‘Average Jane’ beats CRA ‘Tax Experts’ in Court Victory :CRA SOTW
Alan Baggett
By James Daw
A seasonal tax preparer has scored a victory for her husband and other
parents of secondary school students who take advanced courses.
Her family will finally get to claim a post-secondary tuition tax
credit for "Grade 9" piano lessons her son took while still in high
school in Etobicoke.
Stella Tarkowski challenged Canada Revenue Ageny for denying her
husband Marek the tax credit, and a judge of the Tax Court of Canada
has now ruled she was right, and tax "experts" were wrong.
Justice Wyman W. Webb ruled "it is the status of the course that is
being taken that determines whether or not it is a post-secondary
level course and not the status of the individual taking the course;"
and "the age of the person ... is not relevant."
Mateusz Tarkowski is now 18, taking music and computer science at the
University of Waterloo. Back in 2003 and 2004, he was a junior at
Michael Power/St. Joseph High School, taking piano lessons part-time
at Mississauga School of Music.
He had completed his Grade 8 piano certificate, which qualified him
for a Grade 12 high school credit. When he moved on to Grade 9 piano
and advanced music theory, his mother had him complete a tax return
and transfer to his father a tuition credit for about $200. The next
year he claimed and transferred a credit of about $3,500. Both claims
were later denied by the Canada Revenue Agency.
When students take post-secondary courses, they may transfer a credit
of up to $5,000 per year to a parent. The course must be provided by a
Canadian university, college, approved trade school or "other post-
secondary educational institution." The savings for a person who owes
federal and provincial income taxes is about a fifth of the expense
claimed.
In his judgment, Justice Webb citing the dictionary meaning of the
words education and institution, concluded the Mississauga School of
Music met the test in the Income Tax Act.
Stella Tarkowski says she came with her family from Warsaw 11 years
ago.
She had no legal training before appearing in court to parry arguments
with a lawyer from Justice Canada.
Her only knowledge of Canadian taxes came from classes she took with
tax return preparers Softron Tax and H&R Block Canada. She has only
ever worked part-time checking tax returns for an accounting firm that
serves Polish Canadians.
"I just read everything carefully, read the Income Tax Act," she says.
"This was not about the money, this was about the treatment I received
from the CRA. Every time I asked, the answer was no."
She says Tax Court "was very friendly for a person who doesn't know
much about the law and the courts:
"I took the stand, presented my case and showed the judge the
documents to show my son had received a (course) credit from school."
Gena Katz, executive director of the Ernst & Young LLP tax group, said
Tarkowski's story could be helpful to others: "There are likely folks
who have children enrolled in courses that qualify (as post-secondary)
but aren't taking advantage of the credit because they have no idea.
Then, of course, there are people who claim the credit, are denied and
don't go forward with an appeal."
Tarkowski's advice is to "just keep all of your documents, all the
receipts, and just don't give up."
James Daw, CFP, appears Tuesday, Thursday and Saturday. He can be
reached at Business, 1 Yonge St., Toronto M5E 1E6; at 416-945-8633; or
by email at jd...@thestar.ca.
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