Tax Court of Canada Judgments

Docket: 2002-4789(IT)I

BETWEEN:

KENNETH RONALD HOWDLE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

____________________________________________________________________

Appeal heard on May 12, 2003, at Saskatoon, Saskatchewan.

Before: The Honourable Judge D.W. Beaubier
Appearances:
For the Appellant:	The Appellant himself
Counsel for the Respondent:	Anne Jinnouchi

____________________________________________________________________

JUDGMENT

The appeal from the reassessment made under the Income Tax Act for the 2000 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.

Disbursements are granted to the Appellant, fixed at $100.

Signed at Ottawa, Canada this 20th day of May, 2003.

"D.W. Beaubier"

J.T.C.C.

Citation: 2003TCC354

Date: 20030520

Docket: 2002-4789(IT)I

BETWEEN:

KENNETH RONALD HOWDLE,

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 Saskatoon, Saskatchewan, on May 12, 2003. The Appellant was the only witness.

[2]      Paragraphs 5 to 10 inclusive of the Reply to the Notice of Appeal read:

5.          In computing income for the 2000 Taxation Year, the Appellant:

(a)         deducted the amount of $2400 as a spousal support payment in respect of his former spouse, Amy Howdle (hereinafter "Amy"); and

(b)         claimed, in the computation of his non-refundable tax credits and tax payable, an amount of $6,140 for a wholly dependent person in respect of his son, Kenneth Howdle Jr.

6.          By means of a Notice of Reassessment dated November 20, 2001, the Minister of National Revenue (the "Minister") disallowed the spousal support amount and the claim for the wholly dependent person.

7.          The Appellant filed a Notice of Objection to the reassessment, received April 30, 2002.

8.          The Minister confirmed the reassessment by means of a Notification of Confirmation dated September 20, 2002.

9.          In so assessing the Appellant, the Minister made the following assumptions of fact:

(a)         the Appellant separated from Amy on May 1, 1998;

(b)         the three children (the "Children") of the marriage are:

                        Gregory James, born April 20, 1985;

Kenneth Ronald Jr., born October 10, 1982; and

Christine Amy, born April 2, 1981;

(c)         by written agreement dated May 1, 1998 (the "Original Agreement"), it was agreed that the Appellant pay Amy the amount of $600 monthly ($200/ child) for support of the Children and $400 monthly as spousal support (the "Spousal Support");

(d)         by written agreement dated January 28, 2000 and signed on February 10, 2000 (the "Second Agreement") the Appellant agreed:

(i)          upon sale of the house, to continue to pay Amy $600 per month ($300/child) for child support in respect of Kenneth Jr. and Gregory;

            and

(ii)         on November 1, 2000 to pay Amy $300 per month for child support in respect of Gregory and to continue until May 1, 2003;

(e)         The house referred to in (d) above was sold in May of 2000;

(f)          by Judgment of Divorce dated November 6, 2000 (the "Divorce Judgment"), the Appellant is required to pay Amy the sum of $158 per month as child support in respect of Gregory, commencing on October 1, 2000 and payable on the first day of each and every month thereafter for so long as the child remains a child within the meaning of the Divorce Act;

(g)         during the 2000 Taxation Year, the Appellant made support payments totalling $5,511 to Amy pursuant to the Original Agreement, Second Agreement and Divorce Judgment as follows:

Month	Amount Paid
January 2000	$1,000
February 2000	1,000
March 2000	1,000
April 2000	1,000
May 2000	340
September 2000	539
October 31, 2000	158
November 1, 2000	158
November 15, 2000	158
December 1, 2000	158
TOTAL	$5,511

  

(h)         the Appellant was required to make child support payments totalling $5,874 for the 2000 Taxation Year as follows:

Month	Amount Payable
January	$600
February	600
March	600
April	600
May	600
June	600
July	600
August	600
September	600
October	158
November	158
December	158
TOTAL	$5,874

           

(i)          the Appellant was required to make Spousal Support payments totalling $2,000 for the 2000 Taxation Year as follows:

Month	Amount Payable
January	$400
February	$400
March	$400
April	$400
May	$400
TOTAL	$2,000

(j)          the required child support amounts payable by the Appellant for the 2000 Taxation Year are in arrears;

(k)         the Appellant was living separate and apart from Amy at the time the payments were made and throughout the remainder of the year; and

(l)          the Appellant was required to pay support amounts in respect of both Amy and the Children during the 2000 Taxation Year.

