Each and every year, Canadians donate hundreds of thousands of dollars to various charities to assist come tax time. This strategy can help reduce assessed monies owed and level out overall income. However, as we’ve seen with the Global Learning and Gifting Initiate, sometimes those charities are less than reputable and turn out costing taxpayers far more than they initially intended.
Over the course of the organization’s operations, Canadians who donated to the Global Learning and Gifting Initiative received substantial income tax deductions for both the value of their cash donations as well as the value of the job training software they purchased.
However, after the courts ruled that the value of the deductions was overrated and that those involved did not actually have the ‘donative intent’, it was decided that the program was an illegal tax scam. The CRA has since disallowed the GLGI deductions and is ordering those taxpayers involved to pay $5.7 billion in taxes, interest and penalties.
While the issue is still in court, with various lawsuits pending and the outcome uncertain, interest on these reassessed tax debts is still accruing.
If you are part of the GLGI cohort, but your file has not yet been dealt with, it might be prudent to consider filing a Taxpayer Relief application. Although this will not reduce the total amount of the debt, it can reduce the interest and penalties if accepted.
To qualify, you will need to be able to prove that you were unable to meet tax obligations due to:
- extraordinary circumstances
- actions of the CRA
- inability to pay or financial hardship
- other circumstances
The nature of the GLGI tax debt is unlike any other tax debt. It is far more immediate and it needs to be addressed far quicker than would be the case with other assessments. With GLGI, the CRA is significantly out of pocket, because they issued refunds, and since the court has ruled this a scam the CRA is not amenable to a lengthy discussion on repayment. The quicker you can deal with the issue, the better.
The experienced team at Tax Solutions Canada has already helped several of those impacted by the GLGI rulings, and we urge you not to wait. If you anticipate an assessment, or just want some advice on how to approach the situation, including the benefits of Taxpayer Relief, we can help. Get in touch with us today by calling 1-888-868-1400.