The taxpayer was a contractor who was in business for over 25 years. He then started to attend meetings from Paradigm Education Group after talking to a friend. Unbeknown to him, his life was about to take a turn for the worse.
Penalties / Pénalités
Two taxpayers were reassessed, a corporation and its sole shareholder. The shareholder sold financial products and life insurance policies through his corporation although, for some provinces, he had to conduct business as a sole proprietor due to provincial regulations.
In this case, the taxpayer withdrew money from his RRSP in 2004. In order to offset the tax he would have had to pay, he made a charitable donation of $65,000 to the Canadian Literacy Enhancement Society (“CLES”). In 2008, the CRA reassessed the taxpayer’s 2004 taxation year to disallow the federal and provincial tax credits he claimed in relation to that payment.