Avoiding 'Charity' Scams

November 25, 2015

CRA initiative “Protect yourself against fraud”

It is interesting to see that CRA used to refer to "abusive charity gifting tax schemes" and they appear to be lumping them in with fraud.  "Meet Mary & William. Mary and William are a married couple with kids. They have fallen victim to a donation tax shelter scheme. Find out more about Mary and William’s story and how you can protect yourself against fraud."

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November 25, 2015

Mattachione, V. et. al. v. The Queen (TCC)

The Tax Court of Canada recently released a decision where they dismissed the appeals of former spouses relating to reassessments under the Income Tax Act with respect to their alleged charitable donations made in 2003, 2004 and 2005. 

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November 24, 2015

Major national charity allegedly hit with $800,000 fraud

A number of media outlets have reported that allegedly March of Dimes Canada has been hit with a $800,000 fraud over an 8 year period.   Hear is a report from consumer reporter Sean O’Shea.  "Toronto woman charged in alleged defrauding of the March of Dimes of $800K"

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November 02, 2015

Successful appeal by CRA in Canada v. Castro, 2015 FCA 225

We have previously blogged about the decision of the Tax Court of Canada in David, R. et al. v. the Queen (TCC) (here and here). In this decision, the court allowed the appeals of the respondents relating to tax credits that had been previously disallowed by the Minister of National Revenue for gifts the respondents had made to CanAfrica International (CanAfrica), a registered charity, in 2006 (each of the respondents was issued an inflated tax receipt by CanAfrica).  

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November 01, 2015

Ontario Bar Association program “Top Compliance Issues for Canadian Charities” on Nov 9, 2015

On November 9, 2015 I will be presenting a program for the Ontario Bar Association, along with Nevena Urosevic, on Top Compliance Issues for Canadian Charities.  It is available both in-person and by webcast.

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October 09, 2015

Agenda for the Blumbergs’ Charity Law Institute 2015

October 08, 2015

Canadian Charity Case Law

We are compiling a list of Canadian cases dealing with charities, gifting and related issues.  Let us know if you have any other suggestions:

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September 14, 2015

Humber Fundraising Management Course “Ethical and Legal Issues”

Mark Blumberg will be team teaching, with Valerie Campbell and Sharilyn Hale, the Humber Fundraising Management Course "Ethical and Legal Issues".  It was previously taught by Ken Wyman so we will have big shoes to fill.    

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July 31, 2015

Guindon v. Canada - SCC upholds third party civil penalties under the ITA

In the recent Supreme Court of Canada decision Guindon v. Canada - 2015 SCC 41 the SCC has upheld the third party civil penalties provided under the Income Tax Act.

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July 20, 2015

CRA revokes the registration of the Canadian Friends of Pearl Children

The CRA has revoked the Canadian Friends of Pearl Children for involvement with what CRA would term an abusive charity gifting tax scheme.  

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April 28, 2015

Fundamentals of Receipting by Canadian Charities [SOLD OUT]

Properly issuing official donation receipts has been challenging for many registered charities.  According to the CRA, 89% of registered charities that are audited are not correctly issuing official donation receipts.  Issuing incorrect receipts can result in revocation or penalties. It is easier to do it right than fix problems later! Here is a new half-day program from Blumbergs entitled "Fundamentals of Receipting by Canadian Charities".

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February 25, 2015

Arthur v. The Queen - another case in which the TCC rejects receipts and sides with CRA

In Arthur v. The Queen, 2015 TCC 43, Juliet Arthur was appealing a reassessment made by CRA relating to two receipts.   The case provides a good summary of the cases dealing with lack of appropriate documentation for donations - especially when they are either cash or gifts in kind. The TCC dismissed the appeal with "Considering the evidence as a whole, I conclude that the appellant has not shown on a balance of probabilities that she made a charitable donation in the total amount of $3,529 to Emilia in 2006, even though a receipt was provided which purported to show that she had done so."

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February 24, 2015

“Australian ‘Charity’ Fined Record $1.5 Million” for Canadian “fake philanthropic scheme”

The Australian website Pro Bono Australia has published an article on an Australian Federal Court decision to impose a $1.5 million fine on a "fake philanthropic scheme was modelled on an arrangement which previously failed in Canada, and involved the purchase and donation of AIDS pharmaceutics to charities in Africa." It is interesting that as we are considering in Canada the constitutionality of civil penalties, that the Australians are imposing such civil penalties on Canadians for schemes offered in Australia by a Canadian company.   It is also interesting that these type of abusive charity gifting tax schemes issued receipts in Canada for over $6.3 billion dollars.  The "success" in Australia was much more limited and perhaps 1/1000 of that.

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February 21, 2015

CRA revokes African Computer and Technology Literacy Awareness Program as registered charity

The Canada Revenue Agency has distributed a press release that it has revoked the registration of African Computer and Technology Literacy Awareness Program (ACTLAP) Inc. for involvement with an abusive charity gifting tax scheme.

