Edmonton Journal article on charity tax shelter Fight Aids Save Taxes (FAST) -“sketchy scheme”
Posted under News | Canadian Charity Law | Ethics and Canadian Charities | Avoiding 'Charity' Scams
An article appeared in the Edmonton Journal October 4, 2010 entitled “Charity tax-avoidance scheme entices many: Those trying to save money with such shelters are ‘damn fools’: lawyer”. The article refers to “slick” promoters “Participants are lured by the prospect of saving money and helping AIDS-stricken people in Third World countries.” He notes that details of the charitable activities are “sketchy”. One participant “concedes he is participating in the tax shelter against the advice of his accountant.” A charity lawyer describe any investor as “damn fools”.
“Bob Johnson, an independent financial consultant and FAST ambassador, says if there was a problem with the strategy, CRA officials would have moved in by now.” I find this sentence particularly funny - he is an “independent” financial consultant and “FAST ambassador” - seems like a contradiction to me. Also CRA has moved in - you might want to read this much better article by Paul Waldie at http://www.theglobeandmail.com/report-on-business/cra-targets-170000-canadians-with-gifting-tax-shelter-audits/article1707673/
Also you can check out the CRA website if you have 5-10 seconds to avoid 10 years of agony, pain, depression, financial ruin and mockery by your neighbours. In a section conveniently called “Avoiding Fraud” CRA has a section on “Donation Schemes” with Taxpayer Alerts and Fact Sheets. http://www.cra-arc.gc.ca/chrts-gvng/dnrs/lrt/2-eng.html They are auditing 175,000 donors and have denied about $6 billion in alleged “donations”. They gave one promoter a $24 million penalty.
CRA has been warning Canadians for a while and you can find past warnings on Tax Shelter gifting schemes going back as far as 1998. http://www.cra-arc.gc.ca/gncy/lrt/vshlt-eng.html
Here is the only really interesting part of the article:
“Arthur Drache, one of Canada’s foremost tax lawyers, didn’t comment on the FAST tax shelter, but he doesn’t mince words about what he feels about people who get involved in programs that tell them they can make a profit from charitable donations. “People who are trying to save tax dollars with these shelters are damn fools—the credulous dupes who believe that the Income Tax Act is unconstitutional, Elvis lives and the earth is flat.”
Here is a good article in the Winnipeg Free Press by David Christianson that is worth reading entitled “Make sure tax shelter doesn’t break CRA rules”