Marples v. R. - TCC: Another Rule 58 application bites the dust - complaints about SIN taxes it seems

Marples v. R. - TCC:  Another Rule 58 application bites the dust - complaints about SIN taxes it seems

Marples v. The Queen (July 6, 2017 – 2017 TCC 129, Boyle J.).

Précis:  Mr. Marples was assessed tax and penalties in respect two sources of unreported income.  He ultimately accepted tax on both of the sources, in excess of $1 million of insurance commissions, but disputed the penalties.  He sought to have his appeal determined in part under a Rule 58 application in which he seems to suggest that the taxation of his commission income depended upon the use of the terms “social insurance number”, “Social Insurance Number” and “SIN” in various part of the Income Tax Act, Regulations and forms. Presumably he also wanted to argue that this confusion should relieve him of penalties imposed on such income.

Justice Boyle in a balanced decision rendered from the Bench concluded that the issue was not appropriate for a Rule 58 determination and dismissed the application.  The only sign of a certain judicial pique in the decision was an award of $1,650 to the Crown, payable within 60 days.

Decision:  Mr. Marples’ application, while long on invention, was short on clarity:

[1]             This is my decision on the Appellant’s motion of this morning. The Appellant has brought a Rule 58 motion asking the Court to determine the following two questions:

a.   Whether “Social Insurance Number”, referred to in s. 237(1) of the Income Tax Act (ITA) and styled in both upper and lower case letters, is to be distinguished from “social insurance number”, styled in lower case letters only, and found in a number of Canada Revenue Agency (CRA) forms. Specifically, whether a Social Insurance Number is assigned exclusively to an individual who is a “legal representative” within the meaning of s. 248(1) of the ITA, and a “social insurance number” is assigned exclusively to the holder of an “office” within the meaning of s. 248(1) of the ITA and s. 2(1) of the Canada Pension Plan (CPP).

b.   If the answer to question (a) above is yes, what CRA form should the Appellant use to report the income he receives in his status as a “legal representative” and identified by a SIN that is a “Social Insurance Number” styled in both upper and lower case letters.

Justice Boyle sought to ascertain the logic behind the application:

[5]             The determination of whether Mr. Marples has or has not exercised due diligence sufficient to satisfy the exculpatory language of the penalty provision in issue will be very much dependent upon his particular facts and circumstances. This will include, among other things, how credible the Appellant is in satisfying the Court that it was reasonable for him not to report this income because of the fact that the Income Tax Act and Canada Revenue Agency forms do not consistently capitalize the term “Social Insurance Number”, but at times use upper case and at times lower case, and that sometimes the acronym “SIN” is used without a proper definition. 

[6]             It may require the Court to go on to decide whether that confusion reasonably caused him to think he should characterize his insurance sales commission related income as “public money” as defined in the Financial Administration Act and that such income was, for that reason, not to be reported in his tax return. 

Justice Boyle concluded that this was not Rule 58 territory:

[8]             The issues in the Appellant’s two questions could arguably meet the requirements of Rule 58, in which a judge may order the determination of one or more questions. However, I believe that where, as here, questions of fact and the reasonableness of a taxpayer’s actions are what is actually in dispute, and may be expected to raise questions of credibility, these issues are all best left to the trial judge in the particular circumstances. 

[9]             I do not believe that these could properly be decided by the judge on a motion in any manner that will reduce the amount of time to hear and decide the motion and the remaining appeal.

[10]        Further, since the taxpayer agrees that his initial answers to his questions were wrong, the answers to them are no longer in dispute and need not be determined by the Court in order to resolve his appeal.

As a result the application was dismissed from the Bench with costs of $1,650 payable to the Crown within 60 days.