Date: 20010524
Docket: 2000-3772-IT-I
BETWEEN:
EDWARD W. BOYNTON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Hamlyn, J.T.C.C.
[1] This is an appeal for the 1998 taxation year.
[2] The Minister of National Revenue (the "Minister") assessed the Appellant for the 1998 taxation year, Notice of Assessment thereof mailed March 22, 1999.
[3] The Minister reassessed the Appellant for the 1998 taxation year, Notice of Reassessment thereof mailed on August 10, 1999, to deduct the amount of $3,241.00 from the Appellant's taxable income. The $3,241.00 was received from the Workers' Compensation Board (the "WCB").
[4] The Minister further reassessed the Appellant for the 1998 taxation year, Notice of Reassessment thereof mailed on December 22, 1999, to increase the Appellant's taxable income by the amount of $3,241.00 and assessed the Appellant additional tax in the amount of $893.21, with applicable interest in the amount of $42.63.
[5] The Appellant appealed this reassessment to this Court. From his Notice of Appeal, adopted as part of his evidence, the Appellant stated:
My income tax was filed and completed for 1998 in which I received a return of $1,503.67 in the Spring of 1999.
I attended my bank on August 10, 1999 and discovered a deposit had been made into my account in the amount of $1,340.03 with the notation Govt/Gouv Canada - RIT/RIF. I immediately advised the teller there was a mistake and this money must have been put into my account in error. After numerous checks and waiting approximately three quarters of an hour, I was told there was no mistake. It was an income tax cheque placed into my account by Revenue Canada.
I contacted Revenue Canada and could not receive a proper explanation but was told a reassessment had been completed and I would be receiving documentation in the mail to support it.
On August 13th, 1999 I received my Notice of ReAssessment (See appendix 'A') in the mail immediately called the '1-800-959-8281' telephone number provided. I spoke to a female receptionist and questioned this process. She explained a reassessment was completed on my claim, randomly, as part of the day-to-day requirements of their office. I questioned the difference and the fact I could not believe the Government would decide to pay me $1,340.07 in addition to the $1,503.67 already received in the Spring. She continued to explain the process that money discovered owing to the people was indeed reimbursed to them, and they did not just deal with collecting more money as part of their random reassessment process. I again made a point of disbelieving my good fortune by telling them they should look into this because there has to be a mistake. I also stated "Should I invest this money in the event you come after me in a couple of months wanting the money back?" She assured me the process was accurate and complete, the money was indeed mine, and free to spend on whatever I wanted.
[6] The Appellant also stated from his Notice of Appeal:
...The response I received explaining the reasons my objection was denied does not answer any of my concerns or address the fact I was told "the money is indeed yours, feel free to spend it however you want". The process I am now forced to deal with is a result of an error made by CCRA. I tried to resolve the issue immediately with the CCRA Tax Centre upon receipt of the reassessed amount placed in my bank account. However, I was told at the time "that a reassessment was made and the additional money deposited into my bank account was in fact mine".
FACTS
[7] In reassessing the Appellant, the Minister assumed certain assumptions of fact:
(b) in the 1998 taxation year, the Appellant received T4 income from the Corporation of the City of Peterborough in the amount of $63,798.00;
(c) in the 1998 taxation year, the Appellant received T5 income in the amount of $42.00;
(d) in the 1998 taxation year, the Appellant received the amount of $3,241.00 from the WCB (the "Amount");
(e) in the 1998 taxation year, the Appellant's total income was $67,081.00;
(f) in the 1998 taxation year, the Appellant was entitled to deductions from total income for registered pension contributions, Registered Retirement Savings Plan contributions and union dues in the amounts of $1,941.00, $1,350.00 and $695.00, resulting in net income of $63,095.00;
(g) in the 1998 taxation year, the Appellant was entitled to deduct the Amount from net income, resulting in taxable income of $59,854.00;
(h) the Amount was compensation received under an employees' or workers' compensation law of the Province of Ontario in respect of an injury or disability;
(i) the Amount must be included in computing income in the year received;
(j) the federal tax payable by the Appellant for the 1998 taxation year which was unpaid on April 30, 1999 amount to $893.20 (the "Excess");
(k) prescribed interest on the Excess from the required filing date to the date of the assessment amounted to $42.63.
ISSUE
[8] The issues to be decided are whether:
(a) the amount was properly included in the calculation of total income, net income and taxable income in the 1998 taxation year; and
(b) the Appellant is liable to pay interest for the 1998 taxation year pursuant to subsection 161(1) of the Act.
CONCLUSION
[9] The Minister should not have deducted the $3,241.00 from the Appellant's income in the reassessment of August 10, 1999. The Appellant tried to tell the Minister immediately, however the further reassessment to correct the error took four months. The Appellant seeks a remedy from the first reassessment error, the time delay for the second reassessment as well as the misinformation disseminated by the CCRA official.
[10] The assessment, the first reassessment and the second reassessment were all completed within the limitation periods specified by the Act.
[11] The statements by the CCRA official relied upon by the Appellant to his detriment does not constitute a bar to the reassessment. The law is clear that if an employee of Revenue Canada imparts erroneous information to a taxpayer who acts on it to his or her detriment, that of itself does not bar the Minister from assessing the taxpayer's liability to tax, interest and penalties in accordance with the applicable statutory provisions.
DECISION
[12] The Minister is not bound by the errors of his officials in his administration of the Income Tax Act. The second reassessment is confirmed and the appeal is dismissed.
Signed at Ottawa, Canada, this 24th day of May 2001.
"D. Hamlyn"
J.T.C.C.