Tax Time: To claim or not to claim

by James Menzies

WINNIPEG, Man. – Much has been made about the Wilkinson case, a ground-breaking ruling allowing a trucker to claim 50 per cent of up to $48-per-day in meal allowances rather than the traditional $33-per-day.

But some tax advisors who specialize in trucking are wary about filing for the increased returns.

Transport Financial Services (TFS) vice-president of operations, Scott Taylor, says that truckers are mistaken if they think that Revenue Canada will happily pay the extra money.

“I worry that people think that this is a new thing that has been approved. That’s not the case,” warns Taylor. “This is still a gray area and people are going to have to know what they’re getting into.”

Although Taylor makes his clients aware of the option, he says that it’s only fair to warn them of the possible consequences of filing a $48-per-day meal claim.

“The concern is, if you go for it you better have your nuts and bolts tight because obviously Revenue Canada has shown that they will go to tax court to fight this,” says Taylor.

He notes that although Don Wilkinson won his case, he was a company driver and owner/operators may have much more at stake.

“A self-employed person going down that path could win the battle on their meal claim, but what other things could they lose on?” he points out.

“A vindictive Revenue Canada auditor may lose the fight on meals, but he may win the battle on your service vehicle or your wages to your spouse or anything else that he may see in there.”

Although Revenue Canada auditors are notorious for nitpicking and they traditionally don’t enjoy being challenged, tax consultant Kent Bristo says he’s willing to go to court for his clients.

“Is it written in stone? No. Is it something that truck drivers should be looking at? Absolutely,” says Bristo. “Revenue Canada will say ‘No’ when you first file your adjustment request, but be prepared to go to tax court for it.”

Bristo is calling on truckers to take a stand, and he says he will go to tax court to represent them if he can file several appeals at once, lowering the cost for his clients to a worthwhile amount.

Dale Harris, client services manager for Canwest Tax and Business Consultants, agrees that truckers shouldn’t haphazardly claim $48 per day if they aren’t prepared to fight for it.

“Even though this is a positive decision in terms of what it’s done for the taxpayers, generally when Revenue Canada loses the battle, they change the rules,” says Harris.

“There’s probably going to be some kind of adjustment to the legislation coming out within the next tax year.”

In fact, one owner/operator recently told Truck News that Revenue Canada is still insisting $33 per day is the maximum allowable claim.

However, there may be another possible loophole to consider, according to Harris.

While perusing the fine print of the Income Tax Act, Harris says he noticed that anyone working in remote locations who cannot be reasonably expected to maintain a home or “domicile” is allowed to claim the entire $33 per day, rather than the 50 per cent allowable for truckers.

Ultimately, pursuing that option could prove to be more profitable for long-haul truckers than claiming 50 per cent of $48.

“I think this can almost be interpreted to apply to people in the trucking industry because they cannot reasonably be expected to maintain a domicile when travelling from Point A to Point B,” says Harris. “I think there’s a precedent there that may allow us to open up and claim the full $33 per day rather than just the 50 per cent.”


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