CRA revokes charitable status of Montreal foundation.

Francis Jude Wilson Foundation, a Montreal area charity, has lost its registered charity status, the Canada Revenue Agency announced. CRA's Charities Directorate accuses the foundation of lending its receipting privileges for inappropriate private benefit.

The agency issued receipts for $10,560,650 in 2005 and 2006. The money was received from tax shelters, but the actual cash returns for the foundation were only $105,000 for the two years. The charity incurred professional fees of $105,129 and $129,726 in 2005 and 2006 respectively.

The CRA Charities Directorate says, "it appears that the preponderance of the Charity's funds are directed primarily to the benefit of the tax shelter promoters and to the promotion of the tax shelter arrangement while a scant percentage reverts back to the Charity."

The Charities Directorate also states, "In our view, the arrangement described above, particularly the insignificant returns realized by the Charity and its lack of control over its own 'investments', demonstrates a willingness of the Charity to lend its receipting privileges for the inappropriate private benefit of the tax planning donation arrangement and its promoters, which is not charitable at law."

The CRA is reviewing all tax shelter-related donation arrangements (for example, schemes that typically promise donors tax receipts worth more than the actual amount of the donation), and it plans to audit every participating charity, promoter and investor.

www.cra.gc.ca