How one person s bogus charity receipt turned into a tax headache

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How one person s bogus charity receipt turned into a tax headache Powered By Docstoc
					How one person’s bogus charity receipt
turned into a tax headache
Tax shelter promoter told the donor that the scheme was a legitimate way
to reduce taxes and help cure AIDS in Africa.

Donation                 Tax receipt                    Tax credit         Result
                                                                           Taxman wants
$10,000                  $62,000                        $21,700            this donor to
                                                                           pay $35,000 in
                                                                           unpaid taxes,
* All schemes involve different calculations, but the                      interest and
ratio of money to tax receipts runs from 1-6 to 1-8.                       penalties.*

Number of Canadians whose receipts have been challenged. Typically the
value of the donation is denied or drastically cut.
Tax year                     ‘01 -’03               ‘04-’05          ‘05-’06        Totals
Challenges                   26,000                20,000            60,000      106,000
Receipts, billions             $1.4                 $0.55              $1.6        $3.55
SOURCE: Canada Revenue Agency, interviews with donors

				
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posted:1/26/2011
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