Judge rules against scholarship tax scheme

Students received scholarships after parents made donations to Christian schools

The Federal Court of Appeal has upheld a ruling by the Tax Court, putting a stop to the practice of parents making donations to Trinity Western University, and other Christian schools, apparently in exchange for scholarships.

According to the National Post, a donation would be made to the universities through the National Foundation for Christian Leadership (NFCL). Donors would then receive, in some cases, an equal amount in scholarship money for a family member. A charitable donations receipt would also be issued that would see as much as 45 per cent returned in the form of tax credits. “What is disturbing is that the objective evidence points so very clearly to an understanding, indeed a knowledge, at the time of donation, that 80% to 100% of monies they donated would go to cover the education cost of those students who solicited the funds — primarily their offspring,” a Tax Court judge wrote in the original ruling.

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In its own ruling earlier this month, the appeals court upheld those conclusions, effectively reversing tax credits claimed by six families who had received funding for family members to attend Trinity Western in 2002 and 2003.

Jonathan S. Raymond, president of Trinity Western, told the Post that he was unaware of many of the details of the case. “This whole matter pre-dates my time here at TWU and I don’t fully understand the issue, so I am not inclined to speak on the matter about which I know so little,” he said.