The CRA noted in a press release “Claude Simard, one of the promoters of the art-donation scheme in the municipality of Larouche in the Saguenay region, was found guilty of tax evasion today before the Court of Quebec in Montréal and was fined $300,000.”
Here is the CRA press release:
“Art-donation scheme in Larouche: Claude Simard guilty of tax evasion
Montréal, Quebec, March 22, 2012…Claude Simard, one of the promoters of the art-donation scheme in the municipality of Larouche in the Saguenay region, was found guilty of tax evasion today before the Court of Quebec in Montréal and was fined $300,000.
The Canada Revenue Agency (CRA) investigation revealed that, for the 2001 to 2007 tax years, Mr. Simard voluntarily contravened the Income Tax Act by helping third parties to obtain ineligible tax deductions for the donation of overvalued artwork to theMunicipality ofLarouche.
The above information was obtained from the court records.
Donating art and other gifts in kind to registered charities or other specified institutions is a legitimate charitable activity that is encouraged by the Canadian tax system. However, taxpayers should be aware of the risks associated with certain art-donation schemes – often referred to as “art flipping” – which have the effect of cheating the government out of taxes that should be paid.
The CRA also wants to warn taxpayers about investing in schemes that provide inflated or unsubstantiated tax losses or deductions. For more information in this regard, visit our Web site at http://www.cra.gc.ca/alert.
Individuals who have not filed returns for previous years, or who have not reported all of their income, can still voluntarily correct their tax affairs. They may not be penalized or prosecuted if they make a valid disclosure before they become aware of any compliance action being initiated by the CRA against them. These individuals may only have to pay the taxes owing, plus interest. More information on the Voluntary Disclosures Program (VDP) can be found on the CRA’s website at http://www.cra.gc.ca/voluntarydisclosures.
Additional information on convictions can be found on the Media page of the CRA Web site at http://www.cra.gc.ca/convictions.
For media information:
Telephone: 514-283-2957 “
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
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.