Charges laid by CRA in Canadian inflated donation tax fraud investigation

April 10, 2010 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: News, What's New from the Charities Directorate of CRA, Canadian Charity Law, Global Giving, Ethics and Canadian Charities, Avoiding 'Charity' Scams

Here is a copy of a press release from the Canada Revenue Agency entitled “Charges laid in donation tax fraud investigation”.  In the press release CRA discusses the charges it has laid against three people who allegedly issued donation receipts for more than the amount of the donation.  CRA noted that “The Income Tax Act permits registered charities to issue tax receipts only for the amounts actually donated. Schemes that promise a tax receipt in excess of what a donor gives are usually fraudulent. The CRA audits charities to put a stop to such schemes and intends to prosecute tax preparers, directors of charities, and donors who are found to be involved.”

Charges laid in donation tax fraud investigation

Victoria, British Columbia, April 8, 2010… Canada Revenue Agency (CRA) investigators have laid charges against Martin Danso-Dapaah, Carrie-Anne Danso-Dapaah and Michael Meszaros, all of Victoria, B.C., for offences relating to the alleged sale of more than $7.6 million in inflated charitable donation receipts. The alleged offences included donation receipts issued by CanAfrica International Foundation and Canadian Foundation for Child Development – all formerly registered charities.  The Danso-Dapaahs and Meszaros are alleged to have played various roles in the sale of charitable donation receipts to more than 450 individuals at 10 to17 per cent of their face value, creating a tax credit greater than the value of the purchase price.

Schemes involving false or inflated charitable donation receipts and tax preparer fraud are being investigated as part of Project Trident, a CRA-wide enforcement project that helps protect the tax base by pursuing key players in fraudulent tax schemes and reassessing related tax returns. Project Trident targets three types of fraud: identity theft, charities related fraud, and tax preparer fraud. For more information, visit http://www.cra.gc.ca/projecttrident.

The CRA is committed to ensuring all businesses have a level playing field and pursues individuals and businesses who deliberately attempt to evade taxes. “Schemes such as this cause taxes to be evaded, takes money away from the services that benefit all Canadians and undermines the important work of legitimate registered charities,” said Paul Brown, Assistant Director of Enforcement at the Vancouver Island Tax Services Office.

The CRA is committed to helping charities and donors understand their obligations under Canada’s tax laws. The Income Tax Act permits registered charities to issue tax receipts only for the amounts actually donated. Schemes that promise a tax receipt in excess of what a donor gives are usually fraudulent. The CRA audits charities to put a stop to such schemes and intends to prosecute tax preparers, directors of charities, and donors who are found to be involved.

Individuals who have participated in similar donation arrangements can still voluntarily correct their tax affairs.  Taxpayers will 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 will only have to pay the taxes owing, plus interest. More information on the Voluntary Disclosures Program can be found on the CRA’s website at http://www.cra-arc.gc.ca/voluntarydisclosures .

The information in this news release is consistent with that found in the court records.

Further information on convictions can also be found in the Media room on the CRA website at
http://www.cra-arc.gc.ca/convictions .

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For more information:
Dave Morgan
Communications Manager
604-587-2533

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