Toronto Star covers CRA criminal investigation of charity tax shelters

April 17, 2014 | 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, Ethics and Canadian Charities, Avoiding 'Charity' Scams

In an article entitled "Canada Revenue Agency expands investigations of tax shelters", Kevin Donovan of the Toronto Star discusses how "As many as 12 charity tax shelter promoters are under criminal investigation for schemes that saw donors contribute millions of dollars in return for charity receipts worth six times as much."

He then notes "The Canada Revenue Agency has refused to identify the promoters — Canadian business people — who have made a lucrative career out of charity donations. The federal agency said the promoters, who are also taxpayers, have a right to their privacy."  It should be noted that s. 241 of the Income Tax Act provides for taxpayer confidentiality with only a few small exceptions.  I have argued at the Finance Committee on a number of occasions that s. 241 should be amended to allow CRA to disclose serious abuse of charities.

It makes little sense to me that the CRA can launch criminal investigations but it will not identify the individuals alleged to have conducted such criminal activities.   If the public is not aware of who is alleged to have conducted such activities then it is more difficult for the public to protect themselves both financially and reputationally.   

Here are some of my earlier submissions to the Finance Committee:  

January 2012 and May 2012 submission.

The can read the Toronto Star article.

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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.

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