Topics: News, What's New from the Charities Directorate of CRA, Canadian Charity Law, Ethics and Canadian Charities, Avoiding 'Charity' Scams
The CRA recently released a press release that “Stéphane Saintonge, one of the promoters of an art-donation scheme to the municipality of Larouche in the Saguenay region, pleaded guilty to a tax evasion charge today before the Court of Quebec in Montréal. He was fined $840,000.”
Here is the CRA press release:
“Art-donation scheme in Larouche: lawyer Stéphane Saintonge pleads guilty
Montréal, Quebec, June 21, 2012… Me Stéphane Saintonge, one of the promoters of an art-donation scheme to the municipality of Larouche in the Saguenay region, pleaded guilty to a tax evasion charge today before the Court of Quebec in Montréal. He was fined $840,000.
The Canada Revenue Agency (CRA) investigation revealed that Me Saintonge voluntarily contravened the Income Tax Act in 2003 by enabling a third party to obtain an ineligible amount of tax deductions for the donation of artwork to the Municipality of Larouche. The scheme used consisted of backdating a series of transactions in order to unduly boost the tax credits claimed. Those credits were based on a receipt of $5,471,450 dated December 31, 2002 but pertaining to transactions that took place after February 18, 2003, at which date the provisions of the Act were modified.
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. The CRA encourages taxpayers to inform themselves about the risks associated with certain art-donation schemes—often referred to as “art flipping”—that provide inflated or unsubstantiated tax losses or deductions. For more information, visit http://www.cra.gc.ca/alert.
Taxpayers 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 taxpayers 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 Web site 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:
The press release can be found at: http://www.cra-arc.gc.ca/nwsrm/cnvctns/qc/qc120621-eng.html
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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.