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COIP - 2007 Tax Shelter Obligations

91K views 131 replies 37 participants last post by  Paythepiper 
#1 ·
Hi.

I participated in a tax shelter program through Canadian Organization for International Philanthropy (COIP) in 2007. Long story short: I received a generous return from CRA for that year. I was then audited and it was deemed that the tax shelter program was not lawful and ordered to repay the money I received from CRA plus interest. I repaid the money to the CRA and subsequently filed an appeal, which was coordinated by COIP.

In the couple years I was waiting to hear back on the appeal (I was advised it would take a while) I received a letter from a company called SunRX, stating that in order to fulfill the obligations of my program, I now have to repay the loan, either by a money payment or by supplying pharmaceuticals (medication) of equal value. This was quite a shock to me since it has been almost 6 years and I was convinced that my obligations were fulfilled for quite some time. So now this company wants me to pay around $1,000 including interest. I am very leery of this attempt to extract more money from me since COIP's charitable organization status has been revoked by the CRA, and I read an article in the newspaper some years ago basically stating that COIP's tax shelter was a sham.

This tax shelter cost me upfront around $2,400, then I paid about $700 in interest to the CRA when I was asked to repay the return I received. And now a company claiming to be representing my interest and to fulfill my program obligation, wants me to pay another $1,000. They have notified me in the last correspondence that if I don't settle the account by March 1, 2014, that they will forward this case to a collection agency.

I feel as if this tax shelter program was a hoax, I have no evidence (other than shiny, well pamphlets and brochures stating pharmaceutical aid was being sent to Africa) of the validity of this program and it doing what it claimed to be doing, that is helping people with HIV/AIDS in Africa. Now this company wants more money, and people like me, reluctant to pay MORE money to (what could be a fraud - since it seems to be) are afraid of the threat of a collection agency coming after us, and tarnishing our credit rating etc...

If anybody has any advice or experience with this I would be interested in hearing it. Thanks in advance.

Krystian
 
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#2 ·
I haven't had any experiences with COIP or any other tax shelter, but do have some thoughts.

Did you actually contribute the money, in cash, that you claimed as a tax credit? It seems that CRA rightly has a concern with tax shelters in that people were donating, say $1,000, and the company would issue a receipt for $10,000. The fact that you paid $2,400 to the shelter should have generated a credit of $960 for which CRA is asking for interest of $700 implies you actually claimed more than $2,400 on your tax return.

The new demands to extract money from you now seem odd. Did you actually sign a contract with them for services or to acquire a loan? If you did, you may have to pay up. If not, why just politely decline to pay?
 
#4 ·
You were not the only one. A lot of people did fall for this scam or similar ones. Its unfortunate but true

It was right for the government to stop this sort of abuse. There are similar schemes still popping up, and when the CRA shuts them down, they will also pay dearly. A husband of one of my coworkers years ago was involved with a similar scheme. I remember when CRA came to their door, they ended up having to take out a mortgage to pay CRA back.

This year they will plan to take things even further. Anyone who plans to get involved with any similar organization, be prepared to hand over the "Savings" that were generated along with nice interest and penalties. Not to mention ruin your relationship with CRA forever.

However i think your particular situation now has to do with the charity attempting to extort further funds out of you. Do you have an initial contract with them? If so that contract will mention your obligation to them. If this money is not mentioned don't pay them,

They wont do anything to your credit
 
#7 ·
However i think your particular situation now has to do with the charity attempting to extort further funds out of you. Do you have an initial contract with them? If so that contract will mention your obligation to them. If this money is not mentioned don't pay them,

They wont do anything to your credit
I do have a contract with them, and unfortunately it doesn't state that the money I paid up front will be used as interest for the initial loan, and enough to purchase medications to repay the loan...however that is something I remember very vividly about the tax shelter program. This was meant to be a one payment type program. The money people paid is supposed to cover everything needed. And now they are coming back for more....even more so after CRA has disallowed the donation and in their view the program is unlawful.

Like I said, unfortunately I haven't found this anywhere in writing what the money I paid will be used for. Very cunning of them I must say.
 
#6 ·
Guban,

To answer your question: you're absolutely right, the money I paid up front was for the interest on a loan that COIP "lent" in the amount of $12,000, to purchase the medicine units. The loan was then sold or transferred to another company which offered a lower interest. I must add that this was all part of the tax shelter program, all the arrangements were made, the paperwork was prepared by COIP, even for the responses to the CRA, including the application for reassessment.

