Charitable giving tax shelters

Income tax policy, rules, problems, strategy and software. Property and consumption taxes too.

Postby Norbert Schlenker » 02 May 2006 14:21

There were a series of cases working their way through the courts re buy low donate high arrangements, all a few years old, all involving AFAIK art. Some taxpayers (Klotz, Tolley, Quinn, Nash) won judgments in Tax Court but the Federal Court of Appeal found for the Minister when he appealed. The taxpayers asked for leave to appeal to the Supreme Court.

On 20 April, the Supremes turned them down. The FCA judgments therefore apply and the Minister's assessment of fair market value as the price the taxpayers paid for the art, not the value reflected on the donation receipt, stands.
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Postby smelly » 02 May 2006 17:23

Norbert Schlenker wrote:the Supremes turned them down


Do you know if any of the Healthcare/Medical versions of these things have been rolled back and or appealed? I guess the principle is the same.
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Postby Norbert Schlenker » 03 May 2006 23:50

I expect they're all in process. These art flip cases are from 1999 so it took seven years for CRA to get their way. I assume CRA will also attack the drug and software inventions of last year, which used an unrelated :roll: trust in an attempt to get around what is now in the ITA.
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Postby Bylo Selhi » 28 Nov 2006 11:00

Singh promotes tax shelter scheme
A man the Ontario Securities Commission disciplined three times is now promoting a charitable tax shelter that experts warn could run afoul of federal tax laws. David Singh of Thornhill was forced to sell Fortune Financial Corp. and Infinity Mutual Funds Management Inc. in 2000. Fortune once had a 700-strong sales force, but was in danger of disintegrating after the third set of allegations from the securities commission, which would later fine Singh and suspend him from securities trading for five years...

Singh's tax shelter requires a large leap of faith in the fallen executive. The program marketed under the banner of Destiny Gifting Initiatives involves putting up a $2,500 security deposit. This money is to be used to secure, and if all goes well, repay a $10,000 loan 10 years later. Destiny Health & Wellness Foundation would issue a tax receipt for $10,000, or however much in loans a donor wished to secure. Then, come spring, an Ontario donor would claim a credit to produce a $4,400 tax refund, more than the $2,500 security deposit. A contract makes the donor responsible for repaying the $10,000 loan if unnamed investment managers fail to generate spectacular returns — more than 22 per cent a year after taxes — on the $2,500 security deposit...

Law professor Daniel Sandler commented after quickly reading the Destiny material that the business risk should raise red flags for donors, while the structure of the program is likely to attract questions from revenue agency auditors. "It becomes an interesting question how $2,500 invested in whatever form of investment ... is going to generate sufficient returns," said Sandler. Regardless, he added, "you are definitely going to be reassessed; I say that with almost 100 per cent certainty."...
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Postby Bylo Selhi » 16 Dec 2006 13:09

Tax collector cracks down on medicine for charity
Canada Revenue Agency is pouncing on taxpayers who donated pills for profit in 2003 and is warning that tax refunds are in jeopardy. One Saskatchewan taxpayer claimed $56,621 in donations in 2003. He has been told he may get credit for only $667. That's a fraction of what he paid tax-shelter promoter Canadian Gift Initiatives Inc. of Mississauga for 1,600 doses of medicine for donation to charity. "It is our position that the amount the donor paid in excess of the fair market value represents, among other things, a fee paid for purchasing a tax credit advantage," Andrew Dawson of CRA's tax-avoidance section in Regina, wrote on Dec. 1.

CGI communications manager Sonya Strand said in an email yesterday company officials "do not agree with the position and conclusions in CRA's correspondence." CRA's position could be challenged in court — at considerable expense — but the taxpayer will have to pay a substantial tax bill now to avoid interest charges if he happens to lose the lengthy appeal process. Dawson allowed the taxpayer 30 days to respond before a formal notice of reassessment is issued. A charitable fund-raiser supplied a copy of Dawson's letter, with the name and address of the taxpayer obscured. Canadian Gift Initiatives committed to set up a legal defence fund, but the company was dissolved in August of this year...

