CRA recently updated several of its webpages relating to charitable donations.
CRA recently updated several of its webpages relating to charitable donations.
CRA recently released a letter which discusses whether a school chaplain employed by a Catholic school board can claim the clergy residence deduction as per section 8(1)(c) of the Income Tax Act (Canada). CRA had the following comments:
I am looking forward to attending and speaking at the CPA Canada Not-for-Profit Financial Executive Forum which is being held on March 1-2, 2016 at the Metro Toronto Convention Centre in Toronto.
There was recent case of R. v. Raza, 2015 BCSC 2512 (CanLII). The three accused were tax prepares who were charged with fraud for allegedly being involved with the issuance of false donation receipts.
The Canadian Charity Law Association is delivering some upcoming webinars. Registration is free but space is limited.
Here is an article "Sunny days for charities and political activities? But lack of transparency results in some clouds" which discusses a recent press release from the Minister of National Revenue dealing with the charity political audit program.
Here is an article "Canadian Charities Helping Syrian Refugees". It may be helpful for some charities that wish to get involved in the Syria Crisis.
The Department of Finance has requested pre-budget submission. Here is the Blumbergs' Pre-Budget Submission to the Standing Committee on Finance and the Minister of Finance for the 2016 Federal budget.
Many Canadian charities and donors wish to assist Syrian refugees and those affected by the conflict. CRA has just released guidance to assist donors and charities understand their legal obligations.
Corporations Canada recently released a notice on the public disclosure requirements relating to the corporate information that they collect as part of the services they provide for corporations.
In the recent case of Canada v. Scheuer, 2016 FCA 7 the Federal Court of Appeal sided with CRA. A number of people who had invested in abusive tax shelter arrangements sued CRA because CRA had issued a tax shelter number. The FCA concluded that CRA had no alternative but to issue the tax shelter number and such number does not mean that the tax shelter works. CRA does not have a duty to warn "investors" that a scheme like GLGI is suspect. Although I might add that CRA does warn people not to invest in these schemes. Also the FCA suggested "the plaintiffs acknowledge that they received independent legal opinions, opinions from accountants and valuation appraisals in respect of the tax shelter. The issuers of such opinions, who benefited financially from the provision of their professional advice, are better placed to indemnify the plaintiffs in the event of negligence in the exercise of their professional responsibilities." In other words the FCA is encouraging those who invested in these schemes to sue the lawyers, accountants and valuators who provided opinions and appraisals if they were negligent.
The CRA will be introducing a new reporting requirement for registered charities. It is a short question relating to partnership holdings. A charity should print the page and submit it with the T3010 filing. Next year (2016 fiscal year) the question will be on the T3010 and not dealt with seperately. Seems a bit cumbersome that all charities must do this for the 2015 fiscal year when there are probably only a very small number who have partnership holdings. The questions is "Did the charity have direct partnership holdings at any time during the fiscal period? Yes No
Diane Lebouthillier, the new Minister of National Revenue has announced that the 2012 Conservative government initiative to audit more registered charities on the issue of political activities will be wound down. There is a lot in the release and I will be writing more about it shortly.
The Department of Finance has released Legislative Proposals Relating to Income Taxation of Certain Trusts and Estates. There are a number of amendments to the Income Tax Act. The Conservative government had previously provided greater flexibility with bequest donations so that the donation could be made by the individual or the estate. However, there was a deadline of 36 months from the date of death. It has now been extended to 60 months or 5 years.
I will be presenting a webinar for Charity Village on January 28, 2016 on Top 20 Compliance Issues for Canadian Charities.
In a terrible incident 6 Canadian volunteers working with a Quebec based charity were killed in a terrorist attack in Burkina Faso. The Canadian volunteers were there to build a school. Apparently at least 28 people from 18 different countries were killed in the terrorist attack. According to CBC, 4 of the volunteers were from the same family and the charity that they were volunteering with is Congrégation des sœurs de Notre-Dame du Perpétuel Secours.
On Tuesday, April 19, 2016 I will be chairing an OBA program entitled "The Forfeited Property of Dissolved Not-for-Profit Corporations: New Developments in the Law". There will be 3 speakers from the Ontario government discussing upcoming changes.
Here is a brief article on "Which Canadian charities spent the most outside of Canada in 2013?"
Here is a note on "Which are the largest Canadian registered charities by assets - 2013"
At the 2015 APFF conference roundtable, CRA responded to several questions regarding the charitable registration process:
I recently contacted Industry Canada and they advised that as at December 18, 2015 there were 19,997 not-for-profit corporations under Canada Not-for-profit Corporations Act (“CNCA”) . The figure includes new incorporations, continuances from the CCA and continuances from other acts/jurisdictions. The number of continuance have slowed down with less than 50 per month being submitted to Industry Canada. The number of continuances to the CNCA was 12,525 as at December 5, 2015. There are also 3,163 not-for-profit corporations still under the Canada Corporations Act (“CCA”)
The Charity Commission of England and Wales just released a report entitled Campaigning and political issues arising in the run-up to the 2015 General Election. When they put it out they probably did not think that it is such a special report. It explained that in the 2015 UK election there were complaints about UK charities, the Charity Commission investigated and what the result was. Nothing that exciting, except in Canada if the CRA was to prepare a similar report and provide it to either MPs or the public then people at CRA would go to jail.
Here is part of a press release from the Charity Commission of England and Wales concerning "dominant individuals".
The Honourable Justice F.J. Pizzitelli of the Tax Court of Canada dealt with a motion in V. Ross Morrison v. The Queen. The court dismissed the motion with costs. The cases deals with the Canadian Humanitarian Trust (“CHT”) and Canadian Gift Initiative (“CGI”) which CRA would describe as abusive charity gifting tax schemes. Mr. Morrison had wanted that the CRA to "disclose or produce for inspection the names and municipal and/or email addresses of all persons who have filed Objections to the Reassessments in the CHT and CGI Donation Programs and whose Objections have not been resolved (the “Outstanding Objectors”);" The court noted "I do not agree with any of the Appellant’s arguments. The Appellant has neither provided nor argued any legal precedent that supports his position on any of these issues. There is ample precedent against."
I had the pleasure of being on The Exchange on CBC on December 11, 2015 to discuss the Chan Zuckerberg Initiative ("CZI") with Bruce MacDonald, CEO of Imagine Canada. You can watch the segment of The Agenda here (at approximately 18:35).
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.