B.         ISSUES TO BE DECIDED

10.        The issues are:

(a)         whether the Appellant is entitled to deduct a Spousal Support amount in respect of Amy for the 2000 Taxation Year; and

(b)         whether the Appellant is entitled to claim a wholly dependent person amount for Kenneth Jr. pursuant to paragraph 118(1)(b) of the Act in the computation of his non-refundable tax credits for the 2000 Taxation Year.

[3]      All of the assumptions except 9 (g) and 9 (j) were either not refuted or were supported by the evidence. In particular, the Court believes the Appellant's testimony about the receipts and does not accept the references to "mortgage" et cetera put on them by Mrs. Howdle. All the payments were for support or constituted advances for support amounts due later, as calculated hereafter.

[4]      Respecting assumptions 9 (g) and (j), the Court finds:

1.        January to April inclusive, the assumptions are supported by the evidence.

2.        From May, inclusive, on the Court finds as follows:

(i)	Payments made by the Appellant, January 1 to March 1 inclusive, to apply, as agreed with his former spouse to later months		$3,000
(ii)	Less, applied to May as assumed		- $1,000
Balance			$2,000
(iii)	Due for child support, as per assumptions June 1 to September 1 inclusive		$2,400
	Less previous surplus		- $2,000
Balance (negative)			- $400
(iv)	"Good Faith" September payment as per Exhibit R-2 Less balance (negative)		$539 - $400
Surplus balance			$139
(v)	Judgment, November 6, 2000, support due for Gregory October 1, November, 1 and December 1 (158 x 3)		$474
(vi)	Paid October, November, December (4 x 158)		$632
(vii)	In paragraphs (iv) and (vi) Paid	$139 + $632
		$771	$771
	Due (paragraph v)		$474
	Excess paid		$294

[5]      There is no evidence as to the payment source for the $340 in May, 2000, described in assumption (g). For this reason, it is ignored in the foregoing calculations.

[6]      Therefore the total paid as due by the Appellant in 2000:

                  1.         Spouse Support                                                     $2,000

                  2.         Child Support

                                  January to May                                                   3,000                                               June 1 to September 1                                                         2,400

                                       (surplus $139)

                                  October 1 to December 1 (158 x 3)                        474

                                                                                                          $5,874

           Claimable and allowed in appeal                                               $7,874

[7]      The Appellant is not entitled to claim Kenneth Jr. as a wholly dependent person in 2000 because he admitted that he was living in a common-law relationship that year when Kenneth Jr. moved in with them in October 2000.

[8]      The appeal is allowed as set forth in paragraph [6] and this matter is referred back to the Minister of National Revenue for reconsideration and

reassessment pursuant to these Reasons. The Appellant is awarded his disbursements for photocopying, postage et cetera, respecting this appeal which are fixed at $100.                          

Signed at Ottawa, Canada, this 20th day of May 2003.

"D.W. Beaubier"

J.T.C.C.

CITATION:

COURT FILE NOS.:

2002-4789(IT)I

STYLE OF CAUSE:

Kenneth Ronald Howdle v. The Queen

PLACE OF HEARING:

Saskatoon, Saskatchewan

DATE OF HEARING:

May 12, 2003

REASONS FOR JUDGMENT BY:

The Honourable Judge D.W. Beaubier

DATE OF JUDGMENT:

May 20, 2003

APPEARANCES:

For the Appellant:

The Appellant himself

Counsel for the Respondent:

Anne Jinnouchi

COUNSEL OF RECORD:

For the Appellant:

Name:

Firm:

For the Respondent:

Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada