The Tax Court of Canada has held in a decision delivered in late May that a student's status at a post-secondary institution depends on how that institution classifies the student, not whether he or she has attended full- or part-time studies.
The issue is important for clients who have children in post-secondary studies and who are claiming the education tax credit, which is only available to full-time students. (The credit is worth $400 a month for full-time students.)
The case dealt with the claim of taxpayer Kelly-Jean Archibald, who earned a master's of business administration (MBA) from the University of Liverpool on a distance-learning basis. (Archibald had several other degrees in education and is embarking on a career as a teacher at Humber College.) Archibald claimed that she spent about 30 hours a week studying for her MBA — and often more. Although the presiding judge, Justice Patrick Boyle, found her to be a highly credible witness, he concluded that the sheer number of hours spent studying did not decide the issue.
What was key, he found, was the classification used on the TL11A information slip issued by the University of Liverpool. That classification was "part-time" based on the fact that the university's on-campus MBA program is conducted over a one-year period. Distance MBA students, such as Archibald, have their courses spread over three years.
Justice Boyle speculated on the difficulties that would be encountered if the test of whether or not a student was engaged in full-time or part-time studies depended on the evidence of particular students.
Such an approach "would require this court to decide how much less than 100% full-time is still full-time and to draw a full-time/part-time cut-off line," the decision says. "Importantly, it would not be realistic to expect a court following such an approach to simply accept a particular student's very rough and otherwise unsubstantiated estimate of her average weekly hours devoted to program studies."
In finding for the government, Justice Boyle took special care to praise Archibald's presentation skills and credibility.
"She performed in the top of the top 1% of self-represented taxpayers appearing before this Court based on my 10-year judicial experience. She outshone some lawyers and many other agents and representatives who have appeared before me," he stated in the decision. "Her preparation and composure, the clarity of her written materials, her oral evidence and her submissions, and her ability to respond to questions in cross-examination, are no doubt a reflection of what a fine educator she must be."
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