Donation Tax Shelter Program

[Sn0man]

Thanks! More info would be great! Sounds like it is a stressful way to make money.

If you're trying to "make money" off the CRA you are in for one hell of a surprise, and one hell of a butt whooping.

Not speaking from experience, but if you're dumb enough to try to rip off the tax people then you deserve whatever you end up getting.

[maple leaf]

Sounds like this scheme,being warned about here.


Beware of tax shelter donation arrangements
By Canadian Capitalist | Taxes Online only, 19/08/08
Recently a friend asked about a “tax scheme” that claims to buy medicines for AIDS patients (“Fight AIDS Save Taxes” is its slogan) in Africa and provides a tax receipt for four to five times the donation amount. While stiffing the government, helping AIDS patients and putting some money in the pocket may sound like a win-win situation all around, participating in a tax shelter scheme is asking for trouble. The Canada Revenue Agency has a clear position on these schemes and titled a recent alert, “Warning: Participating in tax shelter gifting arrangements is likely to result in a tax bill!” The text of the alert also provides no room for confusion:

New schemes are being marketed that claim to be different from those for which the CRA has previously issued warnings. Taxpayers should avoid all schemes that promise donation receipts for 3 to 4 times the cash payment. It is the CRA’s position that the proposed legislation, effective since 2003, will apply to reduce the donation credit to no more than the actual cash payment. Furthermore, as indicated above, completed audits have shown that there was effectively no gift being made in many cases, and as a result, the donation was reduced to zero.
The Toronto Star ran a series of investigative pieces on charity scams last year available here, here and here. An accompanying graphic to the story illustrates the risk involved in these schemes. A taxpayer made a donation of $10K and received a tax credit of $21K (probably adjusted for the original donation), got audited and the taxman wants $35K in back taxes, interest and penalties. Despite the CRA warnings and media coverage, it appears that many are falling for these schemes — the aforementioned “charity” claims to have raised $165 million so far.
http://www.canadiancapitalist.com/bewar ... angements/

[LongHaul]

These schemes always end badly for somebody. As the old saying goes “look around the room and see if you can identify the sucker who is going to lose his money. If you can't then you are the sucker.”

Unfortunately people selling these products are incredibly convincing, especially when they are talking to someone who wants to believe.

My advice echoing the advice of earlier posts is hang onto your watch, rings and wallet and run like hxxx.

You could also try checking with the CRA. If they haven't checked into this “charity” yet they may not say much except for scary warnings about what will happen if they disallow the deduction in the future.

[ATS]

I can guess who your planner is, and I am sure they said to you to reinvest your refund with them???

I have been to these seminars they put on as well as a presentation they put on for tax professionals to get us on board with our clients. The representative from the Tax Shelters first words were that he was a lawyer, but was not a member of the "bar".

At the end of the day your planner wants to make money off you and tell you they can get you a better rate of return than what you would pay in interest to CRA if everything is denied. They are risk free earning money off you while you take all the risk and stress.


Call any reputable accounting firm and ask their tax department their thoughts on these things.

[Exhaksattah]

In Ontario - it depends on who you donate the car to, and what they do with it in the end.For the most part, if they decide to fix it up a little and sell it at auction, youll be sent a tax reciept for the sale amount of the vehicle.If they decide to junk it, you get a 50 tax reciept. might be 100, but pretty sure its 50

[TimmyE]

Stay clear of these tax shelters. The tax man doesn't like these and they are going after anyone who ever bought one. It's not worth the headaches with having to deal with them, the promoter and your own accountant. You would get a bigger bang for the buck down at the Casino. At least you have a chance to win!

[miss_sterious]

Just an update, we decided not to try this. Thanks for the reality check guys!

[TimmyE]

Just in case anybody wants it from the horse's mouth, have a look at this link. It's pretty explicit.

http://news.gc.ca/web/article-en.do?mth ... nid=808689