As for the current crop of [s]scams[/s]schemes:
Several promoters are offering a new generation of charitable tax shelters that make use of loans and high-risk investments or complicated trust arrangements to produce a larger tax refund in the short term than participants put up in cash. Tax experts — and CRA — warn the risks of tax audits, legal bills and financial losses are high, and say people should get advice before using such programs.
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Postby Bylo Selhi » 16 Dec 2006 13:25

And another piece, Bad shelters: charitable scams under scrutiny
Confronted with sales pitches from aggressive promoters, people make judgments those with more experience wouldn't make, says chartered accountant Cheryl Mont. "Some were being foolish and greedy but many believed what they were told." At the height of the frenzy, brazen promoters advertised openly on Web sites that money was earmarked to help clients fight the inevitable court challenges. Ottawa-based tax lawyer Paul DioGuardi says taxpayers can stop the interest-rate clock at any time by paying "on protest" the taxes demanded when first reassessed. If they win in court, they get the tax back with interest (itself taxable). Once audited, it's too late to apply for the tax amnesty DioGuardi's firm specializes in. "People don't want to correct these things ahead of time," he says, "They're true believers. Like the de-taxers, you can't convince them they're wrong. They don't realize how much they're hurting themselves financially."
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Postby Bylo Selhi » 28 Apr 2007 12:44

Charity tax dodge entangles parish
A small Greek Orthodox church in Toronto has been hijacked by a fundraising company that used the church's good name to issue $273 million in apparently phoney charitable tax receipts over the past five years. It's part of a dubious tax shelter scheme cooked up by a Concord, Ont., company that promised to spread relief to the world. Some medical supplies, comics and crayons were distributed, but nothing on the scale that $273 million would buy. "We were absolutely stunned when we found out about this," said Bill Arvanitis, a long-standing member of All Saints Greek Orthodox Church near Bayview Ave. and Finch Ave. E. Arvanitis is part of a new board of directors that recently took office. "Our little parish is struggling to meet its needs. I can tell you we did not receive $273 million in donations."

Federal officials estimate the scheme may have deprived government coffers of more than $100 million in unpaid taxes. The Canada Revenue Agency has begun tax audits on almost 3,000 donors to the "All Saints Giving Trust" – the tax shelter created by the fundraiser...

How is ICC Worldwide Missions responding to threats from CRA? According to ICC documents they are selling donors a $935 warranty per each $3,000 contribution. "We are excited to announce ... a warranty protection program," ICC stated last year. The program boasts it will ensure that if a donor ends up paying more taxes as a result of CRA determining the goods were worth much less, the insurance plan will reimburse the donor.
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Postby Pickles » 28 Apr 2007 15:46

Bylo Selhi wrote:Charity tax dodge entangles parish
A small Greek Orthodox church in Toronto has been hijacked by a fundraising company that used the church's good name to issue $273 million in apparently phoney charitable tax receipts over the past five years. It's part of a dubious tax shelter scheme cooked up by a Concord, Ont., company that promised to spread relief to the world. Some medical supplies, comics and crayons were distributed, but nothing on the scale that $273 million would buy. "We were absolutely stunned when we found out about this," said Bill Arvanitis, a long-standing member of All Saints Greek Orthodox Church near Bayview Ave. and Finch Ave. E. Arvanitis is part of a new board of directors that recently took office. "Our little parish is struggling to meet its needs. I can tell you we did not receive $273 million in donations."

Federal officials estimate the scheme may have deprived government coffers of more than $100 million in unpaid taxes. The Canada Revenue Agency has begun tax audits on almost 3,000 donors to the "All Saints Giving Trust" – the tax shelter created by the fundraiser...

How is ICC Worldwide Missions responding to threats from CRA? According to ICC documents they are selling donors a $935 warranty per each $3,000 contribution. "We are excited to announce ... a warranty protection program," ICC stated last year. The program boasts it will ensure that if a donor ends up paying more taxes as a result of CRA determining the goods were worth much less, the insurance plan will reimburse the donor.



No mention of who was on the previous board of the church or explanation of why they didn't notice the $132 MILLION in donations "given" to the church in 2003.
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Postby Bylo Selhi » 29 Sep 2007 09:48

$1.4B tax scams nail donors
Canada's coffers have been cheated of more than $1.4 billion by scams that provided taxpayers with inflated charitable receipts they used to reduce their income tax. From coast to coast, donors wrote cheques to charities and tax scheme promoters that boasted they were saving the deathly ill, the poor and disabled, overseas and in Canada.

Now, at least 106,000 individual Canadians are learning the Canada Revenue Agency considers these schemes a sham, and wants to claw the money back. Some also are being hit with major financial penalties. "We are going after these schemes. Everything we have looked at we have reassessed. We are very serious about this," said Claude St. Pierre, director of compliance strategy for the revenue agency. The taxman is warning all Canadians and charities not to get involved with these shelters...
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Postby beaverlodge » 01 Oct 2007 11:41

Let us not forget that many of these schemes had tagged on approvals from high end law firms.