I do have a contract signed, back from 2007 and it does state that at some point I will need to repay the loan, either by making a payment or with medication of equal value (i.e. $12,000).

I do remember from the seminar/presentation (sales pitch) on this tax shelter program, the money I paid up front was supposed to cover the interest, administration costs, as well as the purchase of medication to repay the original loan. This purchase to repay the original loan was supposed to be coordinated and arranged within the program.

5 years has gone by and I thought everything was taken care of and finalized, especially taking into consideration that COIP's charitable organization status was pulled by the CRA, after investigations revealed they were a fraud.

This boondoggle appears to have been an attempt at defrauding people who, like me, wanted to benefit on income taxes as well as help people in need of medication to control their ailments. If COIP orchestrated this scheme and there is no sign of medication being donated to Africa, should people who took part in the tax shelter be responsible to YET again fork over money to, supposedly, "repay" a loan with "medication".

When I called Integrated RM Inc., a company that's handling the unpaid account (from SunRX), they don't know anything about the details of the program (i.e. circumstances around the medication etc...) and recommended I contact COIP directly.

I contacted the financial adviser's office, through which I did this tax shelter, to book an appointment to see him next Monday. The previous meeting he was recommending I pay the outstanding amount to fulfill the obligations of my contract. I plan on taking the article from Toronto Star over with me indicating COIP is a fraud and see what he recommends I do moving forward.

I appreciate your and everyone's input on this! Thanks for your time and thoughts.
 
#8 · (Edited)
well here is how i see it

They have sold your loan, for a discount to this collector, who is now going to attempt to claim it.

Obviously the entire program is a sham, good charities don't operate in the manner, but it wont help your case. The person collecting only know that you owe them money, since you were sold of to them.

Your answer is a simple one, was the obligation to them in the contract fulfilled. Did they deliver the medication, however your understanding of the obligation, and the consideration, and what is actually written in the contract are two very different things

First question i have upfront is why are they only asking for a $1000. Why not $12000. Seems to me if the obligation is fulfilled and if $12000 is the consideration in the contract than they should ask for the full amount. Unless of course a $1000 maybe the type of threshold for people to pay to make this problem go away

Furthermore you also have another point. If the party you signed the contract with, is considered to be willfully negligent in carrying out fraudelant affairs, is the contract legally binding,

But first i want to know why $1000. Why not more
 
#10 ·
SunRx in their letter "Statement of Account Payable" summerizes my account as owing 1,044 Medicine Units - valued at $12,000
Interest Currently Due - $353.39

They offer 2 Options for repay the account:
Option 1: To settle your debt with pharmaceuticals - $756 + $353.39 (interest) = $1,109.39

Option 2: To settle your debt with a CASH payment - $612 + $353.39 = $965.39

The reason it's around $1,000 and not $12,000 is because they claimed they have found suppliers outside of Canada that can sell the same medication (valued at $12,000) for a discounted price. Which is why this tax shelter seemed legitimate and enticing in the first place.

The option to settle the account with a cash payment is slightly lower than settling it with pharmaceuticals, and it seems to me that people, just to make this go away, will opt to pay the lower amount (pay in cash) which in turn is beneficial to the collector. I wonder if people chose option 1 and repaid with pharmaceuticals, if the collection company would actually attempt to purchase the medication. This seems so far fetched and convoluted that I sincerely doubt it.

There is now 4 companies involved in this kerfuffle: COIP (original company), PanAggregate Financial Corp., SunRx, and Integrated RM Inc. that is acting on behalf of SunRx to discuss the overdue account.

I'm surprised there isn't more to be found on the Internet, people in the same situation, because I know there is people out there that must be furious and feel duped.
 
#12 ·
The reason it's around $1,000 and not $12,000 is because they claimed they have found suppliers outside of Canada that can sell the same medication (valued at $12,000) for a discounted price. Which is why this tax shelter seemed legitimate and enticing in the first place.
Would you offer your employer a 90% pay cut because you moved to a cheaper residence? I can't see anyone doing this if they have a real claim. If they're giving up this much as their first move they can give up more and they're just hoping you don't try.

