Canada’s Taxpayers’ Ombudsman Wednesday released a report titled Donor Beware in which he calls on the Canada Revenue Agency (CRA) to improve communications related to warning the public about tax shelter donation schemes.
J. Paul Dubé also recommends that the CRA monitor trends in the structuring of, and investing in, questionable tax schemes and make such information available to the public in a timely manner.
Despite the CRA’s efforts to stop abusive tax donation schemes and legislative changes to help it do so, these schemes continue to taint the charitable sector, the Ombudsman notes. Also, while the CRA has warned Canadians of the consequences of participating in such schemes, the Ombudsman is still seeing abusive schemes operating to which donors contribute either knowingly or unknowingly.
“Many complaints have been received by my office from taxpayers that were unaware of the tax consequences when they participated in abusive tax donation schemes,” says Dubé.
“That means, the CRA needs to improve overall communications on this issue including raising awareness of the consequences of participation in such schemes. Ultimately, these efforts will help prevent innocent individuals from falling victim to promoters of abusive tax donation schemes.”
In the report, Dubé puts forward a number of recommendations to address these problems and alleviate their impact on Canadians.