These approvals were added on confidence boosters for consumers and advisors who forgot their history and or did not give a damn.

Speakers who pushed these, advisors who sold them, regulators who allowed them and consumers who bought them deserve each other.

They are not a small group.

But..............more business for the lawyers working both sides of the street. :(
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Postby kcowan » 01 Oct 2007 14:57

beaverlodge wrote:Speakers who pushed these, advisors who sold them, regulators who allowed them and consumers who bought them deserve each other.

If it sounds to good to be true.... :roll:
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Postby yielder » 22 Oct 2007 07:29

Questionable donations trapping thousands of Canadians

Thousands of Canadians are having tax returns reassessed for donation schemes that promised a bigger tax refund than they put up in cash.

Now they have a choice. They can accept a favourable offer from Canada Revenue Agency, or put their faith in promoters who got them into the mess. I would say to them: Accept CRA's offer.

Promoters of charitable donation schemes typically invited taxpayers to buy products at a low price, then claim a much, much higher price when donating them to an associated charity.

Early schemes involved works of art, but as Ottawa tightened regulations and courts issued rulings, promoters moved on to computer programs, prints, medicine, educational supplies, unsold comic books and even time-share dwelling units.

The promoters found the items to be donated, arranged for appraisals of value, engaged top law firms to write comforting letters of opinion and vowed to set aside a legal defence fund. It was a package deal.

They then instructed donors to report and pay tax on the notional increases in market value. A 46 per cent charitable tax credit made up amply for the 23 per cent tax on capital gains. As long as a charity was properly registered, the Canada Revenue Agency issued big refund cheques.

Gleeful donors told their friends and the donation schemes grew like wildfire. In many cases, middle-class workers have come to me after putting up $10,000 to get a $70,000 tax receipt, for a net tax savings of $18,000. Some service-minded promoters even lent them the $10,000.

But these donation schemes lacked legitimacy from their inception. They defied common sense, yet even some accountants urged their clients into them.

Legal opinions that supposedly supported the deals merely reviewed case law and relevant facts. They drew properly supported conclusions, but never went so far as guaranteeing a scheme would work.

CRA normally comes knocking two or three years after allowing tax refunds. Their tip-off is the explosive growth in receipts from a particular charity. Tax auditors obtain records from the charity or promoter and reassess donors en masse.

Often the CRA will take the position the donated items were worth less than the donor paid, let alone claimed for tax purposes. After all, the promoters took healthy fees. The net result is a big tax bill, plus interest and penalties.

Promoters have a standard response: "The government is wrong and we will fight for you." They hire top law firms to appeal. In the years that can take, the promoters have plenty of time to set up their next scheme.

Predictably, the CRA has emerged victorious in various appeals brought before the Federal Court of Appeal. In each of the Quinn, Tolley, Nash and Klotz cases, the Supreme Court of Canada refused in April of 2006 to grant a further appeal. Yet promoters have continued sales campaigns, with some new twist.

Their appeals do accomplish something, though. I have seen CRA offer more favourable terms than in its initial reassessments, if the taxpayer will agree to waive all further rights of appeal.

CRA has pulled off the table the penalties and the tax on capital gains, and generously allowed a charitable tax credit for the amount of cash put out. Only interest is charged on the tax avoided initially.

These offers are essentially fair. Eventual court rulings are unlikely to differ much. So it makes sense to simply accept, and pay quickly to avoid more interest charges at 9 per cent a year.

CRA's offers may be a bit complicated, and include mistakes. So taxpayers might prefer to get independent tax advice – as they should have before ever getting involved.


Posted in its entirety because articles sometimes disappear from the online Star.
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Postby andrew » 24 Oct 2007 18:29

yielder wrote:[url=http://www.thestar.com/article/269020]
But these donation schemes lacked legitimacy from their inception. They defied common sense, yet even some accountants urged their clients into them.


He's obviously much smarter than those advisors, yet I couldn't find his prior article where he warned clients up front about how illogical this was. Was his certain conviction on hold to see what CRa and the courts decided after the fact? Now perhaps he can explain all of the logic of taxation of stock dividends, personal exemptions and such, or does he need to wait 10 years to to see what other people think of these first?

yielder wrote:[url=http://www.thestar.com/article/269020]
Legal opinions that supposedly supported the deals merely reviewed case law and relevant facts. They drew properly supported conclusions, but never went so far as guaranteeing a scheme would work.
[/quote]

Case law and relevant facts? No wonder they got it so wrong. What a bunch of morons. They should have used his system. Wait 10 years and see what legislative changes were made.

