The appellant participated in a leveraged donation scheme and claimed a charitable donation amount of $39,398 for the 2008 taxation year.
The Minister reassessed the appellant beyond the normal reassessment period, denying the claim on the basis that certain persons were liable to an unpaid penalty under subsection 237.1(7.4) of the Income Tax Act.
The Tax Court found that while the scheme was a tax shelter, the Minister failed to prove that any of the assessed persons committed the prohibited acts of selling, issuing, or accepting consideration in respect of the tax shelter prior to the issuance of an identification number.
Consequently, the Minister was not entitled to reassess beyond the normal period, and the appeal was allowed.
