Date: 20010704
Docket: 2001-544-IT-I
BETWEEN:
RICK BADGER,
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 Calgary, Alberta on June 21, 2001. The Appellant testified. The Respondent called the Appellant's former wife Sonia Badger.
[2] Paragraphs 3 to 8 inclusive of the Reply to the Notice of Appeal read:
3. In computing his income tax liability for the 1998 taxation year, the Appellant claimed:
(a) a personal credit for a wholly dependant person (the "Credit") in respect of his daughter, Meagan Jane Badger, (the "daughter") in the amount of $5,380.00, 17% of which is the actual non-refundable tax credit for the year; and
(b) a personal credit for the supplementary amount in the amount of $204.00, 17% of which is the actual non-refundable tax credit for the year.
4. The original notice of assessment for the 1998 taxation year was dated and mailed to the Appellant on May 20, 1999.
5. In reassessing the Appellant for the 1998 taxation year on March 6, 2000, the Minister of National Revenue (the "Minister"):
(a) disallowed the claim for the Credit for his daughter; and
(b) disallowed the claim for the supplementary amount.
6. In so reassessing the Appellant, the Minister made the following assumptions of fact:
(a) the facts admitted and stated above, some of which are repeated here for ease of reference;
(b) the net income of the Appellant for the 1998 taxation year was $28,703.00;
(c) the net income of the daughter for the 1998 taxation year was nil;
(d) the Appellant and the former spouse are the parents of the daughter;
(e) at all material times, the Appellant and the former spouse both share joint custody of their daughter;
(f) at all material times, the Appellant and the former spouse shared in the parenting of their daughter;
(g) during the 1998 taxation year, the daughter resided with both the Appellant and the former spouse;
(h) the daughter was wholly dependent upon the Appellant for support during the time periods in the 1998 taxation year when she resided with the Appellant;
(i) the daughter was wholly dependent upon the former spouse for support during the time periods in the 1998 taxation year when she resided with the former spouse;
(j) during the 1998 taxation year, the Appellant and the former spouse each maintained separate self-contained domestic establishments in which they lived and supported their daughter;
(k) the Appellant and the former spouse both claimed the Credit in respect of their daughter for the 1998 taxation year; and
(l) the Appellant and his former spouse are unable to agree with respect to whom may claim the Credit for their daughter.
B. ISSUES TO BE DECIDED
7. The issues to be decided are:
(a) whether the Appellant is entitled to the Credit in respect of his daughter in the amount of $5,380.00 for the 1998 taxation year; and
(b) whether the Appellant is entitled to a personal credit for the supplementary amount in the amount of $204.00 for the 1998 taxation year.
C. STATUTORY PROVISIONS, GROUNDS RELIED
ON AND RELIEF SOUGHT
8. He relies on, inter alia, subsection 118(4) and paragraphs 118(1)(b) and 118(1)(b.1) of the Income Tax Act (the "Act") as amended for the 1998 taxation year.
[3] Meagan is now 14. Her parents divorced in 1990 and joint custody was ordered. She lived with Sonia until January 1, 1996. Then at Sonia's request, due to Sonia's financial and emotional problems, Meagan moved in with her father, Rick, and she has lived with him since then. Every other weekend she visited Sonia at her home where she stays overnight. In 1998 these visits did not occur for six weeks because Meagan had a sprained ankle.
[4] In 1998 both Rick and Sonia claimed the "equivalent to spouse" personal tax credit which is in dispute in this case.
[5] In 1998, Rick did not claim the married amount, he was not married, Rick and Meagan were living in a self contained domestic establishment and Rick was supporting Meagan there.
[6] The question then is whether she was wholly dependant on Rick.
