Charity Scams US and CANADA

I have a chance to participate in a charity promotion that promises me a tax deduction of four dollars for every dollar I contribute.  Is this legal

david ingram replies:

This is the first email i have answered since Nov 25th.

I have been against these from the start and issued many warnings.  People who had contributed / invested were horrified when I ridiculed the BANYAN Foundation on Fred Snyder's program a year ago.  At least a dozen of my clients invested anyway and have all lost their money.  Sometimes pretty paper and an offbeat legal opinion (which still says "consult your OWN tax advisor") will  make someone  put in thousands rather than use their common sense.

The CRA has managed to turn down just about all of them so far and it is only the new ones that they haven't dealt with yet that are still out there.

DO NOT TOUCH IT WITH A TEN FOOT POLE (or an eight foot German either).

The following is a recent CRA publication which explain the CRA position.  The IRS situation is much the same. Stay away from them.

Symbol of the Government of Canada

Tax Alert

Warning: Canada Revenue Agency has denied over $2.5 billion in tax shelter gifting arrangement donations

Despite numerous warnings and audit actions by the Canada Revenue Agency (CRA), some taxpayers are still participating in tax shelter gifting schemes.

Statistics and facts

  • The CRA plans to audit all tax shelter gifting arrangements.
  • For audits completed to date, over 65,000 taxpayers who participated in these schemes have been reassessed, or are in the process of being reassessed.
  • In most cases the CRA has denied the “gift” completely. 
  • Well over $2.5 billion in claimed donations are being denied.
  • In 2008, Canadian courts have continued to confirm the CRA’s position with respect to these schemes.

Tax shelter identification numbers

The CRA reminds taxpayers that tax shelter numbers are used for identification purposes only. A tax shelter with an identification number does not guarantee that taxpayers are entitled to receive

Did you participate in 2007? Not been contacted by the CRA yet? 

If you participated in a tax shelter gifting arrangement in 2007 and claimed your “donation” on your tax return, the claim may have been accepted as filed. This does not mean that the CRA agrees with your donation claim. Keep your books and records in case the CRA reviews your return.

The CRA generally has three years from the date of assessment to audit and reassess taxpayers. These audits can take over a year to complete. The fact that investors in these tax shelters have not been contacted and/or reassessed should not be interpreted as the CRA’s acceptance of their claim.

Penalties will be considered, especially where an investor was audited and reassessed for previously participating in a gifting scheme.

Current promotions

Tax shelter gifting schemes continue to be marketed and claim to be different from those for which the CRA has previously issued warnings. However, completed audits have shown that, in many cases, there was effectively no gift being made and, as a result, the donation was reduced to zero. Taxpayers should avoid all schemes that promise donation receipts for three to four times the cash payment.

Packages promoting these schemes sometimes include letters of commendation about the particular charity, which can give the impression of endorsing the scheme itself. These letters should not be interpreted as providing any assurance that these schemes do what they claim to be doing, or that the promised tax benefits are in accordance with the Income Tax Act.

Still thinking of investing? Get professional, independent advice

If you are still thinking about participating in a tax shelter gifting arrangement, it is very important that you get independent legal and tax advice. Independent advice means advice from a tax professional that is not connected to the arrangement or the promoter. If property is involved, you should also get independent advice on its true value. Packages from promoters will often claim to have legal or tax opinions from a law firm. You may find that these opinions contain very general comments and do not provide unconditional support for the scheme. Ask to see them, and have them reviewed by an independent

Come to us before we come to you.

If you choose to correct your tax affairs before we begin any audit action or investigation, you may be able to avoid penalties or prosecution. To find out how to request an adjustment to your tax return, go to www.cra.gc.c/voluntarydisclosures.

Previous tax alerts

For more information on previous tax alerts, go to on the CRA Web site.

Related news releases:

The Canada Revenue Agency revokes the charitable status of the Pinnacle Foundation (November 17, 2008)

The Canada Revenue Agency revokes the charitable status of the Choson Kallah Fund of Toronto (November 3, 2008)

The Canada Revenue Agency revokes the charitable status of The Banyan Tree Foundation (October 20, 2008)

The Canada Revenue Agency revokes the registered status of the Canadian Amateur Football Association (September 3, 2008)

The Canada Revenue Agency revokes the charitable status of International Charity Association Network (August 11, 2008)

CRA revokes charitable status of the Francis Jude Wilson Foundation (March 5, 2008)

This document is also available for download in PDF format.

To get notification by email when news releases, fact sheets, tax tips, and tax alerts are added to our Web site, subscribe to our electronic mailing list. You can also subscribe to the Media room RSS feed.

Most Sundays, I am a guest on Feed Snyder's Show as follows:  (an hour and a half from now this Sunday as an example if you wish to follow up on this.  Another guest today will be Brenna Ricci from DesJardins Funds to talk about their new HELIOS fund which is a good rival (in slightly different situations) for the Manulife INCOME PLUS Fund.  Tune in to CKNW at 980 on the dial if in Vancouver and on the net.

Every Thursday at 12 noon and 7 PM, Fred Snyder of Dundee Wealth Management
presents free Financial Seminars for his clients, potential clients and anyone who phones and asks to attend.

THERE is NO CHARGE!  (I used to charge up to $999.00 for essentially the same thing)

They are presented at the Dundee Boardroom (holds about 30 people max)

1764 West 7th
Vancouver, BC

phone (604) 731-8900 - ask for Freda to register for free.

These are genuine educational seminars dealing with everything from how to buy a house to making your mortgage tax deductible to buying an RRSP to alternatives to RRSP accounts to estate planning.  So what started as 13 separate seminars has now evolved into 23 separate topics.

ONE LADY CAME TO 53 separate seminars and her husband came to about 20 with her.

If you have a financial consultant, bring them.  People have brought their bankers and life insurance agents with them.

Take your spouse, your best friend, your son, your daughter, your mother or your worst enemy But do phone 604-731-8900

Fred Snyder  also is the host of ITS YOUR MONEY every Sunday evening   We have taken calls from around the world.  In one case, a lady phoned from Florida, got her answer and then asked if I was the David ingram she knew in Regina back in 1959.  Small world as they say.

  IT'S YOUR MONEY appears LIVE on CKNW  from 6 PM to 7 PM as a phone in show to answer your questions.  Call (604) 280-9898 or 1-877-399-9898 or *9898 on your cell to get your question on the air.  I am the
Callers to the show are awarded a free written financial plan for the future - be prepared to spend a couple of hours on this.
As an aside, I do not do them any more but used to charge up to $3,000 for essentially the same thing in the days before the wonderful computer programs available today to assist.

david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
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My Home office is at:
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Cell (604) 657-8451 -
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Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -  (please do not fax or phone outside of those hours as this is a home office) expert  US Canada Canadian American  Mexican Income Tax  service help.
pert  US Canada Canadian American  Mexican Income Tax  service and help.
David Ingram gives expert income tax service & immigration help to non-resident Americans & Canadians from New York to California to Mexico  family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.

IRS Circular 230 Disclosure:  To ensure compliance with requirements imposed by the IRS, please be advised that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation  in connection with personal or business affairs such as at or  If you forward this message, this disclaimer must be included."



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