Recently, the Tax Court of Canada provided a judgment in Richard John Nixon and His Majesty the King, which deals with a leveraged donation arrangement that occurred in 2002 and 2003. The judgment was dated August 22, 2023. Even though the taxpayer said that his facts differed from those in the Kossow case, the TCC did not agree that the differences would result in a different outcome.
With a booking tech industry in Canada, growing technology companies need capital and, as a result, there has been growth in financing tech enterprises.
This case is a reminder that charities need to be mindful of the rules when they issue donation receipts. Donors rely on the receipts in order to claim tax credits/deductions. If the Minister denies a donor’s claim for a tax credit/deduction on the basis that the charity did not include all of the required information, this will reflect poorly on the charity and could harm its relationships with donors.