A tax lawyer might help but this seems like a more general issue with the contract. Usually it won't cost you anything to meet with them and review the issue. You could go to a firm and ask them who would be the best lawyer to talk to. If all it takes is them writing a letter for you that won't cost too much either.
 
#11 ·
What type of a lawyer would specialize in this sort of work, a tax lawyer I guess right?

Honestly I've been trying to deal with this without getting a lawyer involved because I know that might be expensive. And even might reach the same amount as they want from me to repay the account. And then what is the benefit of doing that? However that might be my next step if I don't get any advice from the financial adviser that I'm going to see on Monday. Because, unfortunately this will not go away on it's own.
 
#16 ·
Hi Gixxer,

I searched online and found Kevin Donovan who is the investigative reporter at the Star. He wrote several reports about COIP tax shelter scheme during the past several years. I just called him and talked to him about my case. He said several hundred people called him about COIP tax shelter scheme. He asked me to email my material to him. You can get his contact info from any of the articles below. I hope he can help us on this.

http://www.thestar.com/news/investigations/2007/09/29/14b_tax_scams_nail_donors.html
http://www.thestar.com/news/investigations/2010/05/11/charity_closed_after_bad_books_revealed.html
http://www.thestar.com/news/canada/2012/05/14/charity_tax_shelter_promoters_face_criminal_probe.html
 
#13 ·
I feel like your FA should pay this $1000 since he was the one who told you to invest in this fraudulent scheme. I don't know much about the law, but maybe you could get a free consultation with a lawyer before you meet with the FA, so you have some information when you meet with him.
 
#19 ·
hahaha good one! I do feel like he should for getting his "clients" involved in this fraud!
Unfortunately the contract exists to protect his behind, and as sweet sweet as that'd be, I doubt it'd ever happen :)
I will suggest it to him on Monday though.
 
#14 ·
What Spudd said.

What kind of FA sets you up with a tax scam? A stupid one, or a crooked one.

Find out how much of his/her own money the FA put with these jokers. Or how much he/she got in kickbacks for introducing you.

No way will these scammers go away if you give them $1000. You will get on a "biggest suckers EVER" list and Russian mafia and Nigerian Princes will swamp your email account.
 
#36 ·
What Spudd said.

What kind of FA sets you up with a tax scam? A stupid one, or a crooked one.

Find out how much of his/her own money the FA put with these jokers. Or how much he/she got in kickbacks for introducing you.

No way will these scammers go away if you give them $1000. You will get on a "biggest suckers EVER" list and Russian mafia and Nigerian Princes will swamp your email account.
I read the posts shaking my head. Scammers scamming those that scammed the CRA...now their chickens have come home to roost.
I guess the old saying seems to apply each time you deal with phony charities..."if it seems too good to be true...it usually is!"
 
#17 ·
Thanks bwater for the words of recognition. Like I mentioned, I am shocked that more isn't online about people loosing their cool about this SCAM! I don't think I'd ever get involved with another tax shelter. I guess like the adage goes, if it sounds too good to be true, it probably is! I will contact Kevin Donovan and see if I can get some direction from him. I'm sure if we combine our voices, we can accomplish something regarding this sham.

These FA definitely must get some kickbacks from bringing their clients to these seminars, and probably more if they sign on with whatever scheme is going. I posed a question to my adviser one time, and he personally signed on for the tax shelter (for a MUCH larger amount than I did). He showed me a photocopy of his letter from SunRx with how much money they are asking him to pay back and it was over $10,000. The skeptic in me automatically thought that it's a fake letter that the tax shelter organizers issued to him, in anticipation of their clients coming to knock on his doors demanding answers...but obviously I do not have any proof of that, and I'll never know.
 
#20 ·
I am afraid that a regular joe like myself isn't savvy enough to dissect the contract and track down whether COIP actually purchased the medicine units and sent them to sub-Saharan Africa as it claims in the contract. A well orchestrated scheme might have the paperwork drafted to make it seem like this all took place, but whether it actually physically happened is another story. And maybe that's what would make the original contract null and void because of their willful fraudulent activity?
 
#26 ·
If all they're asking for is $1000, why not let them take you to small claims court if they're serious? It'll be a lot of trouble/cost for them to do that, and wouldn't cost you much. You can also get 30 min. free legal advice. (by phoning your gov't toll free number and they'll give you the main number to call.)
All the best with that...sounds like a nasty thorn.
 
