What's New from the Charities Directorate of CRA
July 13, 2014
Finally. It took more than 3 years but CRA has identified that it has revoked a charity for in part having "ineligible individuals" controlling the organization. I was sure that I was going to die of old age before that ever happened! Amongst a number of grounds CRA notes "The audit also revealed that the board of directors of the Organization includes “ineligible individuals” as defined in the Act. In particular, two directors of the Organization were directors of The Heaven’s Gate Healing Ministry at a time when it engaged in conduct which constituted a serious breach of the requirements for registration under the Act, for which its registration was revoked in 2009."
July 11, 2014
In May, Cathy Hawara, the Director General of the Charities Directorate delivered a speech which touches on a number of important issues such as the constitutional framework for charities, political activities by registered charities, independence of the regulator, compliance approach and IT modernization. It is well worth reading.
June 27, 2014
CRA recently released a letter which discusses whether an employee will realize a taxable benefit if the employee opts to forego a non-cash gift valued over $500 that he or she is otherwise entitled to and directs the employer to make a cash gift of a specified amount to a specified registered charity.
June 27, 2014
CRA recently released a letter which discusses whether the transfer of the custody of a fossil to a qualified donee can be considered a charitable gift. CRA concluded that this would be a question of both fact and law but there would need to be a transfer of property present.
June 27, 2014
CRA recently released a letter which discusses whether the donation of a conservation easement by a landowner would be considered a gift for tax purposes.
CRA provided general comments on ecological gifts.
June 26, 2014
I never thought I would live to see the day. Yes a popular magazine has a story that revolves around the T2050 - Application to Register a Charity Under the Income Tax Act. Now Magazine has an article entitled "Men’s rights group used feminists’ names on charity application" in which it alleges that a registered charity may have put in a deceptive charity application to the Charities Directorate.
June 05, 2014
In Narul Hassan vs. The Queen it is another false receipting case. "It appears almost certain that this program involved a fraud on the Canadian tax system, and therefore on the Canadian public. It is not clear to me whether Mr. Hassan was complicit or merely duped."
June 04, 2014
CRA has appealed the decision of David, R. et al. v. The Queen (TCC) to the Federal Court of Appeal. This case involved six separate appeals with respect to the disallowance of a tax credit by CRA for a purported charitable gift to CanAfrica International Foundation. The judge waived penalties and allowed the cash contribution of the individuals.
May 27, 2014
CRA recently released a letter which discusses whether cash prizes awarded to Olympic athletes should be taxed. CRA stated that a cash prize does not qualify as a prescribed prize and provided the following comments:
May 16, 2014
The Kathryn Kossow v. Her Majesty The Queen application for leave to appeal was dismissed with costs by the Supreme Court of Canada (SCC) on May 15, 2014. The Federal Court of Appeal released its adverse decision against the taxpayers in December 2013. The taxpayers filed Leave to Appeal against this decision at the Supreme Court of Canada on March 7, 2014. Leave to Appeal was dismissed with costs on May 15, 2014. Marechaux and Kossow are the two big decisions that the SCC has denied leave to appeal dealing with abusive charity gifting tax schemes.
May 05, 2014
Here is a note from the New Zealand Charities Services, which is a branch of the Department of Internal Affairs. It describes an interesting meeting held in Australia between different charity regulators including the Charities Directorate.
May 03, 2014
I recently requested numbers from CRA on abusive charity gifting tax schemes. The number are trending down. 2006 was the highest at $1.3 billion. 2011 was $299 million. 2012 was $273,000. 2013 preliminary numbers are $100,000 but as we know there are more returns to be filed. Crossing my fingers that the 100 million does not increase too much.
May 02, 2014
The decision of David, R. et al. v. The Queen (TCC) discusses six separate appeals which concern the disallowance of a tax credit for a purported charitable gift to CanAfrica International Foundation (“CanAfrica”). CanAfrica issued to each of the appellants (or a spouse) a donation tax receipt which formed the basis for tax credits claimed in the appellants’ income tax returns. In reassessments issued by CRA for the 2006 taxation year, the credits were disallowed in their entirety. We have covered CanAfrica before (here, here, and here) The surprising part of this case was that the judge waived penalties and allowed the cash contribution (the 10%) of the individuals.
May 01, 2014
The T3010 now asks additional questions about political activities. So far the CRA 2013 database has about 36,000 charities on it. There are in total approximately 86,000 Canadian registered charities who will file their T3010s. Therefore, less than half of the 2013 T3010 forms have been filed and inputted into the CRA database so far. By January or February of 2015 we should expect an almost complete data set. We have exported the information from the 2013 T3010 database in Schedule 7 dealing with description of political activities from the registered charities that have made filings.
April 30, 2014
Here are some documents from the Federal Court of Appeal file dealing with IRFAN- Canada. These documents were filed prior to IRFAN-Canada being placed on the Canadian government's list of "listed entities".
April 29, 2014
The Globe and Mail this morning had an article on the International Relief Fund for the Afflicted and Needy – Canada which is also known as IRFAN – Canada. CRA had revoked the charitable status of IRFAN - Canada. IRFAN - Canada is appealing that decision to the Federal Court of Appeal. Today the Canadian government in the Canada Gazette added IRFAN - Canada as a "listed entity". We have posted material on IRFAN - Canada before including the letters to IRFAN - Canada from the CRA with respect to the CRA's concerns. It will be interesting to see how this story develops and the status of the appeal.
April 27, 2014
We recently reviewed the T3010 Registered Charity Information Return database for 2012 as part of the Sean Blumberg Transparency Project. We have taken a subset of the 2012 T3010 data to look at only registered charities based in Alberta. The data set was updated to January 2014. Alberta has a very important charitable sector and this will shed a small amount of light on some of the numbers.
April 26, 2014
The CRA has updated its "media kit" and specifically the facts and figures section.
April 26, 2014
The CRA has prepared a new video series entitled "Charities and their participation in political activities". It has 3 videos which are each about 3 minutes long. There has been a great deal of interest in political activities and charities over the last couple of years. I would recommend that charities listen to these CRA videos. I will also point out that I recently did a 25 minute video on political activities for the Maytree Foundation that some may also find useful.
April 21, 2014
I will be presenting at the Ontario Hospital Association's conference "Strengthening Foundation Governance: Current Issues, Challenges and Solutions" on May 30, 2014 in Toronto.
April 18, 2014
For a number of years we have been providing the public with copies of CRA revocation letters. These letters set out the CRA reasons for revocation of charitable status when CRA is alleging cause. This the second part of the series.
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