Thank Goodness for Tax Court – Oil & Gas Remote Work Site

There is a misconception out there that the CRA is always right and that they only go after people that are dishonest in filing their taxes.  Well if you read the Tax Court of Canada Case reproduced below you will see that the CRA again is taking unreasonable positions on situations that should be painfully obvious.  Again the sheer stupidity is amazing.  This went through a team leader, Notice of Objection, Notice of Appeal, and then a Justice Lawyer.  Even with all this review it still went to Court.  I am happy to report that the Court ruled in favor of the taxpayer, but it should never have gone to Court.  This should have been settled without all the hassle by the CRA at the objection / appeal stage.

 

Document Excerpt:

Spanner v. The Queen. Tax Court of Canada (Informal Procedure), February 4, 2013. Neutral Cite: 2013 TCC 40. Court File No.: 2012-2239(IT)I. Graham, J. Employee Benefit – Employment at Special Work Site – Taxpayer was hired as a safety coordinator which required her to work at a job site located 45 to 90 minutes from Fort McMurray, Alberta. She lived in Fort McMurray during when she was working and in Kelowna, BC on her days off. Employer provided taxpayer with a $25,200 living allowance and she paid $2,000 per month for a rental unit in Fort McMurray. While living in her home in Kelowna, BC, the taxpayer lived with another family where she was not required to pay rent but provided household chores in lieu. Taxpayer had strong ties to BC including her phone number, mailing address, location of her doctor/dentist, driver’s license, and filed her returns based on BC residence. Taxpayer argued that pursuant to ss. 6(6) of the ITA she maintained a “self-contained domestic establishment” as her principal place of residence was in BC. Minister reassessed the taxpayer to include the allowance and argued that the Kelowna home was not a self-contained domestic establishment as she did not “as a general rule” sleep and eat there since she was in Fort McMurray 20 out of 28 nights. TCC concluded that: (a) the Kelowna home was a self-contained domestic establishment; (b) the Kelowna home was taxpayer’s principal place of residence (c) the term “maintain” in ss. 6(6) means “preserve for use” or “keep available” and there is no indication that taxpayer was required to pay for the Kelowna home to maintain it for purposes of s. 6(6) and;(d) if the Minister’s position was adopted, it would run afoul of the intent of ss. 6(6), which is to provide relief to those required to live away from their home at special or remote sites for employment. Appeal allowed with costs. I.T.A. s. 6(1), (6). 

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