Canadian tax authorities have revoked the charitable status of the African Computer and Technology Literacy Awareness Program (ACTLAP) Inc., ruling that it was largely just operating as a tax shelter.
The Canada Revenue Agency (CRA) said Friday it will revoke the registration of the ACTLAP, a charity based in Mississauga, Ont., effective Feb. 21.
In a letter announcing the decision, the CRA says that its audit of the organization found that it “operated primarily for the non-charitable purpose of furthering a tax shelter donation arrangement, the Mission Life Financial Inc. Canadian Relief Program.”
The CRA says that between Mar. 1, 2008 and Feb. 28, 2010, the organization “improperly issued receipts totalling over $8.6 million for purported donations of cash and pharmaceuticals, which were not legitimate gifts.”
The agency found that it “significantly over-reported the value of the alleged property, resulting in grossly inflated tax receipts,” that it failed to demonstrate that it had actually received the pharmaceuticals, and that most of the $250,000 in cash that it received was paid to the promoters of the tax shelter and to its directors or related parties.
The CRA notes that it audits every gifting tax shelter and “has not found a single arrangement” that complies with the tax laws.