Tax Forum
The Right Hand Giveth
FROM:
MAY 1998 ISSUE | BY
DON GOODISON
Two recent court cases illustrate the difficulty of applying the education tax credit in special circumstances. In
Brian James Hlopina v. Her Majesty the Queen [96-4485(IT)I], the Tax Court of Canada disallowed the taxpayer’s claim for an
education tax credit for his correspondence courses. Under paragraph 118.6(1)(b) of the
Income Tax Act, a student cannot have a full-time job and still be considered a full-time student. In the second case,
Stephen D. Rogers v. Her Majesty the Queen [97-443(IT)I], the Tax Court of Canada considered subparagraph 118.5(1)(a)(ii) and what constitutes an educational institution. An Employment Canada counsellor had told Rogers that
Memorex Telex Inc. was a certified institution under the Ministry of Human Resources and Development. Therefore, the portion of his fees for his course not covered by HRDC would be deductible. Revenue Canada denied Rogers’ claim because Memorex was not a certified institution and because he could not provide a T2202A form. On appeal, the Court allowed Rogers tuition tax credit, recognizing that he had relied on bad information to his detriment and had provided the only form he could under the circumstances. Revenue Canada was estopped from denying that Memorex is a certified institution since Rogers had taken the precaution of consulting a government employee and acted on that advice.
Don Goodison, CFP, FCGA, is a partner of Kemp Harvey Goodison, Certified General Accountants, in Burnaby, B.C. E-mail
goodison@axionet.com.