Date: 20000321
Docket: 1999-1675-IT-I
BETWEEN:
KIM LANDON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor Judgment
Lamarre, J.T.C.C.
[1] This is an appeal filed under the informal procedure from an assessment made by the Minister of National Revenue ("Minister") under the Income Tax Act ("Act") in respect of the appellant's 1996 taxation year. In computing her income for that year, the appellant reported income from an office or employment of $47,304.30 and claimed deductions for employment expenses in the amount of $6,577 (including allowable motor vehicle expenses, except fuel expenses). The appellant also claimed on top of that an amount of $17,577 for fuel expenses calculated on a cents per kilometre basis. The appellant applied a rate of 31 cents per kilometre to a total of 56,700 km driven for her employment, which resulted in her $17,577 claim.
[2] In assessing the appellant, the Minister disallowed the $17,577 in fuel expenses claimed but increased the amount of employment expenses allowed from $6,577 to $9,035 by including fuel expenses in the amount of $4,281.75. (In so assessing, the Minister also disallowed the $907 interest expense claimed by the appellant because the appellant was leasing the car in 1996. The appellant does not challenge this.) The employment expenses as revised by the Minister are summarized as follows in subparagraph 12(g) of the Reply to the Notice of Appeal:
g) the deduction for employment expenses claimed by the Appellant at line #229 of her income tax return for the 1996 taxation year and revised by the Minister in accordance with the reassessment of July 7, 1998 can be summarized as follows:
Employment Expenses
Oil Change $ 125.00
Maintenance & repairs 161.32
Insurance 1,098.18
Licensing & registration 100.00
Leasing costs 5,159.91
Gasoline 4,281.75
Sub total 10,926.16
Business portion of automobile expenses $7,957.78
Meals 310.23
Parking 85.00
Supplies 212.00
Cellular phone 470.00
Total expenses $9,035.01
[3] The only issue before me is the amount of fuel expenses that can be deducted by the appellant from her employment income. As already said, the appellant calculated the fuel expenses on a cents per kilometre basis. The appellant's father, Mr. John Grist, prepared her tax returns and the accompanying forms. He determined a rate of 31 cents per kilometre on the basis that this was the rate allowed for government employees, during the year at issue, for motor vehicle expenses. However he recognized in his testimony that this motor vehicle expense allowance for government employees covered not only fuel expenses but all other expenses related to the use of a car.
[4] Mr. Dave Young, an appeals officer with Revenue Canada at the relevant time, calculated the fuel expenses based on the number of litres consumed per 100 km. As the appellant did not provide any receipts, he relied on a Ministry of Transport guide indicating fuel consumption in litres per 100 km for the various makes and models of vehicles (Exhibit R-3).
[5] According to Form T2200 filed by the appellant with her tax return for 1996 (Exhibit A-5), she drove a 1995 Pontiac Grand Am. Exhibit R-3 shows that a four-cylinder Pontiac Grand Am consumes between 7.5 and 11.9 litres per 100 km, depending on whether the car is driven on the highway or in the city. This rate varies between 8.2 and 12.7 litres per 100 km for the six-cylinder model.
[6] Mr. Young applied a mid-range rate of 10 litres per 100 km and a reasonable cost of gas for 1996 of 55 ¢ a litre. In Exhibit A-5, the appellant declared total kilometres driven of 77,850 in 1996. Mr. Young therefore concluded that the appellant spent approximately $4,281.75 on fuel in that year (77,850 ¸10 = 7,785 litres consumed in the year at 55 ¢ per litre, giving a fuel cost of $4,281.75 ($7,785 x 0,55) for the year). This amount of $4,281.75 was added to the other car expenses to give total car expenses of $10,926.16. Mr. Young then established the business portion of that total on the basis of the number of kilometres driven by the appellant for her employment (56,700 km) as reported by her in Exhibit A-5, and arrived at a figure of $7,957.78 for allowable automobile expenses.
[7] Mr. John Grist has acknowledged that his calculations based on a cost of 31 cents per kilometre overestimated the real fuel costs incurred by the appellant. Moreover, the onus of proving that the Minister's calculations are wrong is on the appellant. In the absence of any supporting receipts or any reasonable alternative method of calculating the allowable fuel expenses, I can only conclude that the Minister's method is reasonable in the circumstances.
[8] The appeal is therefore dismissed.
Signed at Ottawa, Canada, this 21st day of March 2000.
"Lucie Lamarre"
J.T.C.C.
COURT FILE NO.: 1999-1675(IT)I
STYLE OF CAUSE: Kim Landon v. The Queen
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: March 13, 2000
REASONS FOR JUDGMENT BY: The Honourable Judge Lucie Lamarre
DATE OF JUDGMENT: March 21, 2000
APPEARANCES:
Agent for the Appellant: John Grist
Counsel for the Respondent: Susan Tataryn
Mila Mydliar (Student-at-law)
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
1999-1675(IT)I
BETWEEN:
KIM LANDON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on March 13, 2000, at Ottawa, Ontario, by
the Honourable Judge Lucie Lamarre
Appearances
Agent for the Appellant: John Grist
Counsel for the Respondent: Susan Tataryn
Mila Mydliar (Student-at-law)
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1996 taxation year is dismissed.
Signed at Ottawa, Canada, this 21st day of March 2000.
"Lucie Lamarre"
J.T.C.C.