Thinking about a Tax Shelter? Think Again!

tax

“If it seems too good to be true…”

is the title of a column by tax expert Jamie Golombek. Jamie’s column is yet another reminder to all of us that the Canada Revenue Agency (CRA) is death on questionable charitable tax shelters.

Essentially, if a tax shelter promoter says you will get a tax receipt for an amount that exceeds your donation, it is likely not a valid tax shelter. Some of these schemes promise deductions of four or five times your donation amount. Normally the CRA isn’t very forthcoming in giving their opinion on any particular tax issue. For tax shelters, however, they are crystal clear. They will audit and disallow not only those bloated deductions, but also your actual donation amount. Then they will pursue for penalties.

The CRA is ramping up their attack on these phony shelters. Their latest is that they will now not complete an assessment or allow any deductions until they finish their audit of the tax shelter. That can take 2+ years. And, guess what? They audit EVERY tax shelter.

Folks, they are serious. Read this article. Read it again. None of these excessive donation credit tax shelters have been approved. In fact, the CRA has turned down $5.5 billion in donation claims and reassessed more than 167,000 taxpayers. Charitable status has been revoked for 44 charitable organizations that participated in these gifting tax shelters.

Don’t listen to anyone who tries to sell or promote this type of shelter. Don’t pay attention to the expensive suits of lawyers and accountants who are providing opinions supporting the shelter. Ignore the shelter’s claims that the shelter will vigorously defend their position and they have the legal resources to do it. Doesn’t matter. You will lose. It’s a colossal legal quagmire that will cost you tremendous amounts of time, money and negative energy, all for nothing. Run!!

 

Contact Barry McGuire now.
Alberta real estate needs an Alberta real estate lawyer.

“Tax” image by Phillip Ingham on Flickr. Used under Creative Commons Attribution-NoDerivs 2.0