Friday, September 5, 2008
The Globe and Mail reports that the Canada Revenue Agency has revoked the charitable status of the Canadian Amateur Football Association, better known as Football Canada, because of the organization's participation in a multi-million dollar "tax shelter." According to the article, the shelter involved a for-profit company that solicited donations for Football Canada and other amateur sports groups and then invested the funds for twenty years. The donors received a tax receipt that apparently permitted them to take an immediate tax deduction, while the sports groups received annual "royalty" payments plus, at the end of the twenty year period, 80 percent of the funds (donations plus earnings). The for-profit company, ParkLane Financial Group, keeps the remaining 20 percent of the funds plus a management fee and a one percent fee on all donations raised. The official reason given by the Canada Revenue Agency for the revocation of Football Canada's charitable status as a registered Canadian amateur athletic association is that Football Canada issued donation receipts that contained false information or were otherwise not in accordance with the applicable legal rules, according to a press release from the agency.