The Global Learning Giving Initiative (GLGI) was the single largest registered tax shelter/gifting arrangement in Canadian History. They had well over 20,000 participants over a period of time exceeding 10 years, including the 2004-2013 taxation years.
The Canada Revenue Agency, following it's standard protocol regarding gifting arrangements, reassessed all of these participants and denied the charitable gifts made under the GLGI program. Most of the participants filed Notices of Objection and waited for the GLGI promoter to defend them in the Tax Court of Canada. To their credit, GLGI did just that.
In the Mariano v. The Queen, 2015 TCC 244 (Can LII) , the Tax Court heard appeals from taxpayers that participated in the GLGI program for the 2004 and 2005 taxation years. The Court found that the Appellants did not have the donative intent to make their gift, did not own or transfer the property (ie the Licenses) and that the GLGI program was a sham. The Court also found that the value of each license donated by the Appellants was actually only 26 cents per license. This decision was not appealed to the Federal Court of Appeal.
We understand that some GLGI participants accepted the Offer to Settle made by the CRA (where the cash gift was accepted and some interest was waived), or agreed to be bound by the result of the Mariano decision. However, we also understand that the majority of GLGI participants did neither.
As a result of the Mariano decision, it now appears that CRA is issuing Notices of Confirmation "en masse" for GLGI participants for not only 2004 and 2005 but for all years. It is a massive undertaking, that will seriously affect the financial well being of thousand of Canadian taxpayers.
We understand there are several firms advising GLGi donors that since the Tax Court has already rendered a decision, the taxpayer has no option but to pay up. This is NOT TRUE. You do still have other options. In some cases, these firms offer their services to negotiate payment terms or interest relief.
The purpose of this message is simply to make you aware of the GLGI initiative that is being started by Toronto tax lawyer Duane Milot of Milot Law and E.G. Gilmore and Associates Inc.
We understand that they are trying to put together a group of GLGI participants to:
(1) try to re-litigate the 2004 and 2005 taxation years and
(2) litigate the 2006-2013 iterations of the GLGI program for the first time.
They are not connected in any way to the GLGI promoter. They are trying to litigate a number of “test” cases or representative files on a cost-effective basis funded by a larger group. They believe that there are differences in the various versions (years) of the GLGI program and that all participants should not be bound by the Mariano decision. It is our understanding that they would try to adduce better overall evidence and obtain stronger and more comprehensive valuation reportsPGC does not offer an opinion on the chances of success of the Milot Law – E.G. Gilmore and Associates Inc. Initiative. However, in many cases, analyzing one loss can provide the roadmap for a new and different approach with better results.
You can see more details of the Milot initiative and how to apply to be part of it by clicking on THIS LINK.