Please see the latest update at the bottom of this page:
In October 2012, the CRA announced retroactively a new policy regarding Gifting Tax Shelters (GTS). They decided (for the primarily purposes of deterring taxpayers from participating) to withhold taxpayers returns until they audited the tax shelter. This has caused severe hardship for many people since years go by with no tax assessment. The CRA's GTS policy has been challenged in Federal Court several times and the CRA has lost. It has been ruled by two Federal Court Justices that the CRA does not have the authority to withhold taxpayers returns for years for the purposes of deterring participation. You can see the Federal Court Decisions below by clicking on the Ficek or McNally links.
If you are one of those taxpayers who has their tax returns for 2012, 2013, or 2014 being withheld by CRA, we suggest you write to CRA again and request that they process your return immediately, in accordance with the law as ruled by Federal Court Justice Phelan and Justice Harrington in the above mentioned cases. To assist you with this task, we have prepared a "Template Letter" that you can download below and modify as required to incorporate your own personal information and the appropriate tax year. One version is in Word format so that you can easily change your personal information. The other is in pdf format where you can just write in your personal information. Use the format that you prefer; the two letters are identical. We suggest you send this to the CRA tax centre that processes your return. If we get enough people complaining about the GTS policy again, and citing the Federal Court decisions that rule it illegal, we are hopeful CRA will capitulate and revert back to their original treatment of taxpayers who participated in registered profitable gifting arrangements.
If you have already received your assessment for 2012, CRA no doubt has denied your donation. In this case, we have a different plan that will help you get your refund, but it will take some time. Details are shown in the Members Section of this website.
IMPORTANT NEW SUGGESTION. July 2015
We are also recommending that you write your Member of Parliament to ask him/her to intervene on your behalf to have the CRA process your tax return as required by law. We have attached another "Template Letter" to assist you with this action. If you do not know your Member of Parliament, you can find it HERE with your Postal Code. You address your letter to the House of Commons in Ottawa and no postage is required on the letter. It is an election year, so Members are likely to be more attentive. The Liberal Party, for instance, has made reform of the CRA one of their election campaign planks. PLEASE TAKE THIS INITIATIVE AS SOON AS POSSIBLE. Again, if we get enough voters complaining, it will make a big difference.
SEPT 23, 2015 Update
CRA has appealed the McNally decision and therefore it cannot set a precedence until the Appeal Court has adjudicated on it. CRA appears to be including the Ficek case in their McNally appeal, however, they did not appeal that case. PGC will be monitoring the appeal and report what we can find out.
Many members have reported back to us the results of their letters to their Member of Parliament. Most MP's have just regurgitated the CRA message, taking it as gospel. We should not accept responses like that.
NOV 10, 2015 Update
The Federal Court of Appeal has rejected the CRA's appeal of the McNally decision. This is GREAT NEWS. Now we have 5 Federal Justices all agreeing that the CRA cannot continue its GTS Policy for its stated purpose of deterring taxpayer participation in registered Gifting Arrangements. You can see the decision below. But will CRA comply?? They have a history of doing their own thing. We have therefore written another letter to the new Minister of National Revenue, asking her to intervene and kill the GTS Policy. Our letter is shown below as well. If you feel you are the subject of this form of CRA punishment, we encourage you to write a similar letter to the Minister. We truly hope the CRA will now comply with the law and abandon their punishing GTS Policy.
MAR 19, 2016
We finally received a response from the Minister of National Revenue (MNR) to our letters of November 10, 2015 and January 15, 2016. These letters are all posted below. The response from the MNR is very disappointing. She has basically reiterated the CRA position on gifting arrangements, restated facts that are now known to be untrue, and not answered our direct questions regarding the Federal Court decisions. The MNR states that the CRA will be advising affected taxpayers directly of the impact of these Federal Court decisions. We know of no taxpayer who has received such direct notification. If you participated in a Gifting Arrangement in 2012 and later, and you have received a letter from CRA advising of the impact of the Federal Court cases on the CRA GTS policy, we would greatly appreciate it if you would contact us.
In spite of the Minister's reluctance to admit it, we consider this advocacy cause successfully completed. We are of the opinion that CRA will no longer delay taxpayer returns for the purpose of deterring participation in Gifitng Arrangements.