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

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The Canada Income Company continues to pursue taxpayers who might have inappropriately claimed the Canada Emergency Response Profit (CERB) or its substitute, the Canada Restoration Profit (CRB). Eligible people may have acquired $500 per week offered they earned not less than $5,000 of web earnings within the prior 12 months.

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I just lately shared a narrative a couple of Cambridge, Ont., man who was in court docket 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 earnings within the prior 12 months. I later described the case of a tutor who allegedly earned $5,250 of earnings in money and was denied his declare for the CERB. Each these taxpayers misplaced their instances.

The newest 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 dwelling for some time because of the COVID-19 pandemic, which was of specific fear to him attributable to 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 house owners may survive. For the reason that taxpayer didn’t personal his taxi, and the proprietor of it refused to decrease his lease, he stopped working.

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In October 2020, the taxpayer utilized for the CRB. His request was accepted by the CRA with out evaluation, 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 earnings 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 Court docket 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, not less than 15 years previous and had a sound social insurance coverage quantity. To obtain the CRB, a taxpayer should have had stopped working attributable to COVID-19 and was obtainable and searching for work, however had skilled a discount in (self-)employment earnings by not less than 50 per cent in comparison with their common weekly earnings in both the earlier calendar 12 months or the 12-month interval previous to the applying date. The taxpayer should not have voluntarily give up their job, and should have had (self-)employment earnings of not less than $5,000 within the earlier calendar 12 months or the 12-month interval previous to their utility date.

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Throughout numerous calls with CRA brokers, the taxpayer in query right here cited a number of components explaining his determination to cease working in March 2020. First, he defined he had not labored since then attributable to 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, due to this fact, not taking as many taxis.

The CRA officer in control of the primary evaluation 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 apart from attributable to COVID-19.” The officer concluded the taxpayer was, certainly, in a position to work, however was not actively searching for work.

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A second evaluation was initiated by a unique 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 apart from COVID-19. “The taxpayer voluntarily (selected to) depart his employment in March 2020 with out having a medical advice or layoff attributable to COVID-19,” the officer wrote. “His area of employment (taxi) was definitely quieter in the course of the pandemic, however the crucial measures had been taken to make (the drivers’) work as protected 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 intervals, the taxpayer was not employed for causes associated to COVID-19. The taxpayer defined he determined to remain dwelling, quickly, in the beginning of the pandemic as a result of he had issues in regards to the little-known dangers of COVID-19, particularly in mild of his medical historical past. He additionally mentioned his intention in March 2020 was to return to work shortly, however this was not attainable since individuals had been working from dwelling and never taking taxis, so it was not worthwhile to rent a taxi to work as a driver.

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The choose 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 not less than attainable to conclude that he was not working for causes ‘associated’ to COVID-19,” the choose wrote. “In these circumstances, I discover it tough to just accept that this determination was ‘voluntary’ and unrelated to COVID-19, even within the absence of a medical advice.”

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The choose additionally famous the foundations don’t require that the “causes associated to COVID-19” be medical causes. The taxpayer mentioned he couldn’t earn earnings as a taxi driver due to the affect of the pandemic on his area of labor. The choose 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 choose, due to this fact, concluded that the CRA officer’s determination was unreasonable as a result of it didn’t correctly deal with the central and related points and issues of the taxpayer.

Whereas the taxpayer requested that the Federal Court docket itself acknowledge his eligibility for the CRB retroactively from Sept. 27, 2020, till Oct. 23, 2021, the court docket’s energy was restricted purely to figuring out whether or not the CRA’s determination was cheap. Because of this, the choose 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 Non-public Wealth in Toronto. [email protected]

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