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February 17, 2015

French v. The Queen - court rejects bijuralism argument in defining gifts under the ITA

In a recent case French v. The Queen, 2015 TCC 35, the CRA asked that certain arguments related to defining a gift be struck as they had no hope of success. Campbell J. Miller of the Tax Court of Canada agreed with CRA.   The argument made by a group that had invested in an abusive charity gifting tax scheme (Ideas Canada Foundation) relates to bijuralism or that within Canada there are two legal traditions (namely common law and civil law) and that they have slightly different views on a gift and that there was ambiguity in the common law definition and that the civil law definition should be used to interpret what is a gift.. The court concluded that the bijuralism argument is not novel and that it is hopeless.   "I find reliance on Québec laws to interpret common law, when the common law is clear, is not arguable."  TCC continued "I find no basis upon which the Appellants can mount any argument that would extend the civil law definition of gift to the advantage of taxpayers in common law jurisdictions for purposes of the Charitable Donation Tax Credit. Their position with respect to this argument is hopeless."  The TCC found that with respect to the definition of a gift "There is no confusion. There is no ambiguity."   

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February 09, 2015

Scheuer v. Canada - an interesting and wonky case against CRA for not sufficiently warning “donors”

Should CRA do a better job of warning Canadians about abusive charity gifting tax schemes?  Well a group of Plaintiffs who participated in the abusive tax shelter gifting scheme Global Learning Group Inc (GLGI) thinks so.   "The Plaintiffs made a claim in negligence in 2011 against Her Majesty the Queen, the Canada Revenue Agency [CRA], and the Attorney General of Canada for the CRA’s alleged breach of its duty of care by failing to properly warn the Plaintiffs in a timely fashion of the consequences that could follow from their participation in the GLGI program."

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February 09, 2015

CRA has new powers to disclose criminal behaviour to law enforcement

According to Canadian Press "The federal revenue agency can now hand the police possible evidence of serious crime — including terrorist activity — that it happens to come across while reviewing taxpayer files. The Canada Revenue Agency gained the little-noticed new authority, which does not require a judicial warrant, through an amendment tucked into the government's most recent omnibus budget bill."   At the moment CRA is largely muzzled when it comes to sharing information - certainly with the public but even confidentially with other departments.  

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February 09, 2015

Australian Charity Regulator is Safe for Now

A few years back the Australian government set up the Australian Charities and Not-For-Profit Commission (ACNC).   Then a new government came into power and decided that having the ACNC was just red tape and that it should be abolished.  Thankfully that new government has done some reconsidering.   Here is an article from Pro Bono Australia http://shar.es/1oiJBZ 

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February 08, 2015

Updated Canadian Registered Charity Legal Checklist by Mark Blumberg

Here is an updated version of the Canadian Charity Legal Checklist.  For those who are interested in reviewing legal compliance for their registered charity they may find the checklist helpful.  

January 29, 2015

CRA Corporate Business Plan sheds light on Charities Directorate

The CRA Corporate Business Plan discusses CRA plans. It provides some interesting information on the Charities Directorate.  Here are some of the highlights:

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December 19, 2014

CBC article “Holiday giving? Don’t pick a charity by financial statements alone”

CBC discusses charitable giving in an article entitled "Holiday giving? Don't pick a charity by financial statements alone: Research, volunteer and donate directly if you want to give smart this holiday season".

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December 13, 2014

Blumbergs’ Canadian Charity Law Boot Camp 2015

We are looking forward to presenting the Blumbergs' Canadian Charity Law Boot Camp 2015 on April 14, 2015.   For information or to register see: Blumbergs' Canadian Charity Law Boot Camp 2015

December 13, 2014

CRA revokes registration of Ecotecture: Centre for Ecological Art and Architecture

The Charities Directorate of the Canada Revenue Agency has revoked the charitable registration of Ecotecture: Centre for Ecological Art and Architecture for its involvement in a scheme known as the Via Project or Vintage Iconic Archives.   The former registered charity had issued over $200 million in receipts.  

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December 03, 2014

Tidal wave of false receipting cases from Tax Court of Canada

Tax Court of Canada has released a number of judgements dealing with false receipting this week.  The cases all relate to a scheme in Vancouver involving the issuance of approximately $12 million in false receipts.  The cases of Azim Bani (2012-35421(IT)I, Jose Vekkal (2013-882(IT)I), Remmy Vekkal (2013-883(IT)I), Martin Izkendar (2013-220(IT)I), Ruben Nocon (2013-635(IT)I), Iraj Rasuli (2013-886(IT)I), Khorshid Rasuli (2013-887(IT)I), Ladan Abootaleby-Pour (2013‑1779(IT)I) and Oleg Komarynsky (2013-3354(IT)I) all related to this scheme.  In one case for example it notes that CRA "alleges that the Appellant purchased false charitable donation receipts from his accountants, Fareed Raza and Saheem Raza (the “Raza Brothers”). The Raza Brothers provided accounting and tax services under the trade names Fareed Raza & Co. Inc. and F & A Accounting Corporation (“FA”). The Raza Brothers were charged with fraud for making false statements on income tax returns prepared by them for their clients."  The Tax Court of Canada disallowed these false receipts.  

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November 26, 2014

CRA puts out another warning about abusive charity gifting tax shelters

CRA has put up another reminder to Canadians about abusive charity gifting tax shelters.  The title is "Warning: be cautious if you are thinking of participating in a gifting tax shelter schemes"

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Do you require legal advice with respect to Canadian or Ontario non-profits or charities?


Charity Lawyer Mark Blumberg

Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.

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