#29 ·
Slogged through the canadiancapitalist.com article and comments. Man, I thought this forum was wordy....

It also shows the hazards of letting people use multiple names for the same login... the scammers themselves were commenting, and pretending to be a whole posse of unrelated posters...

I wouldn't give these guys the steam off my p.
 
#30 ·
I was a donor in the program plus 4 additional years beyond. This has become a giant pile to have stepped in! There is only one way to salvage yourself here. You must satisfy the terms of your loans through full recourse compliance. This means that equivilant meds or cash must be repayed to satisfy the loan. The CRA will NOT accept partial payment loans. these companies are offering to return your promisary note in good standing for a small additional payment. This is NOT full recourse! The CRA may even use unpaid loan amounts as taxable income! Most Tax lawyers wont be able to help you here because we have stumbled into the niche area of corporate tax systems where the only way to be represented by someone who knows the game will come at a $250K retainer...too steep for average joe like me.
I recommend that you look into a company called profitable giving Canada. They are mostly former salesmen and participants in the programs who have come together with the help or Dorris Law in Toronto to pursue the legal end of this with the CRA as a group. This will cost you more money, however, they guarantee full recourse payment (meds are actually being purchased, delivered and accepted). The law firm then takes all of your documents and puts a cease and desist order on SUn RX and related collectors. The last piece is to fight the CRA in appeals court. This is totally unpredictable in time frame and cost but for a minimal upfront cost, you get legal representation for 5 years...the downside is that CRA can appeal to eternity until there is no legal fund left.
 
#31 ·
How can we protect ourselves from CRA?

Hi, I am one of those donated to COIP from 2007 to 2009 and currently in appeal with a big amount of money owed to CRA. Should we organize as a group in order to be more successful in defending ourselves? Maybe organize a meeting with a MP or MPP? I don't think we did anything wrong - at the time of our donation COIP and ORION were officially registered charities with CRA. They revoked their status in 2010. So why we should be at fault if CRA respected our tax receipts and paid the refund at the time when those organizations were registered?
Any thoughts?
 
#35 ·
weasel words

Hi, I am one of those donated to COIP from 2007 to 2009 and currently in appeal with a big amount of money owed to CRA. Should we organize as a group in order to be more successful in defending ourselves? Maybe organize a meeting with a MP or MPP? I don't think we did anything wrong - at the time of our donation COIP and ORION were officially registered charities with CRA. They revoked their status in 2010. So why we should be at fault if CRA respected our tax receipts and paid the refund at the time when those organizations were registered?
Any thoughts?
I am in the same boat as you. I participated in 2007 and 2008. I also owe CRA quite a bit. The person who introduced me to COIP has disappeared and I'm left all alone and have no clue what to do than than wait. The last time i spoke to someone in Calgary (Fastrack) was in Oct 2016. They told me to stay clear of Justice Trading and its affiliates. They use a lot of scare tactics so you spend more $$$. when I started doing my research, i realized that 2 guys from COIP office are affiliated with them..surprise surprise. So basically right now I am waiting for some kind of settlement offer from CRA. Reading for other tax shelters the settlements that people were accepting were no penalties, no interest and CRA was accepting their actually cash donated.
I am hoping we get the opportunity to get the same or similar settlement.
I do however believe that COIP was legit in the years I donated. At the time of donation, I did however call CRA to see if it was legit before i invested. They had no warning.. All this makes no sense to me! Totally upsetting.
 
#32 · (Edited)
Sorry to be so harsh but CRA did not fail to 'respect' your tax receipts. You self reported. The charity was an obvious scam and their charitable lic. was revoked...as it should have been. Anyone can set up a charity and get a tax number and become a registered charity. It is only after operation and inspection of their books that CRA would find that they were a scam.

Think about this for a moment. Would a reasonable person believe that they could pay $2400 and obtain a legitimate charitable tax receipt for 10 or 12K, or more that would yield 5 or 6K in tax savings assuming they were inside the top bracket? Makes no sense whatsoever.

I had this exact discussion with a colleague who tried to tell me what a great deal it was. It sounded to good to be true because it was too good to be true. He ended up with the same problem as you only he did it for two years. He was re-assessed and lost his original so called charitable donations.

My guess is that the company that sold you this is long gone, defunct. If your financial advisor was recommending this product at the time, and you still have the same financial advisor, I would highly recommend that you find yourself a new advisor. That one clearly puts his commission ahead of your financial well being.