He recommends settling? Hmm, did he mention that he is a tax defense lawyer and charges people to negotiate with CRA? I didn't see that.
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Postby kombat » 05 Nov 2007 13:51

I don't know if anyone is interested or not, but my wife and I have some inside experience regarding these types of programs.

Last year, we joined a local investment club. The tax specialist recommended we (all members, not just my wife and I) take part in the charitable donation program to minimize our income tax obligation. We each donated $5,600 ($11,200 total) of our own cash to the charity (Parklane Financial Group, based in Toronto). We were then granted membership into a trust, along with many other donors, and given units in a trust fund. However, individually the units cannot be redeemed. They can only be redeemed when the holder has all the units of the fund. So all of us "gifted" our shares to charities, and were issued tax receipts for the value.

According to them, this is legal because there is no "re-valuation" taking place, as with the art scams. We're not buying something cheaply and donating it at an inflated value. They assured us that the charities were in fact receiving cold, hard cash in the amounts equal to the values we received receipts for.

So we got receipts for our original $11,200 donations, plus additional receipts of $15,000 each, for a total donation of $41,200. This is what I claimed on my 2006 taxes.

Surprisingly, I got my Notice of Assessment in April, and was given back the full amount of my claim (basically, all of my income tax for 2006). However, several months later (this past August), I got a letter from CRA requesting supporting documentation for my charitable donation claims (I had e-filed through H&R Block). I meticulously supplied all the requested receipts and information.

A few weeks later, I received another letting indicating that my claim was going to be "reviewed," and that an agent would be contacting me. Their letter included a generic note describing "charity schemes" in harsh terms, stating that every single claim has been overturned, with penalties and interest.

However, after another month (the end of October), I received another letter from CRA stating that my claim was approved, and no further review is necessary. They returned all the supporting documentation I had mailed them.

So it would appear that my claim was legitimate, and passed review. I'm told by others that they can review me again for up to 7 years, but I'm not sure that's correct. Haven't I already been thoroughly reviewed, and approved? Hasn't the CRA basically admitted that while they may not like what we did, they can find no legal basis to deny it?

Nevertheless, my wife and I have opted not to repeat our participation in this program. It fails the "smell test", in my opinion, and I do not welcome the ongoing scrutiny of the CRA. We did it once, held our breath, and it turned out it worked. That's enough adventure for me. I'll stick to more conventional wealth-building strategies from now on.

EDIT: I wanted to add why my wife and I participated. At the time, we didn't know much about finance and investing. The person pitching the program pressed all the right buttons during his presentation to the group. He said things like, "Do you think rich people pay taxes? Of course not. They take advantage of loopholes like this one. All we're doing is extending that exact same benefit to everyday folks like you." He assured us that it was legal, but that even if the CRA did choose to challenge it, the company has a million dollar legal fund set aside to defend it. He stated they'd been doing it for years, and reminded the audience of all the good that will be accomplished at the charities, thanks to our donations. It was very convincing.
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Postby beaverlodge » 05 Nov 2007 17:49

Some turn offs would be

The rich people
The touchy feely on the charities
Their million dollar legal fund

I would also have had my tax return done by anybody but H and R Block. That in itself is red flag. Go to a professional - a CGA or a CA and have it done properly.
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Postby Arby » 05 Nov 2007 20:50

My mail today included a letter from CRA with a brochure and a CRA fridge magnet, warning about charitable donations tax schemes. The fridge magnet directed people to the CRA website, which contains [url=http://www.cra-arc.gc.ca/tax/charities/donors/alert/2-e.html] this information on donation schemes:
The CRA has audited many of these gifting arrangements. Generally, the CRA reduces the amount of the tax credit to no more than the taxpayers' cash donation, and in many cases it is reduced to even less than that. In some cases the credit is reduced to zero. The CRA may also charge interest and penalties.
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Postby Slippy » 06 Nov 2007 13:04

kombat wrote:I don't know if anyone is interested or not, but my wife and I have some inside experience regarding these types of programs.

