The cartoonist Andrew Donato donated his cartoons and claimed a tax credit for the fair market value of them. The CRA didn’t dispute the amount of the credit he could claim, but it took the position that he had realized a capital gain on making the gift. The Tax Court agreed with the CRA in Donato v. The Queen, 2009 TCC 590. (more…)
Taxpayers who participated in ‘retail’ donation tax shelters continue to fare poorly in the Tax Court. See Maréchaux v. The Queen, 2009 TCC 587. (more…)
A charity cannot carry on a business unless it is a “related business”, which is a business that is related to the objects of the charity and that employs only volunteers.
After the decision in Alberta Institute on Mental Retardation v. The Queen, [1987] 2 C.T.C. 70, (F.C.A.), it could be argued that any business would be related to the objects of a charity if all profits of the business were devoted to the charity’s objects. The Federal Court of Appeal, however, has since gone out of its way to reject this proposition in two cases, the most recent being The House of Holy God v. Canada (Attorney General), 2009 FCA 148 at ¶6.
The CRA has produced a number of webcasts aimed at charities, to help them with their compliance burdens.
The CRA has issued new guidelines on fundraising for charities.
The CRA has revoked the status of two more charities that had participated in tax shelters. (more…)
The CRA continues to talk tough on donation tax shelter schemes. And why shouldn’t it? Its boast that “In 2008, Canadian courts have continued to confirm the CRA’s position with respect to these schemes” is accurate. What I find disturbing is the claim that the CRA has denied $2.5 billion worth of donations. That’s a lot of tax on which to pay interest. That’s a lot of tax to collect years after the fact.
The Supreme Court of Canada today issued its decision in Redeemer Foundation v. Canada (National Revenue), 2008 SCC 46. Four members of a seven-person panel rejected the charity’s appeal from the decision of the Federal Court of Appeal. (more…)
BBM Canada v. The Queen, 2008 TCC 341, is a surprise, not because of the result but because of the novel position advanced by the Crown in support of the assessment in question. The organization assessed had taken the position that it was exempt from tax under paragraph 149(1)(l) of the Income Tax Act because it was a not-for-profit. The CRA thought otherwise. (more…)
Another tax shelter case, another loss for the taxpayer: see Norton v. The Queen, 2008 TCC 91. It’s clear that the courts have little patience for these schemes, which is a real problem for those trying to promote legitimate shelters. The cynical among you will say “Is there such thing as a legitimate shelter?” There is. The problem is trying to distinguish the good from the bad.