Google COIP tax scam and you will see the Toronto Star Reports.
 
#33 ·
Do we need to Repay the loans?

I was unfortunately one of the suckers that got conned into participating in COIP. Lessoned learned and I have repaid my amounts owing to the CRA.

My question is if we actually need to repay the bogus loans attached to these schemes and react to the threats of SUN RX and IRM collections? I know people representing and receiving commissions from Justice Pharma and Profitable Giving Canada are scaring people into believing that there is in fact a real threat of recourse, but I have not been able to find another independent view on this. All the law firms that I have asked do not have experience with these types of schemes and therefore do not have any real advice.

Some reasons I am struggling with believing I actually have to repay the loans:

1) I do not believe the CRA will ever change their stance and our donations will always be rejected. Therefore I am not worried about fulfilling my loans to appease the CRA. The CRA could care less if I have that loan is ever settled.
2) A board member on Justice Pharma has be fined in Ontario for working with scam artists and in banned from giving financial advice in Ontario. Hard to trust someone like that. ww.advisor.ca/news/industry-news/ontario-man-fined-for-helping-scam-investors-89514
3) The collections agencies that have approached me give me phone numbers for lines that do not get answered and websites that no longer work. When I researched the phone numbers attached to IRM collections in leads me to Speedy Collections Agency out of Scarborough Ontario and that company is out of business
4) Shy Kurtz is being presented as a Lawyer that worked to create the COIP structure and also now as one of the people promoting Justice Pharma and way to settle the loans and become compliant. However after looking on this website ww.canadianlawlist.com I cannot find any proof that he is actually a practicing lawyer?
5) COIP/MLF/PGI can no longer be contacted. Their websites no longer work, their phone lines are deactivated and no one can be reached.

DOES ANYONE HAVE ANHYONE ELSE HAVE ADVICE ON THIS?
 
#34 · (Edited)
Brudneski, Your rationale makes sense to me.
I'm afraid I can't offer a 'knowledgeable' reply, but I have spent a few hours reading this thread, the Star articles, related websites like JusticePharma.org, and looking up SunRx, Integrated RM, kara lee burke, shy kurtz, etc.
These requests look like further scammers at work, purporting to legitimize your CRA claim if you pay up. Not going to happen.

I can tell you that if it were my money, I would definitely comply with the CRA (as it sounds like you have), and I would definitely ignore all requests for more money from any purported collection agency, regardless of their threats, letters, or phone calls. That means I would not answer or return calls or messages. I would document them, keep anything they send, note call times and keep any messages they leave, but have no communication with them.

It is too bad that some of the earlier posters (Gixxer and Bwater) never posted followup comments on this thread. I'm sure they have better insight.
 
#38 ·
Ignoring the fact the loans are bogus and the tax scheme was a fraud, the debt is beyond the 2 year period to obtain a judgement from the courts and beyond the 6 year reporting period for credit reports.

I would tell the collection agencies to just go ahead and sue me.

The CRA can collect because they have special legislated powers of collection with no time limits when they consider it tax evasion.
 
#39 ·
I participated in COIP program 2007, 2008, 2009. Received today a long letter from Chief of Appeals at the CRA (Letter dated January 26, 2017).
In a nutshell CRA is offering interest relief if I 'waive any right of objection'. I had filed Notice(s) of Objection for participation in the program.
Will be attempting to track down some of the folks involved with the original COIP program tomorrow and determine recommendation.
Came across this on the web: RPGC[dot]ca[backslash]The_Whole_Story[dot]php
It is a good read on the topic...though not specific to the letter I just received.
 
#40 ·
Thank you dollars. I got the same thing. I am not signing anything. The person who sold me this program is with PGC and Justice trading and is telling me to buy the drugs to reimburse my loan BUT nothing is guaranteed.I personally don't see throwing more money will help with CRA! I contacted a tax lawyer and waiting for him to get back to me. I would like to get a bunch of people to reduce our legals fees as I do not think we can do this alone. you can email me at 4friends1972 at libero.it
 
#41 ·
Thank you AMA. I have had no success contacting anyone COIP related. I will follow you lead and not sign anything from the CRA. Would be interesting to hear if anyone else has received this latest CRA letter...and if any COIP participants are currently in contact with the sales team from COIP for recommendations?
 
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