Last year, we joined a local investment club. The tax specialist recommended we (all members, not just my wife and I) take part in the charitable donation program to minimize our income tax obligation. We each donated $5,600 ($11,200 total) of our own cash to the charity (Parklane Financial Group, based in Toronto). We were then granted membership into a trust, along with many other donors, and given units in a trust fund. However, individually the units cannot be redeemed. They can only be redeemed when the holder has all the units of the fund. So all of us "gifted" our shares to charities, and were issued tax receipts for the value.

According to them, this is legal because there is no "re-valuation" taking place, as with the art scams. We're not buying something cheaply and donating it at an inflated value. They assured us that the charities were in fact receiving cold, hard cash in the amounts equal to the values we received receipts for.

So we got receipts for our original $11,200 donations, plus additional receipts of $15,000 each, for a total donation of $41,200. This is what I claimed on my 2006 taxes.

Surprisingly, I got my Notice of Assessment in April, and was given back the full amount of my claim (basically, all of my income tax for 2006). However, several months later (this past August), I got a letter from CRA requesting supporting documentation for my charitable donation claims (I had e-filed through H&R Block). I meticulously supplied all the requested receipts and information.

A few weeks later, I received another letting indicating that my claim was going to be "reviewed," and that an agent would be contacting me. Their letter included a generic note describing "charity schemes" in harsh terms, stating that every single claim has been overturned, with penalties and interest.

However, after another month (the end of October), I received another letter from CRA stating that my claim was approved, and no further review is necessary. They returned all the supporting documentation I had mailed them.

So it would appear that my claim was legitimate, and passed review. I'm told by others that they can review me again for up to 7 years, but I'm not sure that's correct. Haven't I already been thoroughly reviewed, and approved? Hasn't the CRA basically admitted that while they may not like what we did, they can find no legal basis to deny it?

Nevertheless, my wife and I have opted not to repeat our participation in this program. It fails the "smell test", in my opinion, and I do not welcome the ongoing scrutiny of the CRA. We did it once, held our breath, and it turned out it worked. That's enough adventure for me. I'll stick to more conventional wealth-building strategies from now on.

EDIT: I wanted to add why my wife and I participated. At the time, we didn't know much about finance and investing. The person pitching the program pressed all the right buttons during his presentation to the group. He said things like, "Do you think rich people pay taxes? Of course not. They take advantage of loopholes like this one. All we're doing is extending that exact same benefit to everyday folks like you." He assured us that it was legal, but that even if the CRA did choose to challenge it, the company has a million dollar legal fund set aside to defend it. He stated they'd been doing it for years, and reminded the audience of all the good that will be accomplished at the charities, thanks to our donations. It was very convincing.



The letter you got is in response to the request that you send in your donation receipts supporting the claim that you made via Efile. This happens all the time. I'm very sure that it is not an approval of your claim and if you call CRA I'll bet that they very much still have an open file on you regarding this claim.

You are right about the "sniff test". Getting $41200.00 worth of charitable donation receipts when you only actuall contributed $11200.00 reeks no matter how it is spun.
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Postby AltaRed » 06 Nov 2007 17:33

Slippy wrote:The letter you got is in response to the request that you send in your donation receipts supporting the claim that you made via Efile. This happens all the time. I'm very sure that it is not an approval of your claim and if you call CRA I'll bet that they very much still have an open file on you regarding this claim.


I would also add that I believe CRA can re-assess up to 7 years back in time, i.e. the reason to retain 7 years of tax records at any given time.
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Postby DanH » 06 Nov 2007 21:34

AltaRed wrote:
Slippy wrote:The letter you got is in response to the request that you send in your donation receipts supporting the claim that you made via Efile. This happens all the time. I'm very sure that it is not an approval of your claim and if you call CRA I'll bet that they very much still have an open file on you regarding this claim.


I would also add that I believe CRA can re-assess up to 7 years back in time, i.e. the reason to retain 7 years of tax records at any given time.


And, as far as I can recall, there is no time limit in the case of tax evasion or tax fraud.
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Postby kombat » 07 Nov 2007 08:41

Slippy wrote:The letter you got is in response to the request that you send in your donation receipts supporting the claim that you made via Efile. This happens all the time. I'm very sure that it is not an approval of your claim and if you call CRA I'll bet that they very much still have an open file on you regarding this claim.


Are you sure? This is the exact wording in the letter:


Dear Sir:

Re: Income Tax and Benefit Return for 2006

We have completed our review of the return mentioned above. Based on the documentation you submitted, no adjustment is necessary.

