Extremely Important Judgement to Read and Understand

Note that this judgement is by Former Chief Justice Bowman, now retired.

I can not stress enough how important your audit trail bookkeeping is. We have provided a system and everyone needs to use it.

If you keep your records in at least our paper system, you will never have problems deducting your legitimate expenses.

Justice Bowman points out that you do not necessarily need the actual receipts. You just have to keep credible records.

And he makes the point, it is not that onerous to keep records.

So if you want to avoid tax problems, that will need solutions, how about emplementing the solutions before you have tax problems.

Dan White


It is ordered that the appeals from the assessments made under the Income Tax Act for the 1999, 2000 and 2001 taxation years are dismissed.

Signed at Ottawa, Canada, this 23rd day of September 2004.

“D.G.H. Bowman”

Bowman, A.C.J.

Citation: 2004TCC644

Date: 20040923

Docket: 2004-1206(IT)I








Bowman, A.C.J.

About proof of payment as evidence in court.

It boils down to this. I am sure that there are probably buried in the expenses claimed amounts that should be allowed, but I cannot determine what they are because they are mixed in with so many unproved or implausible claims.

[9]      The appellant came into court with a large box of receipts. They were grouped in bundles with adding machine tapes attached. Contrary to the allegations that the revenue authorities ignored his evidence or treated him unfairly, I find that Ms. Lo, the appeals assessor who dealt with his objection, made a serious and conscientious attempt to reconcile his claims with the receipts and she gave him ample opportunity to organize the receipts in an orderly and comprehensible way. She cited a number of instances in which she attempted to reconcile the amounts claimed under specific headings with the receipts, but was unable to do so.

[10]    As this court has said on a number of occasions there is no requirement that vouchers or receipts be provided for all expenditures claimed as deductions provided that the expenditures are proved by other credible evidence. I do not however think the appellant has passed even the very modest threshold of proving his case that I consider appropriate. It is worthwhile repeating what was said in Merchant v. The Queen, 98 DTC 1734:

[7] Where a large number of documents, such as invoices, have to be proved it is a waste of the court’s time to put them in evidence seriatim. The approach set out in Wigmore on Evidence (3rd Ed.) Vol IV, at s. 1230 commends itself:

s.1230(11): . . . Where a fact could be ascertained only by the inspection of a large number of documents made up of very numerous detailed statements – as, the net balance resulting from a year’s vouchers of a treasurer or a year’s accounts in a bank-ledger – it is obvious that it would often be practically out of the question to apply the present principle by requiring the production of the entire mass of documents and entries to be perused by the jury or read aloud to them. The convenience of trials demands that other evidence be allowed to be offered, in the shape of the testimony of a competent witness who has perused the entire mass and will state summarily the net result. Such a practice is well-established to be proper.

[8] This passage was cited with approval by Wakeling, J.A. in Sunnyside Nursing Home v. Builders Contract Management Ltd. et al., (1990) 75 S.R. 1 at p. 24 (Sask. C.A.) and by MacPherson, J. in R. v. Fichter, Kaufmann et al., 37 S.R. 128 (Sask.         Q.B.) at p. 129. I am in respectful agreement.

Some form of the method approved by Wigmore would have been appropriate here.

SOURCE: http://decision.tcc-cci.gc.ca/en/2007/2008tcc11/2008tcc11.html     Updated : 20080114

[12]    One problem faced by an appellant in a case of this sort is that if there is a series of excessive, implausible or unreasonable claims it casts doubt on all of the claims. In other words, once a pattern of implausibility or excessiveness is established the court is inclined to scrutinize with greater care claims that, standing alone, might be sustainable. In other words, any gaps left in the evidence are filled in, and any doubts resolved, in a manner that is consistent with the pattern. I discussed this point in greater detail in Orly Automobiles Inc. v. The Queen, [2004] G.S.T.C. 57.

[13]    I do not think it is a particularly onerous task for a person claiming employment expenses to keep a record and separate receipts as well as a log book of automobile expenses. That was not done and the evidence, even on the most relaxed and liberal view, does not permit me to find in the appellant’s favour.

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