Charity tax scheme resurfaces in Edmonton
Last Updated: Tuesday, July 20, 2010 | 8:25 PM MT
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An organization touting its tax-shelter scheme was back in action Tuesday night in Edmonton, attempting to woo dozens of people with promises of major tax savings.
A shot of the website for FAST, which claims to help people suffering from HIV/AIDS in sub-Saharan Africa through a tax-shelter scheme fuelled by money from Canadians. (CBC) CBC News has previously exposed the flimsy charitable machinations of Fight AIDS Save Taxes, or FAST.
In February, a CBC investigative team placed a hidden camera in one of the group's Edmonton sessions.
The organization, headquartered at a remote strip mall in the suburb of St. Albert, solicits donations and says it uses that money to obtain loans to purchase anti-retroviral drugs for AIDS patients in sub-Saharan Africa.
Donors are issued tax receipts for amounts that are several times more than what they gave, which they can then use to claim large tax credits on their income tax returns. The group hosts information sessions across the country to pull in new donors, and says it is merely "exploiting an anomaly in commerce."
On Tuesday night, FAST held a session at the Fantasyland Hotel at West Edmonton Mall. FAST claims that in the last five years, it has recovered $165 million for Canadians by exploiting the tax system.
A CBC hidden camera taped representatives from Fight AIDS Save Taxes, or FAST, at a session in an Edmonton hotel in February 2010. (CBC) The Alberta government began an investigation into FAST in 2008, while the Canada Revenue Agency has also had the organization on its radar as part of a wider probe of the multibillion-dollar charity tax-shelter sector.
In May, the CRA revoked the charitable status of an organization affiliated with FAST, the Toronto-based Orion Foundation, after finding that it abused its powers to issue tax receipts and operated mainly for the private benefit of its own directors and tax-shelter promoters.
Debra Jakubec, executive director of HIV Edmonton, a non-profit charity that's worked on AIDS issues for 25 years, said people should do a little research before donating to a charity in exchange for a tax break.
"I would be concerned about, you know, when people or organizations use very broad terms like, 'The money's going to Africa.' Africa's a very big place, so you would want to know where that money is going on the ground and how it's going to be used," she said.
Tax experts said people caught making donations through bogus schemes can be ordered to repay the tax to the government, plus interest and penalties that will set them back even further.
CBC's calls to FAST were not returned. The Canada Revenue Agency also did not return calls asking why it hasn't shut down the tax-deduction scheme.
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