Court Criticises CRA for Delaying Assessment of Donation Shelter Donations

May 31, 2013 | Robert B. Hayhoe

In a recent case, the Federal Court confirmed that the CRA is obliged to examine and assess a tax return with “all due dispatch” even if the taxpayer donated to a charitable donation shelter.  

In Ficek v. A.G. Canada 2013 FC 502, the taxpayer had participated in a charitable donation tax shelter that the CRA believed was abusive.  In the prior year donors to the same shelter had been reassessed to deny all claimed donation tax credits.  Objections had been filed for some 27,000 donors to the shelter.

Management of the CRA’s Winnipeg Tax Centre formed the view that allowing donations to tax shelters, paying refunds to participants, then auditing and eventually reassessing later was inappropriate.  The CRA therefore began to delay paying refunds to participants in the shelter until the CRA had fully audited the shelter.  Ms. Ficek was informed that her 2010 refund was not likely to be paid until 2013.  As a result, she sought an order compelling CRA to assess her return.

The Court confirmed that the requirement in the Income Tax Act that returns be assessed with all due dispatch has meaning.  Taxpayers are entitled to know what CRA’s position is sooner rather than later.  The Court also found that the CRA was merely pretending that the purpose of the new approach was simply to verify donations – the Court found that the CRA was actually seeking to deter donation shelter gifts.  The Court stated that “the audit is an excuse for delay not a reason for delay (para. 33)”.

It may be that the CRA should have particular powers in dealing with certain kinds of promoted tax shelters.  Indeed, in the most recent Federal Budget (see our March Newsletter) Parliament gave the CRA power to delay paying refunds to tax shelter participants in certain circumstances.  However, at the time that the Winnipeg Tax Centre had started to delay assessments, the Court found that the CRA officials involved were acting capriciously and without legal authority. 


This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.

Miller Thomson LLP uses your contact information to send you information electronically on legal topics, seminars, and firm events that may be of interest to you. If you have any questions about our information practices or obligations under Canada’s anti-spam laws, please contact us at

© Miller Thomson LLP. This publication may be reproduced and distributed in its entirety provided no alterations are made to the form or content. Any other form of reproduction or distribution requires the prior written consent of Miller Thomson LLP which may be requested by contacting