What is the test for disentitled income tax credits?
Canada (Federal), Canada
The following excerpt is from Herring v. The Queen, 2022 TCC 41 (CanLII):
The Respondent also relies on David v. The Queen, 2014 TCC 117 (“David”), where taxpayers had been solicited by a tax return preparer to make donations to a registered charity but were only required to advance 10% of the face value of the receipt in cash. The Minister disallowed the tax credits in their entirety.
Justice Woods relied on Canada v. Doubinin, 2005 FCA 298, finding that inflated tax receipts are not benefits that vitiate a gift and that, if there is no benefit, subsections 248(30), (31) and (32) do not apply. She concluded that each appellant was entitled to a tax credit equal to 10% of the face value of the receipt.
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