We last wrote about the Global Learning and Gifting Initiative in December 2014 – you can check that blog out here (https://taxsolutionscanada.com/legitimate-donation-or-fools-gold-the-current-state-of-the-global-learning-and-gifting-initiative-glgi/), and nothing new has occurred since we wrote – most people’s cases remain pending and objections are being held in abeyance while the test cases are plodding through the court system.
Canada Revenue Agency (CRA) has sent settlement offers to thousands of taxpayers who are involved with GLGI.
In simple terms, CRA’s offer calls for most GLGI-based tax reductions you enjoyed to be repaid. CRA has also offered to drop the interest claim for the period from the date of their reassessment until the date the offer is processed.
Many GLGI participants have contacted us asking if the offer makes sense for them and what will happen if they cannot repay the full amount immediately.
Nobody knows how the Global Learning and Gifting Initiative court decisions will actually be decided. If you do not accept the surprisingly generous CRA offer and CRA wins the case, you will be facing a tax debt significantly bigger than the settlement amount. It may be possible to fight the interest portion of this much larger amount but that is what CRA is offering you now.
So, the two main reasons we are seeing that some GLGI participants do not want to accept the offer are:
- They are gambling that the test cases will somehow win against CRA.
- They cannot afford to repay the amount.
To make a proper decision, each person’s situation needs to be evaluated on its own merits by an independent professional – one with balanced experience in both obtaining fair repayment terms and understanding the taxpayer’s financial and tax position.
Fortunately, we have been able to set many of these individuals on the right path. To be open, in most cases we have advised that the offer should be accepted immediately. We have then helped the taxpayer obtain fair and reasonable payment terms with CRA while protecting the taxpayer from heavy handed CRA collection action.
The GLGI waters have proven to be very difficult to navigate, and the complexities make approaching the situation appropriately incredibly important.
At Tax Solutions Canada, we can help you better understand the language used by CRA and what it will mean to deal with their requirements when it comes to GLGI cases. Call us today at 1-888-868-1400.