 |
N.S. man embroiled in charity tax scheme
 |
CBC
A Nova Scotia investor is one of nearly 10,000 people who are at odds with the Canada Revenue Agency over a controversial tax shelter.
Rick Young invested thousands of dollars in Parklane Financial Group Ltd., a tax shelter that promised large returns to investors and a payoff to charities.
Young, who describes himself as a cautious investor, said he decided to invest in the shelter because his brokerage house watched the shelter for a year before recommending it to its investors.
"It's not like it just came on the market and, 'Bang, let's go.' Even the folks that I dealt with that I bought it from, they invested in it themselves," Young told CBC News.
"If you've got registered investment brokers who figure it's valid enough to invest in, it's usually a pretty good sign that they've done their homework and they're comfortable with it as well."
Young invested in Parklane Financial Group Ltd. for three years and it operated as he was told it would — he invested a few thousand dollars each year, then got his receipt and his tax refund.
He was so pleased with the results, he started telling others — including his elderly mother — about the tax shelter.
Then, Young got a notice from the Canada Revenue Agency, questioning the three-year-old return from when he first participated in the tax shelter.
Young said his return had already been reassessed — and passed — at least once.
"The rules are such that CRA has the ability to go back up to three years from the date that their initial assessment was issued and do a reassessment. So it wasn't until you were within about a week of that three-year max that all of a sudden you received the notice of reassessment," he said.
"They not only said, 'By the way, we're not only disallowing this thing, we're reassessing you. We're making it effective back to the original date of assessment.' So you're starting off with three years' interest tacked on."
Young estimates he and his mother owe the Canada Revenue Agency about $50,000 — the money they've paid into the shelter, plus interest.
He is fighting the assessment and has not yet paid the money back.
While many of the investors are fighting their individual assessments with the Canada Revenue Agency, Young and several other Nova Scotian investors are also part of a class action lawsuit against Parklane Financial Group Ltd.
The lawsuit, which was certified by an Ontario judge in January, includes all the investors unless they choose to opt out.
One of the defendants named in the class action lawsuit is Edwin Harris, one of Canada's leading tax lawyers.
A letter from the Halifax-based lawyer was included in Parklane Financial Group Ltd.'s information package to investors, and Young said Harris's opinion was one of the reasons he signed on to the tax shelter.
"We were provided, as part of the Parklane package, sort of a letter of opinion which I guess is the comfort letter," said Young.
"It basically states that [Harris] has looked at everything and in his opinion, looking at it, everything was above board and legal and should fly within the tax rules."
Harris and two law firms he's worked with have said the lawyer has done nothing wrong, and the case will be vigorously defended.
A spokesperson for the Canada Revenue Agency told CBC News that while the organization does not comment on specific cases, similar investment schemes in the past have been ruled inappropriate as tax shelters.
739 page views
|
|
|
|