Date: 20010406
Docket: 2000-1934-IT-I
BETWEEN:
FLORENCE WINT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
O'Connor, J.T.C.C.
[1] These appeals were heard at Toronto, Ontario on February 13, 2001 pursuant to the Informal Procedure of this Court.
[2] I quote the following from the Reply to the Notice of Appeal:
4. In so reassessing the Appellant for the 1996 and 1997 taxation years, by Notices of Reassessment dated October 13, 1998, the Minister:
a) in respect of her 1996 and 1997 taxation years, increased the Appellant's employment income to reflect the amounts received from Central Registry of Graduate Nurses (the "Employer") in the amounts of $18,010.00 and $15,345.00, respectively;
b) in respect of her 1996 and 1997 taxation years, the Appellant was allowed the amounts of $406.29 and $346.47, respectively, for Canada Pension Plan contribution on employment earnings in the calculation of non-refundable tax credits;
c) in respect of her 1996 and 1997 taxation years, the Appellant was allowed the amounts of $531.31 and $445.01, respectively for Employment Insurance premiums in the calculation of non-refundable tax credits; and
d) deleted gross and net business income for the 1997 taxation year.
5. In so reassessing the Appellant, the Minister made the following assumptions of fact:
a) for the 1996 and 1997 taxation years, the Appellant was employed by Employer;
b) during the 1996 and 1997 taxation years, the Appellant received employment income from the Employer;
c) in computing income for the 1996 and 1997 taxation years, the Appellant did not include in income the amounts of $18,010.00 and $15,345.00, respectively, received from the Employer;
d) in computing income for the 1997 taxation year, the Appellant claimed business expenses as per Schedule "A", attached hereto;
e) the expenses were not made or incurred, or if made or incurred, were not made or incurred for the purpose of earning income from a business or employment but were personal expenses of the Appellant.
[3] Further Schedule "A" to the Reply reads as follows:
Schedule "A" to
Florence Wint
Reply to Notice of Appeal
|
Supplies |
$3,390.00 |
|
|
Legal, accounting and professional fees |
50.00 |
|
|
Automobile Expenses |
||
|
Fuel and oil |
$2,880.00 |
|
|
Maintenance and repairs |
530.00 |
|
|
Insurance |
1,200.00 |
|
|
Licence and registration |
90.00 |
|
|
CCA claim |
3,600.00 |
|
|
Sub-total |
$8,300.00 |
|
|
Business portion 70% |
5,810.00 |
|
|
Total |
$9,250.00 |
[4] Consequently, as indicated in the Reply, the issues to be decided are as follows:
6. The issues are:
a) whether the amounts of $18,010.00 and $15,345.00 for the 1996 and 1997 taxation years, respectively, received by the Appellant from Employer is to be included as employment income of the Appellant;
b) whether the Appellant is eligible to deduct expenses in the amount of $9,250.00 in the 1997 taxation year;
c) in the alternative, whether the Appellant incurred the expenses for the purpose of earning income from employment; and
d) whether the disallowed expenses were reasonable in the circumstances.
[5] The Appellant is a nurse who performed her duties at various locations such as hospitals and patients' homes. She needs her car to travel from location to location on a regular basis.
[6] No receipts for any expenses were furnished which is a considerable weakness in the Appellant's case but not necessarily the end of it.
[7] Having considered the evidence presented, I have arrived at the following conclusions, namely:
(a) The amounts of $18,010.00 and $15,345.00 for the 1996 and 1997 taxation years are to be included as employment income of the Appellant in those respective years;
(b) The Appellant is not entitled to deduct the cost of supplies at $3,390.00 in the 1997 taxation year. Her evidence on this was that she was not quite certain of the nature of the supplies but that the $3,390.00 probably represented the cost to her of certain equipment such as a stethoscope, a blood pressure device and a thermometer, which she used in carrying out her nursing functions. It would appear that at best what the Appellant may have been permitted to deduct would be capital cost allowance on those items. However considering the lack of receipts and the evidence of the Appellant, I do not believe that that item of $3,390.00 should be allowed. However, I would allow the $50.00 deduction for legal, accounting and professional fees. The figure seems reasonable.
(c) With respect to the automobile expenses, I believe that considering the extensive use of the automobile in the Appellant's performance of her services, I would increase the business portion of the total expenses ($8,300.00) to eighty percent for a figure of $6,640.00.
[8] Consequently the total employment expenses for 1997 will be $6,640.00 plus the $50.00 for a total of $6,690.00.
[8] I have considered the Appellant's submission that in carrying out her duties she was more of an independent contractor entitled to deduction of expenses as opposed to a mere employee. However, applying all of the tests related to this determination comprising principally aspects of control by the employer, ownership of tools, chance of profit and risk of loss and whether the work was integrated with that of the employer, I can only come to the conclusion that the Appellant was truly an employee. However, I believe she is entitled to the deduction of the employment expenses allowed above in relation to the 1997 year.
Signed at Ottawa, Canada, this 6th day of April, 2001.
"T. O'Connor"
J.T.C.C.