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Ottawa giveth,
taketh away
Toronto Star, January 31, 2000
by Ellen Roseman
Bicycle courier Wayne Scott made legal history in 1998, when he won a tax
case allowing him to deduct $11 a day in meal costs.
Now Canada Customs and Revenue Agency says it will let all non-motorized
couriers, as well as rickshaw drivers, write off the extra ``fuel'' they
need to do their work, in much the same way as a car burns gasoline.
These people can claim the $11 daily deduction without showing receipts,
says Colette Gentes-Hawn, a spokesperson for the department (which used to
be called Revenue Canada).
Scott, however, is being held to a different standard.
After he was awarded a $2,450 tax exemption for food expenses in the 1994
tax year, Scott asked the government to reassess the taxes he'd paid during
his 15-year career as a courier.
The answer: no receipts, no writeoff.
This is unfair, Scott insists.
``Revenue Canada told me over and over again I didn't need to save receipts
because I couldn't claim the expenses,'' he says.
Lawyer Daina Groskaufmanis, who represented Scott in court, agrees he's being
treated unreasonably.
Canada Customs and Revenue is ``taking a very strict reading of expenses
to Wayne's detriment,'' says Groskaufmanis.
``He's not asking for a five-course meal at Canoe restaurant and two bottles
of wine.
``He can certainly substantiate his income for that period.''
The average person claiming work-related expenses doesn't need to include
receipts with a tax return, she points out.
And unless he or she is audited, the receipts never have to be produced.
So why must Scott back up everything he ate and drank at a time when the
government didn't consider fuel for bike couriers a legitimate expense?
``I think they can take a somewhat more relaxed attitude toward his lack
of receipts,'' says Groskaufmanis, a commercial litigator with Torkin, Manes,
Cohen & Arbus, a downtown Toronto law firm.
After reading about Scott's fight with the tax authorities, she called him
and offered to represent him free.
The time she spent was worth $3,000 to $4,000, she figures. As someone who
believed the tax treatment of business expenses was inequitable, Groskaufmanis
was delighted to succeed in court against three government lawyers.
She continued working for Scott when he went back to court to determine the
amount he would be allowed to deduct.
But last March, when the government made a settlement offer he felt was inadequate,
Scott decided to call the media.
Groskaufmanis promptly resigned.
``Settlement discussions are privileged,'' she says. ``I would be in an awkward
position if he disclosed anything.
``It was an amicable parting.''
Now 49, Scott retired in 1997 from his arduous job because his body couldn't
take the pounding. He now divides his time between tax appeals and a musical
career, working with several local blues bands.
It's no surprise Scott is also wrangling with the tax authorities over his
musical efforts. He wants to write off expenses, but he has never earned
money.
The tax rules don't allow a business to deduct losses year after year unless
it has a reasonable expectation of profit.
Scott has to prove he thought his unknown musicians could break through commercially.
One of them, harp player Michael Pickett, was nominated for a Juno award
but still doesn't have a distributor.
In person, Scott is bright, engaging and passionate about his cause. He thinks
the federal government is hypocritical in encouraging businesses to save
energy while penalizing messengers who make it possible.
``There are at least 500 bike couriers in Toronto each day,'' he says.
``You'd need 1,000 to 2,000 cars to do the same work. Everything about the
city would change.''
On a bicycle and later (after an injury) on foot, Scott worked 10 hours a
day without breaks, carrying 10 to 20 kilograms on his back.
He earned straight commission - ``the more you do, the more you make'' -
with no benefits such as employment insurance, workers' compensation or vacation
pay.
Considered self-employed for tax purposes, most foot and bike couriers don't
make enough to pay taxes at all.
Scott always filed tax returns, though he couldn't always come up with the
money he owed. In a good year, he earned $25,000.
He currently owes Revenue Canada $6,000.
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