[7] On January 8, 1996, when Meagan moved in with Rick, Sonia and Rick drew up and signed Exhibit R-1. At that time Sonia gave up $500.00 per month child support which Rick was paying to her for Meagan's support. Exhibit R-1 reads:
This agreement made the 8th day of January, 1996
is an addendum to the Separation/Divorce Agreements between
BRIAN RICHARD BADGER and SONIA JANE BADGER
In reference to the sections outlining Custody Arrangements and Maintenance Fees, the following changes are agreed to by the two parties as pertinent to their daughter, MEAGAN JANE BADGER:
for the period 1 Jan. - 30 Jun. '96, Meagan's primary residence has been agreed to be that of Rick Badger's, with alternating weekend and liberal weekday visitations available to Sonia Badger
after summer vacation '96, a shared parenting regime will be scheduled whereby Meagan shall reside within each parental residence on an equally shared time basis, with whichever parent assuming responsibility for all Meagan's day to day requirements as she dwells with them.
there will no longer be an exchange of Maintenance funds, as per the outline above, but, as the higher income earner, Rick will be responsible for clothing, school and extra curricular activity expenses (each parent will be responsible for any vacation expenses while in their particular care).
both parties agree that Sonia Badger will claim Meagan as her dependant and shall, therefore, be entitled to receive the Child Tax Credit renumeration.
both parties shall maintain effective and open communication regarding Meagan's needs, or any subjects of interest/necessity affecting their parenting roles.
This agreement remains binding unless a dully [sic] signed modification is produced by the respective parties.
The parties have executed this Agreement as of the day, month and year first written above.
"Sonia Badger" "Rick Badger"
Sonia Jane Badger Brian Richard (Rick) Badger
[8] The Agreement does not refer to anything but the Child Tax Credit. Specifically, it does not describe the "spousal" credit. Sonia takes the words of the Agreement as including the spousal credit. Rick states that they do not, rather they argued about it back and forth each year until 1998. It was not agreed upon by Exhibit R-1, nor did Sonia and Rick agree on it. To the Court, the question falls within paragraph 118(1)(b), its meaning and the facts in this case.
[9] Rick's testimony, which is not refuted, and is accepted, is that he makes all of the decisions respecting Meagan's upbringing and supports her. Sonia pays for her board at Sonia's and Meagan overnights at Sonia's when she visits Sonia on alternate weekends.
[10] Thus, Sonia does not "support" Meagan when Meagan visits with Sonia. Rather Sonia paid for Meagan's food and any incidentals during each weekend visit every other week whether in 1998 or in other years after 1995. The word "support" respecting children is not limited to money (or to food or to shelter every other weekend). "Support" is defined by the Shorter Oxford Dictionary as:
"To furnish food or maintenance for; to supply with the necessities of life ... to keep up the strength of ... to sustain ... to keep ... from failing or giving way; to give courage, confidence or power of endurance to ... to preserve from failure ..."
That is "support" for a family member within the meaning of paragraph 118(1)(b) No doubt that can be shared by a child's parents, and is shared where they are living together. Similarly, it is the kind of "support" each gives to another spouse. But it does not occur on mere bi-weekly visits.
[11] That support is what Rick was giving to Meagan in 1998. Sonia was not giving that to Meagan in 1998.
[12] The Appeal is allowed. Rick is awarded $100.00 on account of out-of-pocket disbursements which he incurred respecting this Appeal.
Signed at Ottawa, Canada this 4th day of July, 2001.
"D.W. Beaubier"
J.T.C.C.
COURT FILE NO.: 2001-544(IT)I
STYLE OF CAUSE: Rick Badger v. Her Majesty The Queen
PLACE OF HEARING: Calgary, Alberta
DATE OF HEARING: June 21, 2001
REASONS FOR JUDGMENT BY: The Honourable Judge D.W. Beaubier
DATE OF JUDGMENT: July 4, 2001
APPEARANCES:
For the Appellant: The Appellant himself
Counsel for the Respondent: Michael Taylor
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-544(IT)I
BETWEEN:
RICK BADGER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on June 21, 2001 at Calgary, Alberta by
the Honourable Judge D.W. Beaubier
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Michael Taylor
JUDGMENT
The appeal from the reassessment made under the Income Tax Act for the 1998 taxation year is allowed and the reassessment is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
The Appellant is awarded the sum of $100.00 on account of out-of-pocket disbursements which he incurred respecting this Appeal.
Signed at Ottawa, Canada this 4th day of July, 2001.
|
"D.W. Beaubier" |
J.T.C.C.