If you mailed documents to us, we are returning them for your records. Please keep them for future reference because, in general, we do not retain copies. Thank you for your cooperation.

If you have any questions [etc. etc., contact info].

Yours Sincerely,

J. Perreault
Manager,
Processing Review Section



It sounds pretty final to me - do you still suspect I'll be required to repay the refund?

AltaRed wrote:I would also add that I believe CRA can re-assess up to 7 years back in time, i.e. the reason to retain 7 years of tax records at any given time.


How can they re-re-assess me when they've already conducted such a thorough review of my return? Doesn't the above letter mean that they've scrutinized my return and could find no justification to demand repayment? How could they possibly come back in 7 years and change their mind? Couldn't I just cite the above letter in court and say, "Your honor, I have a signed statement from Mr. Perreault stating clearly that 'no adjustment is necessary.'" How could any court find against me in that case and require me to turn around and repay everything, with interest and penalties?

DanH wrote:And, as far as I can recall, there is no time limit in the case of tax evasion or tax fraud.


Doesn't the letter pretty much clear me of any possibility of such charges? How could they possibly get a "tax evasion/fraud" conviction when I have a signed letter from their head of review stating that they've thoroughly reviewed my claim and found it to be in order?
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Postby TMG » 07 Nov 2007 09:51

Kombat: From what you've said, CRA has confirmed that you have a receipt for the amount that you e-filed.

This is *not* an audit, it is a review of your receipts. It is *not* an audit of the validity of the claim. The audit cycle is much longer than the timeframe you have given us. I know that CRA is now auditing en masse returns with buy low-donate high arrangements from three years ago.

CRA may be pulling together the information on all tax filers who included receipts from the same charitable donation promoters as you.

You should note that your letter came from the Processing Review division of CRA - these are the folks who ensure taxpayers can provide receipts to back up the deductions etc. they have claimed on their filed returns.

Check this page on the CRA web site:

http://www.cra-arc.gc.ca/tax/individual ... enu-e.html

Note that it says a processing review does not equal an audit. Reviews and audits, in the world of CRA, are different animals.
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Postby brucecohen » 07 Nov 2007 09:55

kombat wrote:Doesn't the above letter mean that they've scrutinized my return and could find no justification to demand repayment? How could they possibly come back in 7 years and change their mind? Couldn't I just cite the above letter in court and say, "Your honor, I have a signed statement from Mr. Perreault stating clearly that 'no adjustment is necessary.'" How could any court find against me in that case and require me to turn around and repay everything, with interest and penalties?

I suspect the review you underwent was simply a preliminary check to see if there were documents supporting your claim. It was not the more detailed consideration of whether your claim was allowable. From CRA:
Review programs promote client education by identifying common areas of misunderstanding. Analysis of results and feedback from clients are used to review and improve the guides and forms the CRA provides to the public. See our Common adjustments page for a list of errors frequently made when completing a tax return.

Three of our review programs are the Pre-assessment Review Program, the Processing Review Program, and the Matching Program. Under these programs, we review a number of deductions and credits on the individual income tax return and ensure that various income amounts have been correctly reported.

Note
It's important to emphasize that when we select your return for review, this does not represent a tax audit. For more information about the tax audit and related policies and practices, see IC71-14R3, The Tax Audit.

If I were you, I'd expect to hear from them again.
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Postby andrew » 07 Nov 2007 19:11

Absent carrying back a loss, or successful charge of wilful tax evasion or fraud, a return filed 7 years ago would be statute barred and CRA cannot reassess it.

I was going to provide the link to regulations but decided that this was basic stuff and I shouldn't have to.
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Postby Bylo Selhi » 07 Nov 2007 20:53

TMG wrote:It is *not* an audit of the validity of the claim. The audit cycle is much longer than the timeframe you have given us. I know that CRA is now auditing en masse returns with buy low-donate high arrangements from three years ago.
brucecohen wrote:If I were you, I'd expect to hear from them again.

Based on that it seems to me that kombat should seek assistance from a tax pro ASAP. If CRA is going to do an audit, reject the claim and then demand taxes, penalties and interest it's better to get it over with now rather than wait for interest to accrue as they plow through their three year backlog. A tax pro may even be able to reduce penalties and interest accrued to-date under CRA's Voluntary Disclosure program.
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Postby kombat » 08 Nov 2007 08:46

There's a "town hall"-style meeting tonight being held by the financial club, with a representative from the charity (Parklane Financial Group) to be in attendance, to answer questions. This should be interesting.
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