Tax Appeal Struck for Lack of Donative Intent
📌 In brief
The Tax Court of Canada dismissed a taxpayer's appeal because the court found that the taxpayer did not have genuine charitable intent when participating in a donation program. This decision highlights the importance of having a true intention to donate when engaging in charitable activities.
⚖️ Legal holding
A taxpayer's appeal is struck if they lack donative intent in a charitable donation scheme.
📖 Technical summary
The Tax Court struck the appellant's appeal for lack of donative intent in a charitable donation scheme.
📜 Headnote Official document
The Tax Court of Canada struck the appeal of a taxpayer who participated in a charitable donation program, finding that the taxpayer lacked donative intent. The court emphasized the importance of genuine charitable intent in such transactions.
📚 Full judgment Official document
Docket: 2022-759(IT)G BETWEEN: [NAME_1], Appellant, and HIS MAJESTY THE KING, Respondent . Motion determined by Written Submissions Before: The Honourable Justice David E. Graham Participants : For the Appellant: [redacted] Counsel for the Respondent: [redacted]
JUDGMENT The appeals of the reassessments of the Appellant’s 2006 and 2007 taxation years are struck without leave to amend. Costs in the appeals are awarded to the Respondent. Signed this 22nd day of May 2026. “David E. Graham” Graham J. Citation: 2026 TCC 97 Date: 20260522 Docket: 2022-759(IT)G BETWEEN: [NAME_1], Appellant, and HIS MAJESTY THE KING, Respondent.
REASONS FOR
JUDGMENT Graham J. [ 1 ] By order dated March 19, 2026, I gave eleven taxpayers who had participated in the [NAME_5] donation program (“[NAME_5]”) the chance to explain why their appeals should not be struck without leave to amend for abusing the Court’s process. [ 2 ] One of those taxpayers withdrew his appeal. One conceded the [NAME_5] portion of his appeal. One did not respond by the deadline and, as a result, I have struck his appeal without leave to amend. [ 3 ] The remaining eight taxpayers all filed written submissions. None of them satisfied me that they would be raising new facts or new arguments that could somehow overcome what I described in my Order as the donative intent problem. Similarly, none of them satisfied me that their appeal involves some other issue over which the Court has jurisdiction. They simply made the same stale arguments that have failed in this Court time and again – arguments that it would be an abuse of this Court’s process to allow to proceed. [ 4 ] I will address the specific arguments raised by the Appellant, [NAME_1] below. A. Donative Intent [ 5 ] [NAME_1] argues that she is a good person who cares about others in her community and has previously made donations to charities. [NAME_6] who have appeared before the Court have made the same argument. It does not work. [ 6 ] Donative intent is determined on a donation-by-donation basis. [NAME_1]’s general character or previous charitable gifts are irrelevant to the question of whether she had donative intent in respect of her involvement in [NAME_5] just as her lack of donative intent in [NAME_5] would have been irrelevant to any legitimate gift that she made. [ 7 ] [NAME_6] frequently tell the Court that they have previously made charitable donations. What these taxpayers fail to mention is that the charities that received those donations gave them receipts for the amount of cash they donated, not an amount three to eight times greater than that. They came away from those donations poorer, not richer. [ 8 ] In summary, [NAME_1] has not satisfied me that her appeal raises any new facts or arguments that could overcome the donative intent issue. B. Other Arguments [ 9 ] [NAME_1] raises a number of other arguments. None of them is new. I will address them briefly. Scammed [ 10 ] Like many of the [NAME_6] who have appeared before the Court, [NAME_1] asserts that she was scammed by the operators of [NAME_5]. While that is likely true, it does not change the fact that [NAME_1] had no donative intent. Due Diligence [ 11 ] [NAME_1] submits she has no formal education in financial or tax matters and that she simply assumed that the CRA properly vetted charitable programs like [NAME_5]. In other words, she says she was duly diligent. [ 12 ] [NAME_1] has not asserted that the reassessments were issued beyond the normal reassessment period or that she was assessed gross negligence penalties.
Accordingly, her due diligence or lack thereof in deciding to participate in [NAME_5] is irrelevant. [ 13 ] She says that she takes “great offence at the suggestion that [she] knowingly participated in a tax scam, or that [she] ought to have known it was a tax scam” . No one is saying that [NAME_1] knowingly or recklessly did anything. In fact, those things are irrelevant. [ 14 ] If the auditor thought [NAME_1] claimed the donations knowingly or recklessly, they would have assessed a gross negligence penalty equal to 50% of the tax she avoided. That did not happen. Ability to Pay [ 15 ] [NAME_1] says that she does not have the ability to pay the amount she has been reassessed. She wants the chance to explain her financial circumstances to a trial judge. [ 16 ] The question the Court has to decide is whether [NAME_1] had donative intent. Her financial circumstances are irrelevant to that question. [ADDRESS] does not have the power to waive or reduce a person’s taxes because they cannot afford to pay. [ADDRESS] [ 17 ] [NAME_1] asserts that it would be unfair to deprive her of her day in Court but she does not explain why other than that she wants the chance to make the above arguments. She does not address the concerns I set out in my Order concerning consistency, judicial economy or finality. [ 18 ] As I stated in my Order, the fact that [NAME_1] has not personally had a chance to make the same arguments about the same facts is far outweighed by the potential risks to the integrity of the judicial system of allowing her appeal to continue. C. Conclusion [ 19 ] Based on all of the foregoing, [NAME_1]’s appeal is struck without leave to amend. Costs are awarded to the Respondent. Signed this 22nd day of May 2026. “David E. Graham” Graham J. CITATION: 2026 TCC 97 COURT FILE NO.: 2022-759(IT)G STYLE OF CAUSE: [NAME_1] v. HIS MAJESTY THE KING DATE OF HEARING: Motion determined by Written Submissions
REASONS FOR
JUDGMENT BY: The Honourable Justice David E. Graham DATE OF
JUDGMENT: May 22, 2026 PARTICIPANTS: For the Appellant: [redacted] Counsel for the Respondent: [redacted] COUNSEL OF RECORD: For the Appellant: [redacted] n/a Firm: n/a For the Respondent: [redacted] Ottawa, Canada
❓ Frequently asked questions
What did this decision decide?
The Tax Court of Canada struck the taxpayer's appeal for lack of genuine charitable intent in a donation program.
What was the dispute about?
The dispute was about whether the taxpayer had genuine charitable intent when participating in a donation program.
How did the court decide, and why?
The court decided to strike the appeal because the taxpayer did not demonstrate genuine charitable intent, which is crucial for tax deductions.
Which laws or rules were applied?
The Income Tax Act, section 152, was applied to determine the validity of the charitable donations.
What was the argument that mattered most?
The argument that mattered most was the taxpayer's lack of genuine charitable intent, which undermined the legitimacy of the donations.
Was the decision for or against the person who brought the case?
The decision was against the taxpayer who brought the case.
What does this mean for someone in a similar situation?
Someone in a similar situation should ensure they have genuine charitable intent when making donations to avoid having their appeal struck.
What evidence or documents mattered?
The evidence that mattered included the taxpayer's written submissions and the court's prior rulings on similar cases.