Date: 19980831
Docket: 97-2254-IT-I
BETWEEN:
WILLIAM C.J. GODWIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Beaubier, J.T.C.C.
[1] This appeal pursuant to the Informal Procedure was heard at Edmonton, Alberta on August 13, 1998. The Appellant and his accountant, John Hunter, testified.
[2] In his 1995 income tax return, the Appellant deducted $12,019 in legal fees he paid. He claimed to deduct them pursuant to subsection 60(o.1) of the Income Tax Act in respect to a pension benefit or a retiring allowance. The deduction was denied. He appealed.
[3] Paragraph 6 of the Reply to the Notice of Appeal contains the assumptions which were established to be correct by the evidence. They read:
6. In so reassessing the Appellant, the Minister made the following assumptions of fact:
(a) the Appellant was an employee and a shareholder of the Company;
(b) the Appellant remained an employee of the Company until 1989;
(c) the Appellant sought legal advise regarding wrongful dismissal and incurred legal fees totalling $12,019.21 between 1989-1992;
(d) the Appellant did not pursue legal action for wrongful dismissal from the Company;
(e) in 1994, the Company was sold and the Appellant received taxable dividend income in the amount of $31,875.00 in 1994 and $37,550.00 in 1995 from the Company;
(f) the Appellant was not in receipt of a pension benefit or a retiring allowance from the Company during the 1995 Taxation Year or in any of the 7 preceding taxation year; and
(g) the Appellant deducted the total legal fees incurred in the amount of $12,019.21 against the taxable dividends he received in the 1995 Taxation Year from the Company.
[4] The Appellant cannot change what happened between him and the corporation by an action in the Tax Court of Canada.
[5] For this reason, his appeal is dismissed.
Signed at Ottawa, Canada this 31st day of August 1998.
"D.W. Beaubier"
J.T.C.C.