The appellant could deduct the greater of the two amounts, but not both.
[7] The appellant's agent argues that, in principle, if a representative of the Minister states that a taxpayer may deduct both amounts provided the expenses for a health care attendant are less than $10,000, the Minister cannot subsequently change his mind.
[8] The appellant's agent further argues that the Minister's representatives are confused because the Act itself is very confusing. He asked the Court to be flexible in interpreting the acts and regulations and requested a refund of the $100 filing fee he had paid for his appeal.
[9] Counsel for the respondent submitted that the $9,044 in medical expenses paid for the residential centres are in fact expenses for accommodation at that type of centre and not expenses paid as remuneration for health care attendants. The appellant did not pay for a particular service but for a variety of services, which were the responsibility of those various residential centres. The receipts filed with the income tax return are receipts for accommodation and they indicate nothing else.
[10] He submitted that incorrect information provided by an official is not binding on the Minister. Since the amount of $9,044 relates to accommodation expenses, the Act does not permit a taxpayer to obtain the credit for mental or physical impairment.
[11] The respondent called Claude Paradis, financial and technical services director for CHSLD René-Lévesque, as a witness. The centre offers its clients long-term health and accommodation services. The centre takes care of room cleaning and provides nursing care, medical and pharmaceutical staff and occupational therapy-all the services needed by the persons housed by the Centre.
[12] A person receiving services from the Centre must pay the maximum provided for by the Act,that is, $1,400 a month or less, depending on his or her income. The actual cost varies between $4,200 and $4,300 per month. It is difficult to allocate costs because they are based not on services received by one individual but on services received by all persons living in the residence. In cross-examination, Mr. Paradis admitted that in theory, each patient required 4.2 hours of attendant care, but he said he did not know how many hours had been required by the deceased. These are theoretical concepts because the number of hours per type of care given varies from patient to patient. Mr. Paradis completed his testimony by saying that the Centre René Lévesque offers the services required by each patient while taking into account budget constraints.
[13] This therefore leads us to the resolution of the issue raised in this case, namely, whether both amounts are deductible.
[14] The receipts attached to the appellant's income tax return concerning the deceased's accommodation expenses do not provide us with any particulars on the services rendered. According to the receipts, the expenses were accommodation expenses. Even though the appellant's agent stated that a portion of the deceased's expenses had been used to pay health care attendants, he did not adduce any evidence to show what proportion of the expenses paid was for the attendants. The residential centres offer a variety of services, and the consideration paid by the patient was in exchange for those services combined. It is therefore very difficult to determine specifically the various types of care provided and the persons who provide them. I cannot determine on the basis of the evidence in its entirety what specific percentage was for the health care attendants since the receipts indicate only "accommodation".
[15] I subscribe to the following comments by Judge Margeson in Miles Estate v. Canada, [1999] T.C.J. No. 535, at paragraphs 40 and 45:
[40] In the case that was referred to, as in this case, one might provide a portion of the money for attendant care or it might be for a full time attendant or for other than a full time attendant. It need not be all one or the other but where you have a document that refers to it as "rent" and nothing in it that suggests attendant care, it is difficult to conclude that the amount of money that was paid was, on the face of it, paid for anything except rent.
. . .
[45] In a case of this nature, it is incumbent upon the appellant to establish on a balance of probabilities what the payment was for. Therefore, there must be a breakdown in the receipt to show what portion was for attendant care.
[16] For these reasons, I conclude that the expenses incurred by the deceased were paid for accommodation and not for the services of health care attendants as her agent would like.
[17] The provisions of the Act concerning the credits claimed by the appellant are paragraph 118.2(2)(b) respecting medical expenses paid for care in a nursing home and subsection 118.3(1) for the credit for mental or physical impairment. Without reproducing them in full, it is clear that, in the instant case, the appellant could, at first glance, obtain both credits, were it not for paragraph 118.3(1)(c), which reads as follows:
(1) Where
. . .
(c) no amount in respect of remuneration for an attendant or care in a nursing home, in respect of the individual, is included in calculating a deduction under section 118.2 (otherwise than because of paragraph 118.2(2)(b.1)) for the year by the individual or by any other person,
for the purposes of computing the tax payable under this Part by the individual for the year, there may be deducted an amount determined by the formula
A ´$4,118
where
A is the appropriate percentage for the year.
[18] I therefore think it is clear that the credit for mental or physical impairment can be claimed only if amounts representing the taxpayer's accommodation expenses at a nursing home have not been deducted as medical expenses.
[19] I acknowledge that, had those payments been made to a health care attendant and had been less than $10,000, the appellant would have been entitled to both deductions or credits. For the reasons stated above, that is not the case here.
[20] As for the statements made by an official of the Minister, the written statements in Exhibit A-1, that is, a letter dated September 22, 2000, and another dated January 23, 2001, which concern the interpretation of the Act, are not incorrect. It was only during a telephone conversation that a representative of the Minister apparently said that the appellant was entitled to both deductions. I concur with the following remarks by Judge Rip of this Court in Beal v. Canada, [1995] T.C.J. No. 1064, at paragraph 16, where he states:
That the appellant relied on the advice of the Minister of National Revenue's ("Minister") officials in claiming the tax credits does not assist him. The Minister cannot be bound by advice given by his or her officials when the conditions prescribed by the law were not met: M.N.R. v. Inland Industries Ltd., 72 D.T.C. 6013 at 6017, per Pigeon J.
[21] The appellant requested a refund of his $100 filing fee. The Tax Court of Canada Rules (Informal Procedure) address the Court's powers regarding the filing fee. The relevant provisions are as follows:
s. 4(6) The Court may, on application made by an individual in the written appeal referred to in subsection (1), waive the payment of the filing fee where the Court is satisfied that its payment would cause severe financial hardship to the individual.
s. 4(7) The Court shall decide whether to grant an application made under subsection (6) solely on the basis of the information contained in the written appeal referred to in subsection (1).
[22] The written appeal referred to in subsection 4(1) is an appeal made in writing and sets out, in general terms, the reasons for the appeal and the relevant facts. In light of those provisions and the fact that there is no information in the appeal enabling me to rule on this question, I cannot waive the appellant's filing fee.
[23] For these reasons, the appeal is dismissed.
Signed at Ottawa, Canada, this 6th day of March 2002.
|
"François Angers" |
J.T.C.C.
Translation certified true on this 19th day of November 2002.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
2001-1494(IT)I
BETWEEN:
THE ESTATE OF GERTRUDE BOUCHER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on January 30, 2002, at Montréal, Quebec, by
the Honourable Judge François Angers
Appearances
Agent for the Appellant: Laurent Boisclair
Counsel for the Respondent: Philippe Dupuis
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1999 taxation year is dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 6th day of March 2002.
|
"François Angers" |
J.T.C.C.
Translation certified true on this 19th day of November 2002.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]