Date: 19991029
Docket: 98-1479-IT-I
BETWEEN:
PHILIPPE LAROSE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Somers, D.J.T.C.C.
[1] This appeal was heard at Ottawa, Canada, on October 6, 1999. It is an appeal under the informal procedure from an income tax assessment for the 1996 taxation year.
[2] In computing his income for the 1996 taxation year, the appellant reported an amount of $33,337.91 and deducted $13,129.00 for a net amount of $22,208.91 in respect of amounts received from the Société de l'assurance automobile du Québec (SAAQ).
[3] The point at issue is whether the appellant must include the amount of $22,208.91 in computing his income for the 1996 taxation year.
[4] In assessing the appellant's return of income for the 1996 taxation year, the Minister of National Revenue (the "Minister") made in particular the following assumptions of fact, which were either admitted or denied by the appellant:
[TRANSLATION]
(a) during a taxation year prior to the 1996 taxation year, the appellant's mother and sister were involved in a car accident which left them seriously injured; (admitted)
(b) during the 1996 taxation year, the appellant's mother and sister were completely dependent on the appellant with respect to their essential activities of everyday life; (admitted)
(c) during the 1996 taxation year, the appellant supported and provided care to his mother and sister; (admitted)
(d) during the 1996 taxation year, the appellant received an amount of $33,337.91 directly from the SAAQ as a reimbursement of expenses incurred for the personal home assistance which he provided to his mother and sister during the said taxation year; (admitted)
(e) the amount of $22,208.91 is not an amount which may be excluded in computing the appellant's income under subsection 81(1) of the Income Tax Act (the "Act") for the 1996 taxation year; and (denied)
(f) the amount of $22,208.91 must be included in computing the appellant's income for the 1996 taxation year. (denied)
[5] The appellant admitted all the facts on which the Minister relied in assessing his 1996 return of income.
[6] The appellant, a Quebec resident, said he received the sum of $33,337.91 under section 79 of the Automobile Insurance Act (c. A-25), which reads as follows:
79. Where, by reason of the accident, a victim's physical or mental condition warrants the continual attendance of another person or renders him unable to care for himself or perform, without assistance, the essential activities of everyday life, he is entitled to the reimbursement of expenses incurred for personal home assistance.
Expenses are reimbursed on presentation of vouchers and according to the standards, conditions and maximum amounts prescribed by regulation. However, no reimbursement may exceed $555 per week.
In the cases prescribed by regulation, the Société may replace the reimbursement of expenses by an equivalent weekly allowance.
[7] In claiming that this amount should be excluded from his income, the appellant relies on section 494 of the Quebec Taxation Act which reads in part as follows:
494. Income from personal injury award property. – An individual is not required to include in computing his income the income for the year from property acquired by or on behalf of a person as indemnity for, or pursuant to an action for, damages in respect of physical or mental injury to the person, or from any property substituted for the first property and any taxable capital gain for the year from the disposition of any such property,
. . .
[8] The Minister relies on subsection 81(1) of the Income Tax Act in computing the appellant's income for the year in issue.
[9] Subsection 81(1) reads as follows:
SECTION 81: Amounts not included in income.
(1) There shall not be included in computing the income of a taxpayer for a taxation year,
. . .
(q) Provincial indemnities – an amount paid to an individual as an indemnity under a prescribed provision of the law of a province . . . .
[10] Under section 6501 of the Income Tax Regulations, for the purposes of paragraph 8(1)(q) of the Income Tax Act, "prescribed provision of the law of a province" means:
(j) in respect of the Province of Quebec
(i) sections 5, 5b and 14 of the Crime Victims Compensation Act, S.Q. 1971, c. 18, and
(ii) sections 13 and 26, subsection 37(1) and sections 44 and 54 of the Automobile Insurance Act, S.Q. 1977, c. 68;
. . .
[11] Subsection 81(1) of the Income Tax Act lists items that are not to be included in computing a taxpayer's income. More specifically, paragraph 81(1)(q) of the Income Tax Act excludes in computing income indemnities paid under the prescribed law of a province. Under section 6501 of the Income Tax Regulations, in respect of Quebec, indemnities paid under the sections and subsections stated therein of the Automobile Insurance Act are not taxable. Those provisions concern compensation for bodily injury. Section 79 of the Automobile Insurance Act is not included in section 6501 of the Income Tax Regulations.
[12] Although the services which the appellant rendered to the members of his family are very laudable, the Court cannot disregard the Income Tax Act and the Income Tax Regulations.
[13] The appellant must include the amount of $22,208.91 in computing his income for the 1996 taxation year under section 3 of the Income Tax Act.
[14] The appeal is accordingly dismissed.
Signed at Ottawa, Canada, this 29th day of October 1999.
"J.F. Somers"
D.J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Translation certified true on this 31st day of August 2000.
Erich Klein, Revisor