March 31, 2010
I think that some people assume that if a tax avoidance scheme is sufficiently complicated or “grey” and sufficiently well documented that the courts will allow those schemes. If you make that assumption you might want to read Coleman v. The Queen, 2010 TCC 109 (January 25, 2010) as this case may change your mind. Coleman discusses in detail whether a “donation” to a charity that provides a scholarship or bursary through a scheme to their child or grandchild should be receiptable. The decision is 45 pages long which will be presumably ‘welcomed’ by those who complain that some of the recent Federal Court of Appeal decisions are too short! Blake Bromley of Benefic Law Corporation argues for the unsuccessful appellants. Mr. Justice Campbell J. Miller of the Tax Court of Canada decides for the CRA in this very well written case in which he decides that there is no donation when the children or grandchildren of a donor benefit from the gift. In addition to the pure legal issues in this case there are also some interesting ethical issues raised by the conduct of the registered charity (National Foundation for Christian Leadership) and the donors.
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March 30, 2010
The CRA discusses questions including 1.What is meant by broad and vague objects? 2.What is the problem with broad and vague objects? 3.Is there a way to keep our objects broad and still be eligible for registration as a charity? 4.What is the difference between purposes (or objects) and activities? 5.Why are purposes and activities important? 6.What is “sufficient” information?
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CRA will be updating the Charities and Giving home page. Here is a note on the What’s New section of the CRA website. [The Changes have now taken place - see http://www.cra-arc.gc.ca/chrts-gvng/chrts/menu-eng.html as of April 9, 2010]
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March 25, 2010
Posted by Mark Blumberg on 03/25 |
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Canadian Charity Law
Here is a copy of a letter I am told was sent from The Hon. Albina Guarnieri, M.P.. The letter is in italics. I have placed in bold italics the parts that I find most objectionable and at the end of each paragraph in brackets and bold my comments. I have previously written on this issue at http://www.canadiancharitylaw.ca
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March 22, 2010
In Lockie v. The Queen, 2010 TCC 142 (March 18, 2010) the Tax Court of Canada ruled that with a donation scheme involving pens and toothbrushes that were donated to a charity as part of a charity gifting tax shelter scheme that the fair market value of the items is not the retail fair market value of the items as suggested by the taxpayer but is the amount paid by the taxpayer for the items. That is how a $20,043 tax receipt should only have been $3,800. Every year there are a number of new gifting tax shelter schemes that argue they are different than earlier schemes. It is interesting to see how carefully the judges went into detail to discredit the valuation provided in support of the taxpayer position and there is no reason to believe that with any tax shelter gifting arrangement that I have seen the result would be any different.
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Will Recent Legal Changes that make social enterprise for registered charities easier in Canada be enough?
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March 17, 2010
In this recent press release from CRA they noted that “Promoters and other third‑party representatives are penalized when they make false statements involving schemes that are against the law. Currently, there are 71 audits involving promoters. Recent examples include a scheme involving RRSPs, for which the promoter was assessed a penalty of $1.8 million, and a tax shelter gifting arrangement case where the Canada Revenue Agency (CRA) proposed two penalties of $24 million against the promoters involved.”
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The CRA has just released a brochure entitled GI-067 Basic GST/HST Guidelines for Charities http://www.cra-arc.gc.ca/E/pub/gi/gi-067/README.html This will be helpful especially to charities in BC and Ontario that are moving to HST on July 1, 2010. They have also put out GI-066 How a Charity Calculates the Net Tax to be Reported on its GST/HST Return at http://www.cra-arc.gc.ca/E/pub/gi/gi-066/README.html CRA has also put out a brochure for “Public Institutions” which includes registered charities that are a “school authority, a public college, a university, a hospital authority, or a local authority determined by the CRA to be a municipality” and it is located at http://www.cra-arc.gc.ca/E/pub/gi/gi-068/README.html.
March 16, 2010
Posted by Mark Blumberg on 03/16 |
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Canadian Charity Law
The Globe and Mail reported on March 16, 2010 that a Liberal MP is proposing a private members bill that would make salary disclosure mandatory for the top 5 executives of a registered charity and cap all payments to any employee at a Canadian registered charity to $250,000 per year. It is nice to see a politician that is interested in the inner workings of the charitable sector but I don’t think this particular proposal is helpful. [MB. I have added further information as it has become available.]
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Here are some recent items from the Charity Law Information Program (CLIP) Communique.
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