Ottawa alleges Toronto charity is running a tax-shelter scheme

The Canada Revenue Agency shut down a charity that was taking part in a tax sheltering scheme. The Choson Kallah Fund received numerous donations of malaria and other pharmaceutical drugs bought overseas at a greatly reduced price. Then the charity sold these drugs for $177 million at a higher Canadian retail value. The charity kept 1% of the total as a fee, which is about $1,770,000. In a letter that outlined the allegations, the Canada Revenue Agency stated that the Choson Kallah charity was "promoting a tax shelter scheme. The willful promotion of the for-profit scheme violated its charitable status. The charity was being run as a business instead of a non for profit organization. In 2003 the Choson Kallah had about $6 million in total revenues, donating money mostly to Jewish organizations and schools. None of the donations exceeded $25,000. The Choson Kallah is no longer a charitable organization and is now being taxed as if it was a business.

I think this is mainly the government's fault. They need to realize that their policies have loop holes where tax evaders can slip through. I think the person who was running the Choson Kallah is very lucky to not have been prosecuted yet. Isn't it a crime to make a profit from a charity? There has to be some type of fine he must pay at least. I know if anyone evades taxes for years and gets caught, they have to pay those taxes back plus interest. If they can pay it back they need to get a bank loan or be put in prison. Not only does the owner of the organization need to pay a fine for deceit, he needs to pay the taxes that he was exempt from because his business was registered as a charity.