This page discusses the issues and frequently asked questions about Global Learning Gifting Initiative that come up on an occasional basis.
As with all other donation programs, the in-common strategies of dealing with CRA debt collections will be dealt with in depth in the member section of this website.
December 18, 2016
GLGI Tax Court Appeal
National tax lawyer Jeff Pniowsky of Winnipeg is launching a Tax Court appeal for GLGI participants, those who signed CRA's Agreement to be Bound and those who did not.
The representation fee ranges from $900 to $2150 depending on if you received a Notice of Confirmation yet or not.
To read Jeff's perspective and proposal to represent you click HERE
Bottom Line: anticipate a significant interest reduction and a delay in collections proceedings for at least a year.
Jeff's success on similar matters is well presented in the materials included in our MEMBER SITE. There you can also listen to the full 50 minute phone recording on this appeal.
October 20, 2016
2013 GLGI Donor Process
As a review, after a nearly 2 year delay in processing 2013 tax returns, in January CRA began assessing taxpayers with benefit of their donations, including addition of a significant amount of interest.
In early summer, CRA began Re-assessing those taxpayers denying the donations.
As always, the process has been to submit a Notice of Objection which maintains ones appeal rights AND (normally) causing CRA to put on hold any collection activities of the amount under dispute. CRA confirmed receipt of ones NOO with instructions that an appeals officer would contact them.
However, because Parliament changed the laws beginning in 2013, CRA has the ability to collect 1/2 of amounts under dispute related to tax shelter participation plus the amount of interest CRA paid on that half. Recently taxpayers in this situation have seen the 1/2 plus interest appear on their Statement of Account as a reinstated amount.
It is expected that in the near future CRA will begin collection activities on the reinstated amount which normally begins with demand letters and can escalate into more aggressive tactics.
There are no further appeal possibilities to stop collection of the amount but if there are successful Tax Court actions in the future, presumably, taxpayers would be entitled to refund of the reinstated amount.
There is no further assistance Global SaveTax can offer on these reinstated amounts.
May 10, 2016
2012 GLGI Donors Need to Take Action to Receive Refunds
Most 2012 GLGI donors had pretty much given up hope of receiving their rightful refunds after 2+ years of CRA illegally delaying assessments and then nearly another year of them road blocking refunds.
Recently we have become aware of several donors who HAVE received full refunds plus almost 3 years interest. Why them, why now and, possibly, why not you?
As communicated more than a few times there is a DEFINITE PROCESS to follow in all matters CRA. Because CRA lost 2 federal court decisions and an Appeal Court decision on it's battle to deter participation in tax shelters, the speculation is that they are now compelled to comply with the rules.
But the process donors need follow is clear. If you click on the links below, the documents will download so you can review and print, if necessary.
1) File a Notice of Objection to the assessment within 90 days of the mailing date (or up to 1 year with an extension request).
2) After at least 120 days since receiving confirmation that the NOO is accepted, file a Refund Request.
If you want to determine the status of your 2012 appeal and refund request call General Enquiries at 1-800-959-8281.
Estimates are that perhaps fewer than 75% of participants filed an NOO and only about 10% of those filed a refund request.
It's your money and your choice... you can allow CRA to continue on the course it had illegally set to deter participation, or you can choose to retrieve your tax credits.
After that, at some point if it's necessary to fight to keep it... well that will be another matter. Once CRA has your money, however, your negotiation powers are pretty much out the window.
And that's the process!
MARCH 18, 2016
Many readers of these updates are inquiring about the now suddenly not-so quiet GLGI regarding the class action and about a recommendation to use a certain tax negotiation service.
1st, understand that there are multiple parties (including ourselves) who feel they have a right and/or responsibility to inform you of options in dealing with CRA concerns.
Unfortunately some of you confuse the messages from Global Learning (GLGI) and Donors 4 Donors as coming from us, Global SaveTax Consultants. We ARE NOT connected in any way, so please think twice about unsubscribing from our e-news because, in our opinion, we only send useful updates.
But GLGI now coming out with recommendations - after having been silent to both you the donors, and we the fundraising group for well over a year? Not a word about the October 19th judgement and not a peep about the class action over the past 9 months, a span over which it would have been useful for the lost 10's of 1,000's who have been unaware of the judgement and class action. Why?
