Date: 20020903
Docket: 2001-4532-IT-I
BETWEEN:
ISABELLE WONG,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
O'Connor, J.T.C.C.
[1] The following extracts from the Reply to the Notice of Appeal set forth the basic facts:
4. In computing income for the 1995 taxation year, the Appellant claimed a loss from commission income in the amount of $15,239.37...
...
6. The Minister assessed the Appellant for the 1995 and 1998 taxation years, Notices of Assessment thereof mailed on May 24, 1996 and July 19, 1999, respectively.
7. In assessing the Appellant for the 1995 taxation year, the Minister disallowed expenses with respect to the real estate commission in the amount of $15,239.37...
...
9. Subsequently, the Appellant served Notices of Objection for the 1995 and 1998 taxation years. After careful consideration, the Minister issued a Notification of Confirmation dated September 28, 2001 for the 1995 and 1998 taxation years.
10. In so assessing the Appellant, the Minister made the following assumptions of fact:
(a) in the 1995 taxation year, the Appellant reported gross income of $Nil from which she claimed expenses of $15,239.37, resulting in a loss of $15,239.37 from a purported business of being a self-employed real estate agent (the "Business");
(b) the Appellant held herself out to be variously, an associate broker with Home Life New World Realty ("Home Life"), or an independent broker;
(c) ...
(d) ...
(e) the Appellant failed to provide any listing agreements or contracts to support her claim that she was a real estate agent;
(f) the Appellant failed to provide any travel logs or diaries to support her claims for expenses related to the Business;
(g) the receipts and documents submitted by the Appellant in support of her claims for expenses were fragmentary, included personal expenditures and included receipts in the name of another person, or persons;
(h) in the 1995 taxation year, the Appellant incurred expenses for the operation of the Business in the amount of $Nil;
(i) in the 1995 taxation year, the expenses disallowed were not incurred for the purpose of gaining or producing income from a business or property, but were personal or living expenses of the Appellant;
(j) in the 1995 taxation year, the expenses were not made or incurred, or if made or incurred, were not made or incurred for the purpose of gaining or producing income from a business or property;
(k) in the 1995 taxation year, the Appellant had Canada Pension Plan benefits, Unemployment Insurance benefits, taxable dividends, interest income, taxable capital gains, other income and rental losses of $4,561.80, $985.00, $112.00, $12,758.13, $160.00 and ($26,655.00), respectively, resulting in total income/ (loss) of ($8,078.07);
(l) in the 1995 taxation year, the Appellant had carrying charges and interest expenses and other deductions of $2,252.43 and $0.18, respectively, resulting in net income of ($10,330.68);
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[2] There are also references in the Reply to the Notice of Appeal of capital losses from various years but it was agreed at trial that the only issue was the real estate expenses claimed. It was also conceded by counsel for the Respondent that indeed the Appellant was registered as a broker although there are references in the Reply to this not being the case.
[3] Without reviewing the evidence in the greatest of detail it is clear from the testimony and evidence produced that the Appellant had extremely inadequate books and records and receipts. The receipts which were furnished appear to relate to personal items. The Appellant tried to explain that some items of food were bought so that she could make meals at home for prospective clients. She also indicated some of the items although appearing personal, were actually gifts for clients.
[4] The major difficulty which the Appellant faces is that throughout the years 1994 to 1998 there were losses and in only year, namely 1997, there was an amount of gross real estate income of only $71.00. It is extremely difficult, with numbers of this nature, to concede that the Appellant was carrying on a bona fide real estate business. It is also to be noted that the Appellant had in the 1995 year various sources of income including as set forth in paragraph 10(k) of the Reply and she was able to eventually produce a net loss as a result of using rental losses and the real estate commission losses and interest expenses.
[5] The Appellant blames the lack of books, records and receipts principally on the fact that the Minister didn't get around to reassessing until 1999 and by then she had either lost her receipts or could not produce them for some reason. This is an inconvenience for taxpayers but taxpayers must keep all necessary papers until the time to reassess them has passed. The burden of proof of losses rests with the Appellant and has not been discharged. Consequently, this is no excuse for the Appellant.
[6] For all of the above reasons the appeal is dismissed.
Signed at Ottawa, Canada, this 16th day of September, 2002.
|
"T. O'Connor" |
J.T.C.C.COURT FILE NO.: 2001-4532(IT)I
STYLE OF CAUSE: Isabelle Wong v. The Queen
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: August 14, 2002
REASONS FOR JUDGMENT BY: The Honourable Judge O'Connor
DATE OF JUDGMENT: September 16, 2002
APPEARANCES:
Agent for the Appellant: Fred Yeung
Counsel for the Respondent: Joel Oliphant
COUNSEL OF RECORD:
Agent for the Appellant:
Name: Fred Yeung
Firm: Kei & Yeung Accountants
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-4532(IT)I
BETWEEN:
ISABELLE WONG,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on August 14, 2002 at Toronto, Ontario, by
the Honourable Judge Terrence O'Connor
Appearances
Agent for the Appellant: Fred Yeung
Counsel for the Respondent: Joel Oliphant
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1995 taxation year is dismissed for the reasons set forth in the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 16th day of September, 2002.
|
"T. O'Connor" |
J.T.C.C.