CRA cracks down on private foundations

publication date: Jul 23, 2012
Penalties imposed on two private foundations demonstrate a new effort by the Canada Revenue Agency to scrutinize private foundations, reports The Globe and Mail

Most recent is a charge against The Riddell Family Charitable Foundation, administered by Calgary billionaire Clayton Riddell, for breaking regulations concerning the amount of stock that foundations can hold in a single company.  A few months ago, the agency also imposed a $174,000 penalty on a private foundation run by the Reimer family in Winnipeg.

The CRA "is going to be paying closer attention to private foundations on many different levels because there [are] more of them, the amounts involved are greater and there is, to some degree, a certain amount of suspicion," said Mark Blumberg, a Toronto lawyer who advises charities.

Private foundations are typically set up and run by families, unlike public foundations which are controlled by unrelated people. Since 2000, the number of private foundations has grown by 38%; faster than any other type of charity.

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