Short story is that one of their former employees went to work for their recommended tax firm, and lo and behold, just happens to have access to the full GLGI database. Probably that's unethical... or possibly illegal.
Not to say that the suggested firm is or is not genuinely professional, competent and concerned for donors... just that we were all blind sided by this obvious sales pitch.
If you do speak to the group you will find that their full service consists of requesting interest relief and negotiating a payment plan and that there is a significant cost involved.
To us their fee seems steep when you consider that filling in the Taxpayer Relief form costs you about 7 minutes (including faxing) and they, arguably, cannot get you more months to pay the debt than you could get yourself. But perhaps there is value for someone else to do what you are capable of yourself?
To learn more read the section near the bottom of this page titled So What Options Will Taxpayers Have? There you will have access to the tools to get started.
These are our thoughts at the end of an eventful week when the class action claim has been filed, when the parties being sued have been notified via claim and press release and, when a confusing spate of communications regarding a number of tax shelter programs began hitting mail boxes and phones.
MARCH 14, 2016
Almost as soon as CRA issued the long delayed assessments and refunds for 2013 (see below from January 6th) there are confirmed reports that they have purportedly completed their audit and are sending their (as expected and usual) position papers that will act as justification for reassessments without benefit of the charitable donations.
Same old same old... file the Notice of Objection and wait for a decision perhaps years down the line? Not necessarily, for the following reason:
Some years ago Parliament passed a bill which allows CRA to collect or hold up to half the credited/refunded amount
beginning for the 2013 tax year. No one is quite sure how they will execute on this but safe to say one should not expect to
retain all of their just-received refund.
Question about CRA's always questionable tactics...without GLGI having been around over the past year plus, how is it possible CRA completed a legitimate audit of the program and now suddenly they issue their position paper and soon reassessments? Not sure about anyone else but we'd like evidence that theirs was not a 'sham' audit. Just thinking out loud.
JANUARY 6, 2016
There are confirmed reports that CRA has begun issuing full, as filed, refunds to 2013 GLGI clients, with taxable interest included. Depending on if one has direct deposit or receives a cheque from CRA, they may see the refund before the mailed assessment.
2013 is the tax year after the 2012 bloodbath of 2+ year assessment delays, and no one (yet) getting the credits from their donation tax shelters.
All 2012 tax shelter clients MUST continue to fight for the refunds after the ASSESSMENT is received by 1) within 90 days, filing a Notice of Objection and 2) requesting a refund 120 days after the date CRA confirms filing of the objection.
The difference for 2013 is that CRA has lost 2 federal court rulings and its final appeal (2011 GLGI and 2012 Equigenisis cases) regarding the illegality of holding assessments for the primary purpose of deterring participation. Further, not enough time has passed for CRA to complete its sham audits which invalidated the donations from years 2004 through 2012.
In the case of 2013, luck of circumstance and timing as CRA is compelled to assess as filed. Simply, there is no further action required at this time.
Also, 2013 is the 1st tax year that CRA has the right and the Harper government blessing to collect half of amounts under dispute so when the reassessments come down the line for that year one can expect a notice to pay, an opportunity to object… and then a demand for payment of half (this is strong speculation).
Interesting the timing of these refunds about 2 to 3 weeks after someone with refund in hand may have considered participating in a tax strategy for 2015, if CRA hadn’t already killed this ultimate tax deferral industry. Back to their preferred 'gotcha in the box' solutions like RRSP's.
Many will say 'what's the point of getting a refund that they're just going to demand back in the future... with interest?'
The point is (always has been) what if one knew they had 2 to 3 year use of taxes they would have paid anyways? What will a class action case against CRA be able to recover from CRA? Are there asset and/or debt management strategies that could be employed to maximize the benefit? What measures can be taken to delay or frustrate CRA's collection of those tax dollars?
For everyone, but even more for the 2013 GLGI tax shelter clients, anyone not participating in the Merchant Law class action is behind the 8-ball.
OCTOBER 23, 2015
On October 19, 2015 The Honourable Justice F. J. Pizzitelli of the Tax Court of Canada issued his report on the outcome of the GLGI / CRA court case which you can read HERE
Will GLGI Launch an Appeal Before November 19?
