Missed points & confusion - this is what I'm talking about...
The CRA "won" the case as they said the receipt you get is price you pay. Because Klotz paid $100 for the art & got a receipt for $1000, the CRA feels they won & the tax payer lost. Because the taxpayer did something ridiculous, in my opinion, I feel they got exactly what they were supposed to get. The CRA isn't "winning". This is just the law.
In the new tax shelters discussed originally in this thread, you pay $100 and get a receipt for $100. That's why the same logic, CRA threats, & mis-statements by people not understanding this do not hold the same water.
The "rub" is in the fact that you are using credit to donate the $100, and your out-of-pocket expense (ie - interest expense) may only be $10. That doesn't mean that you only "paid" $10 & therefore should only get a receipt for $10. See the difference? A person still has a debt to pay back, albeit it's down the road & they can enjoy an initial cash surplus today. (ie - $46 tax credit on the $100 in Ontario)
The CRA cannot seize assets once a formal objection (NOO) has been filed and that scary interest they "charge" you is only applicable if they are right about the fact that you owe the tax. How can they seize assets if they are not proven right in court? I think you are referring to the fact that if you do NOT file an appeal when the CRA challenges your tax return, then YES, they can go after your assets. But that's like disagreeing with a speeding ticket, not appealing it, and then acting surprised when your car is impounded. You have to speak up if you feel something is wrong.
Would you feel confident that (given my example above) if the CRA said you were only entitled to a $10 receipt for your $100 donation that you made on your Visa because it only "cost you" $10, that they would win in court? Would you be worried about the interest they are "charging" you throughout your appeal?
If you do not have to pay for any of the appeals (any tax shelter company today pays all the bills) and you know the law is on your side (clearly, given the example above) I think we would all admit that the CRA is traveling down a very slippery slope that ends up costing tax payers a lot of money and abusing their powers. In the end, the law will prevail 90% of the time.