Tax Court of Canada


Taxation

INCOME TAX
Taxpayers purchased from accountants false donation receipts use to claim tax credits

Taxpayers were husband and wife who made charitable donations. CRA believed that receipts for donations were forged by tax preparers. Minister of National Revenue assessed taxpayers under Income Tax Act for 2005-2009 taxation years. Taxpayers appealed. Appeal dismissed. Taxpayers were not in position to make alleged donations given financial circumstances. Taxpayers’ explanations for donations were not plausible. Husband participated in scheme for five years and matter could not be said to be one of momentary lapse of judgment. Wife could not be absolved of responsibility even if she relied on judgment of others. Taxpayers purchased from their accountants false donation receipts that were used to claim tax credits to which they were not entitled. Taxpayers were not instigators of schemes but could not escape tax liability. Assessment for years outside of regular limitation period was justified as taxpayers knowingly made false representations in respect of donations disallowed by Minister.

Vekkal v. R. (Nov. 18, 2014, T.C.C. [Informal Procedure], Robert J. Hogan J., File No. 2013-882(IT)I, 2013-883(IT)I) 246 A.C.W.S. (3d) 723.

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