After donor's surprise, shock and anger subside, the most common response is 'what about an appeal'. Many have offered to assist with the funding if there was an opportunity to overturn this judgement, or at least to long delay collection.
However, consensus seems to be that the manner in which the judgement was issued makes it almost certain that an appeal will fail due to the judge totally destroying every aspect of the program. There is no grey in his judgement - he ensured that appeal and success of any single element could not overturn the other 4 or 5 major elements.
GLGI lawyer Rahul Shastri has said this: "As you might expect, all necessary advice has been provided to the Lead Appellants. They are aware of their options.
As matters stand it is not likely that the Lead Appellants will fund the cost of an Appeal. Further, it is almost a certainty that GLGI, which has gone well beyond the extent of its litigation fund, would do so. This, I expect, may have a bearing on the Lead Appellants' decision.
Insofar as funding an appeal is concerned, your group can expect costs of the same to run between $300,000-$400,000. The disbursements alone for the transcripts and the reproduction of documentary evidence (numbering thousands of pages) will likely run in excess of $50,000.
Your group should be aware that given the findings of fact made by Tax Court (as I suspect you've surmised from your review of the decision), a successful appeal is far from assured."
GLGI is no longer in business and the promoter has no further funds available for the fight. Robert Lewis has commented:
"I did expect some justice, we all must fight against this tyranny. I am so sickened by this result. We must do something for all. Our next move is a protest about why do you, CRA, even issue tax shelters. I did what I promised. Lets do something as donors. This seems to be our only route. We all started with their issued booklet "the advantages of giving to charity". It seems to me that enough is enough."
"I am very sorry for the result."
What Can We Expect CRA to Do Next?
No one outside of the organization knows what CRA's plans are and any comment would be pure speculation. However, it is likely that CRA will rollout over time the responses to taxpayer appeals (Notices of Objection). Most likely those will be in the form of Confirmation by registered mail of CRA's original reassessing position. Will those bills look like the judgement in the appellants' cases? No one knows for sure, but a worst case scenario would suggest that could be the case.
At the same time, CRA will request payment in full within 30 days or, alternatively, provide instruction for appealing to the Tax Court of Canada.
To a large degree, however, taxpayers who choose to manage their CRA debt much like other debts should not be overly concerned as long as they are responsible and make acceptable arrangements.
Sometimes CRA has demonstrated less than reasonable leniency to debtor taxpayers and has wide and far reaching collection powers including freezing bank accounts, accessing investments and equity and garnishing wages.
Of course for those unable or unwilling to pay, there are several alternative options.
So What Options Will Taxpayers Have? (click the links to learn more)
1) Arrange to pay in full
2) Negotiate with CRA to make payments over time
3) Apply to cancel or waive interest under the Taxpayer Relief provisions
3) Submit an application to appeal to Tax Court of Canada - cost is between $0 and $550 and does not require an attorney to apply
4) File a formal consumer proposal offering to make acceptable payment arrangements
5) File for asset and income protection under the bankruptcy laws
6) Investigate legal specialized strategies to protect one's assets and income from unsecured creditors such as CRA
What Value Would There Be in Approaching MP's and Ministers in the New Liberal Government?
There is much thought along this line. To what effect? Can it hurt? Stay tuned as the ideas are formulated.
Just a few editorial comments about government involvement in donation tax shelters since the mid 1990's:
* It will be the Chretien / Martin government's legacy to have increased the donation limits of one's income from 25% to 75% (why? certainly not for anyone's benefit other than the wealthy); and their legacy to have created the implicit acceptance of the industry through allowance of generous tax shelter rules
* It will be the Harper government's legacy to have professed the value of charity (including those of GLGI's charities); to have not found acceptable manners of ceasing proliferation of tax shelter participation; to have allowed the wealthy to avoid tax by use of private donation strategies; and to have created a scenario of unfathomable hardship for many 10's of thousands of Canadian taxpayers
* How the Trudeau government handles the fallout from what the liberals originally created will help define their legacy
* The absolute field day lawyers will have over the next 10 years, attempting to right the wrongs, will define Canadian Taxpayer Rights for generations to come