Taxi driver takes on CRA over CRB eligibility and earns one other look

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Jamie Golombek: Choose guidelines that the tax company’s denial of the declare was unreasonable and sends it again for reassessment

The taxi driver stated he determined to remain house, briefly, at first of the pandemic as a result of he had issues concerning the little-known dangers of COVID-19, however then he couldn’t return after that as a result of nobody was taking taxis. Photograph by Postmedia

The Canada Income Company continues to pursue taxpayers who might have inappropriately claimed the Canada Emergency Response Profit (CERB) or its alternative, the Canada Restoration Profit (CRB). Eligible people might have acquired $500 per week supplied they earned at the least $5,000 of web revenue within the prior yr.

I not too long ago shared a narrative a few Cambridge, Ont., man who was in courtroom difficult the CRA’s determination that he was ineligible for the CRB in 2020 as a result of he didn’t earn $5,000 of revenue within the prior yr. I later described the case of a tutor who allegedly earned $5,250 of revenue in money and was denied his declare for the CERB. Each these taxpayers misplaced their instances.

The latest CRB eligibility determination was launched earlier this month, and concerned a Quebec taxi driver with 25 years of expertise who, on March 19, 2020, determined to remain house for some time because of the COVID-19 pandemic, which was of explicit fear to him as a consequence of his medical historical past.

His colleagues within the taxi trade subsequently instructed him it was not worthwhile to rent a taxi in the course of the pandemic and that solely taxi homeowners might survive. Because the taxpayer didn’t personal his taxi, and the proprietor of it refused to decrease his hire, he stopped working.

In October 2020, the taxpayer utilized for the CRB. His request was accepted by the CRA with out overview, and he started receiving the profit. Quick ahead to June 2021, after two separate evaluations of his file, when a CRA officer concluded the taxpayer had “voluntarily” left his job, and that his lack of employment and subsequent decline in revenue weren’t associated to COVID-19. Consequently, the CRA officer concluded the taxpayer didn’t qualify for the CRB.

The taxpayer appealed to the Federal Courtroom to find out whether or not the CRA’s determination to disclaim him the CRB was “cheap.”

Recall that again in 2020 and lasting till late 2021, the CRB was obtainable to taxpayers in the event that they had been Canadian residents, at the least 15 years previous and had a legitimate social insurance coverage quantity. To obtain the CRB, a taxpayer should have had stopped working as a consequence of COVID-19 and was obtainable and on the lookout for work, however had skilled a discount in (self-)employment revenue by at the least 50 per cent in comparison with their common weekly earnings in both the earlier calendar yr or the 12-month interval previous to the applying date. The taxpayer should not have voluntarily stop their job, and should have had (self-)employment revenue of at the least $5,000 within the earlier calendar yr or the 12-month interval previous to their utility date.

Throughout numerous calls with CRA brokers, the taxpayer in query right here cited a number of elements explaining his determination to cease working in March 2020. First, he defined he had not labored since then as a consequence of a restoration interval following surgical procedure for most cancers, in addition to medical suggestions he had acquired to not have direct contact with passengers. In a subsequent name, the taxpayer defined his work had ceased as a result of many individuals had been telecommuting and, subsequently, now not taking as many taxis.

The CRA officer accountable for the primary overview concluded the taxpayer was not eligible for the CRB as a result of he voluntarily left his employment, and selected to not work “for causes aside from as a consequence of COVID-19.” The officer concluded the taxpayer was, certainly, capable of work, however was not actively on the lookout for work.

A second overview was initiated by a special CRA officer. That officer additionally denied the taxpayer’s declare, discovering that, once more, he didn’t meet the CRB standards since he was not working for causes aside from COVID-19. “The taxpayer voluntarily (selected to) go away his employment in March 2020 with out having a medical suggestion or layoff as a consequence of COVID-19,” the officer wrote. “His discipline of employment (taxi) was actually quieter in the course of the pandemic, however the crucial measures had been taken to make (the drivers’) work as secure as attainable.”

The important thing query to be answered in figuring out CRB eligibility was whether or not, in the course of the numerous CRB durations, the taxpayer was not employed for causes associated to COVID-19. The taxpayer defined he determined to remain house, briefly, at first of the pandemic as a result of he had issues concerning the little-known dangers of COVID-19, particularly in gentle of his medical historical past. He additionally stated his intention in March 2020 was to return to work shortly, however this was not attainable since individuals had been working from house and never taking taxis, so it was now not worthwhile to rent a taxi to work as a driver.

The decide felt these statements had been extremely related to find out whether or not the taxpayer was not working in October 2020 for causes associated to COVID-19. If the state of the taxi trade because of the pandemic within the taxpayer’s metropolis again then was such that he would lose cash if he labored, “it appears to me at the least attainable to conclude that he was not working for causes ‘associated’ to COVID-19,” the decide wrote. “In these circumstances, I discover it tough to simply accept that this determination was ‘voluntary’ and unrelated to COVID-19, even within the absence of a medical suggestion.”

The decide additionally famous the principles don’t require that the “causes associated to COVID-19” be medical causes. The taxpayer stated he couldn’t earn revenue as a taxi driver due to the influence of the pandemic on his discipline of labor. The decide felt it was as much as the CRA agent to “meaningfully assess this assertion,” one thing he felt the CRA didn’t absolutely do. The decide, subsequently, concluded that the CRA officer’s determination was unreasonable as a result of it didn’t correctly handle the central and related points and issues of the taxpayer.

Whereas the taxpayer requested that the Federal Courtroom itself acknowledge his eligibility for the CRB retroactively from Sept. 27, 2020, till Oct. 23, 2021, the courtroom’s energy was restricted purely to figuring out whether or not the CRA’s determination was cheap. Consequently, the decide despatched the matter again to a different CRA officer for redetermination. The taxpayer was additionally awarded prices of $1,875.

Jamie Golombek, CPA, CA, CFP, CLU, TEP is the managing director, Tax & Property Planning with CIBC Personal Wealth in Toronto. [email protected]

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