 Daylife/AP Photo by Tom Puskar |
When thousands of children hit the baseball diamonds across Canada in the spring to play in various little leagues, they’ll have to prepare for more than just wins and losses. Many could see funding for their uniforms, equipment, umpires and field maintenance cut because of a decision by the Canada Revenue Agency.
The CRA has revoked the charitable status of Little League Baseball Canada because of its participation in a tax-shelter program that has raised more than $82-million for six sports groups…
About 40,000 children play in roughly 140 Little League chapters across Canada. Those leagues rely on the charitable status of Little League Baseball Canada to issue tax receipts to donors and to qualify for grants from community foundations and government agencies.
The CRA has issued warnings about tax shelters, which it alleges are structured in a way to give donors a higher tax credit than the amount they actually contribute. It alleges that “buy low, donate high” shelters are designed to help investors profit from tax credits rather than aid charities.
The shelter involving the sports groups was set up by the Parklane Financial Group, based in Burlington, Ont. According to a summary on Parklane’s website, an investor who donates $2,400 to a fund managed by a Parklane affiliate can end up with $10,000 in tax receipts.
Everybody wants to get in on the act. It’s play money, isn’t it?
Why in the hell should a bunch of bratty kids playing baseball be any kind of CHARITY??????
#1, If its not for donations, who else would pay for all those walmart and tim hortons uniforms?
As a softball umpire, this is subject is right up my alley…
I wouldn’t be surprised if it were due to a court case against the Canadian Little League that was decided yesterday. The court found that LLBC had discriminated against its female participants by paying for the travel costs of the boys’ teams, but not the girls’. Something like that might threaten any organization’s charitable status.
Article found here: http://tinyurl.com/94pvpa
At least Canada isn’t yanking the Little Leaguers.
And you guys (and the occasional gal) thought only you Americans had a shitty Conservative Government.
We have tax breaks on sport now across the country. I get a tax credit for all the fees the kids have to pay to play various sports/activities. This particular tax break is redundant.
Of all the youth baseball/softball leagues out there, Little League is the bully of the bunch.
With all the TV money they must pull in, I doubt they could qualify as a non-profit.
5,
Hey! I KNEW we had a shitty conservative gov’t up in Cannuckistan.
I have a close relative who’s a CRA auditer who specializes in charities, and this doesn’t surprise me at all. Charities are constantly cheating the system, in very scary ways. That’s why I feel no guilt about turning down requests for charity donations, unless I’ve researched the charities very carefully. You think you’re doing a good deed by giving money to charities? Chances are, the bulk of your donation is going to administrative overhead, and little to the actual cause.
#9 – I’ve heard the exact same thing, but specifically about the Red Cross (from an insider at Red Cross). Only a fraction of what you donate to the charity ends up in the hands of those who need it the most. That’s why I prefer giving directly, either with spending my time (which costs practically nothing) or with direct charity (buying a homeless person a meal).
No administrative overhead there!
#9, #10 – many charities have high administrative and overhead costs, and CRA doesn’t have a problem with them — because the donors only get a tax receipt for the amount they donated.
In the case of Canada Little League, donors got tax receipts far in excess of their donation.
There have been many scams like this which get shut down by CRA, and the donors have to repay taxes.
The typical scam works like this: A holding company is set up which makes uniforms for the kids. Lets say it costs $2,500 to equip 1 team. You pay $2,500 to the holding company, which then donates the uniforms to the team, but the value of the uniforms is set at $10,000 – so the holding company gets a tax receipt from the Little League for $10,000 which they send back to you.
Other scams involve legitimate charities without their knowledge or consent. In Canada any donation to a public school is considered a charitable donation. So, once again, a holding company provides something (i.e. textbooks) to the school, but says they are worth much more than they cost to produce. Textbooks are a typical example since they are often very expensive.
But the textbooks provided by the holding company are usually crap, and the schools can’t use them, but they are required to accept all donations and issue a receipt.
Much later, the CRA audits the school, checks out the quality of the textbooks, and then goes after the donors.
In the article it mentions that the annual budget for Little League Canada is may $500-$600K. But the company running the tax shelter has $82 million from investors. That’s clearly a scam.
I don’t get it. Either the guys running things are committing fraud making money off the thing and need to go to prison and spend some quality time with their new husband or they’re not.
This was probably brought about by one of those nuts who thinks kids shouldn’t be taught to be competitive. I seriously doubt that it’s got anything to do with any actual money management practices.