Gift Giving Tax Shelters are a Widespread Problem. You're Not Alone

Our team is composed of former tax shelter donors and former executives who served on the boards of charities and tax shelters. We did some research and found there was no true third-party information on tax shelters we truly trusted. So, End Tax Shelters NOW happily illustrates all the sides and facts you need to be educated on Canadian tax shelters so you are ready to speak with a professional regarding your personal tax issues.
No, we are volunteers who have been in your situation before. We learned a lot about the poorly known world of tax shelters throughout the arduous process of paying back the CRA and wanted to put all this information together on one site. Thus, End Tax Shelters Now was born.
We have patronage who funded this to help donors like you and me.
We are a group of previous donors and charity participants providing a Public Service Announcement to residents of Canada. We have gone through this before and we want to inform you of your options. No fees required. Completely free of charge.

One of the worst parts of this business is that the companies and promoters who sold these tax shelters are often long gone by the time the complaints start pouring in. So, our team wanted, no, needed to, update others who are going through what we went through on all the options they have at their disposal.

Creating the End Tax Shelters NOW website is much easier than calling and/or emailing all the 100,000+ donors who participated in tax shelters over the past 20 years, and more are still joining every day. You can still sign up and join a tax shelter in Canada… PLEASE DO NOT.

Many people’s emails have changed and mailing is not feasible with our current budget. This site is the cost-effective way for our team to keep everyone updated so they can always get the facts they need.

Our main goal is to provide free and valuable information regarding gifting tax shelters in Canada. However, we do have a team of volunteers who can provide assistance and arrange for you to meet with an accountant or lawyer who will do a FREE assessment (no hidden fees or costs) of your situation.

You can and you should meet with a lawyer regarding your situation. However, most (good) lawyers bill out at $500-1000/hour, and many are not well educated on and lack experience dealing with CRA tax shelter cases.

We get you prepared to speak with an expert or specialist due to our experience to save you time, money and worry.

Who you meet with depends upon your personal situation. If you decide you’d like to speak with our team, you will meet with one of our volunteer specialists who will assess your tax shelter situation and list out your options.

The CRA regularly audits tax shelters every few years, and the earlier you resolve your own situation, the better. Remember, the interest and penalties which are accruing on your tax shelter “tax breaks” will not stop until the matter is resolved.

We’re here to help.

Canadian taxpayers should remember that their tax reporting obligations are based on a self-reporting system and therefore; the onus of proof rests with the individual taxpayer to support their own reporting.  That means that the onus and responsibility does NOT rest with the CRA, but on YOU individually.

Our volunteer team strives to compile and provide some tools that have helped them deal with this burden of tax shelter debt.  (They have all been successful in eliminating their debt and want to help).  They will share this with you.  Totally free as they are “paying it forward”

General Tax Shelter Faq's

Answers courtesy of the Canada Revenue Agency

Tax shelters are defined in the Income Tax Act. In very general terms, a tax shelter includes either a gifting arrangement or the acquisition of property, where it is represented to the purchaser or donor that the tax benefits and deductions arising from the arrangement or acquisition will equal or exceed the net costs of entering into the arrangement or the property. Also, a gifting arrangement where the donor incurs a limited recourse debt related to the gift will be a tax shelter. Generally a limited recourse debt is one where the borrower is not at risk for the repayment.

A tax shelter identification number is intended only to track the schemes and participants and does not entitle the participants to any of the benefits related to the tax shelter.

Every promoter of a tax shelter has to include on every written statement that refers to the identification number of the tax shelter the following statement:

“The identification number issued for this tax shelter shall be included in any income tax return filed by the investor. Issuance of the identification number is for administrative purposes only and does not in any way confirm the entitlement of an investor to claim any tax benefits associated with the tax shelter.”

A promoter of a tax shelter must acquire a tax shelter identification number before selling the tax shelter property. In addition, the promoter must provide the Canada Revenue Agency (CRA) with the list of investors or participants, including their names, social insurance numbers, and other prescribed information.

The identification number allows the CRA to track these arrangements and the taxpayers who participate in them. All tax shelters are reviewed, and if they are considered potentially abusive, audits are carried out.

Promoters who file false or misleading information in their application for a tax shelter number, or that sell, issue, or accept consideration in respect of a tax shelter before an identification number has been issued, are liable to a penalty. While this penalty or related interest is outstanding, no participant in the tax shelter can claim the tax benefits associated with the tax shelter.

Mass marketed gifting tax shelter arrangements are made for the primary purpose of avoiding the payment of the required taxes rather than raise funds for charities. Mass marketed gifting tax shelters include schemes where taxpayers receive a charitable donation receipt with a higher value than what they paid. This can typically be four or five times their out of pocket cost.

The Canada Revenue Agency (CRA) audits every mass-marketed tax shelter arrangement and no arrangement has been found to comply with the Income Tax Act.

All charities must obtain a charity registration number from the CRA to be able to issue official donation receipts. This is different from the tax shelter number, which must be obtained by the promoter of a gifting tax shelter arrangement. All registered charities, including those involved in gifting tax shelter arrangements, must include their charity registration number on all official donation receipts they issue. However, even if a donation receipt is issued by a registered charity, if the receipt is issued for transactions that do not qualify as a gift, or for an inflated amount, the amount on the receipt would not be allowed.

Various types of gifting tax shelter arrangements, some including the issuance of promissory notes, some with the donation of in-kind property, have emerged over the last few years. Although they may be different in their design, these arrangements have similar results: charitable donation receipts are issued to participants for amounts greater than they paid. In all cases, the CRA has reassessed the participants and denied the donation tax credit as claimed.

The Federal Court of Appeal has rendered three significant decisions involving promoted gifting tax shelter arrangements that promised a profit to participants in return for a payment. In each case, the cash benefit for the taxpayer exceeded the taxpayer’s cash payment. While each taxpayer argued that their arrangement met the requirements of the law, in each case, the courts concluded that the taxpayer’s donation tax credit was zero. The three cases are:

Anyone considering entering into a tax shelter arrangement should obtain independent professional advice from a tax advisor before signing any documents. In addition, they should:

  • know who they are dealing with, and request the prospectus or offering memorandum and any other documents available in respect of the investment and carefully read them;
  • pay particular attention to any statements or professional opinions in the documents that explain the income tax consequences of the investment. Often, these opinions will tell the investor about the problems that can be expected and suggest that the investor obtain independent legal advice;
  • not rely on verbal assurances from the promoter or others-get them in writing; and
  • ask the promoter for a copy of any advance income tax ruling provided by the CRA in respect of the investment. Read the ruling given and any exceptions in it.

Individual taxpayers should be aware that the CRA could normally reassess returns up to three years after the date of assessment. The fact that tax shelter benefits were accepted on initial assessment should not be interpreted as acceptance of the claim by the CRA. It may take more than one year to complete a tax shelter audit.


“This site/articles provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a tax lawyer or accountant specializing in tax shelters.”