So I went to the meeting last night, and it was actually very informative.
The legal challenge to this program hinges on the definition of a "gift." Ron Olsthoorn (the president of ParkLane Financial Group, the guy who was running the meeting last night) cited several instances of case law which support his assertion that the donors "motivation" is irrelevant, despite the CRA trying to claim that if your sole motivation for making a donation is to receive a tax benefit, then it is invalid.
He also mentioned a "test case" that is already before the courts that would establish the definition of a "gift" and set the precedent for the program we participated in. He has consulted with "hundreds" of lawyers and accountants in constructing the program, and is confident it will hold up in court. The key factor is that there is no property being re-valued, but merely actual cash, whose value is inarguable.
The fly in the ointment, however, is a bill (C-10 or C-33, I can't remember, one was an old one that died and was revived as the other) which is already at second reading in the Senate that would severely limit the amount donors are able to claim (restricting it to the actual cash donation, and excluding in-kind donations). He made it sound like it is currently a race to get the case decided before the bill passes final reading, since it would be retroactive to 2003.
Regarding my own situation, he indicated that even though my "review" is completed and no adjustment is necessary, I could still be "re-assessed" for up to 3 years.
The timeline of my events are like this:1.
Fall, 2006, made an $11,200 donation to charity, applied to be admitted to this Trust, and signed papers directing them to donate my trust units to the same charity, if I'm admitted into the trust.2.
I was admitted into the trust, my units were given to the charity and redeemed for another $30,000. I received 2 receipts: 1 for $11,200 and 1 for $30,000.3.
Spring, 2007 - Filed my 2006 taxes with H&R Block, claimed the donations and a huge refund. Received my Notice of Assessment, and my refund for the full amount I claimed.4.
August, 2007 - Received a letter from the CRA indicating my participation in the ParkLane charities was being reviewed, and asked for supporting paperwork, which I provided.5.
September, 2007 - Received another letter from the CRA, saying I'd been selected for an audit (yes, they used that exact word, "audit"), and that an auditor would be contacting me shortly. To date, no auditor has contacted me. They included literature describing fraudulent donation schemes, and saying that everyone who participates will be audited, and to date, everyone who's been audited has been required to repay everything in full, with interest and penalties. On the same day I received this letter from the CRA, I received a letter from ParkLane, reassuring me that the CRA isn't talking about their program, but rather the "re-valuation" schemes.6.
October, 2007 - I received a letter from CRA returning my documentation, and stating that they'd completed my review and found that no adjustment is necessary.
So where am I now? I have not yet received a "notice of reassessment", nor has this auditor contacted me, despite the letter 2 months ago indicating he/she would be contacting me "shortly." I still have my refund, sitting in a bank account, and I want to put it in my RRSP before the February deadline, but if I receive a Notice of Reassessment, I'll need access to the cash to repay it. I'm anxious for the case to be decided so I'll know whether or not we'll have to repay the money.