The Tax Court has concluded that the donation program known as Global Learning Gift Initiative (or “GLGI”) is in fact a “sham”. The GLGI website states that this program works as a “gifting arrangement tax shelter where Canadians are able to utilize available tax incentives by donating courseware licenses and cash to Canadian registered charities”. The program also advertised that donors would be able to “enjoy possible tax savings made available under the Income Tax Act” by issuing donation receipts to those who have participated. After being subject to an audit by the Canada Revenue Agency (“CRA”), they found that the GLGI program was illegitimate and that the program was in reality pocketing 20% of the donations.
The Tax Court ruled that taxpayers who participated in the GLGI program did so because of the tax benefit they would receive, and not for the purpose of donating to charity. As a consequence of this ruling, taxpayers who donated to GLGI will not be entitled to a donation credit for the amount of money they gave GLGI.
If you are a taxpayer who participated the GLGI program call us at 1-866-278-8424 to find out how this ruling affects you.