What's New from the Charities Directorate of CRA
September 12, 2014
Did Mr. Imoh give charitable donations of 45,000, in cash, to Revival Time Ministries International over 3 year? Did Mr. Bello give $15,000 to the same charity? This is the crux of the case. You can read about Revival Time Ministries International's revocation by CRA here. (As an aside and outside the scope of charity law you can read about allegations of sexual assault here.) Far from having poor records or no records the charity produced some Canadian bank statements which the charity seemed to prepare for itself. I did not that you can prepare your own bank statements but I learn a new thing everyday! This case really enhanced my understanding of charity law in Canada!
September 06, 2014
We recently reviewed the T3010 information for 2012. The database was prepared by the Charities Directorate of CRA in June 2014 and covers about 85,477 charities which is almost all of the 2012 T3010 returns. Canadian registered charities were required to disclose on the 2012 T3010 “Did the Charity Carry on Political Activities During the Fiscal Year?” (line 2400) and “Enter the Total Amount spent by the Charity on these activities” (line 5000)
September 01, 2014
Following up on the 2014 Budget Finance has released draft tax legislation for consultation. The changes with respect to bequests to registered charities are from Budget 2014 will allow some greater flexibility for claiming the charitable donations against either the estate or a trust. This bequest proposal has generally been welcomed. It will deal with some situations were there is a mismatch between the income a deceased person or their estate has and the amount gift left to charity.
August 28, 2014
The CRA yesterday released its guidance on ineligible individuals (CG-024). The new rules were announced in the 2011 Federal Budget and it is good to see CRA finally providing its guidance on ineligible individuals.
August 28, 2014
Andrew Coyne recently wrote an opinion piece in the National Post in which he supports the idea of eliminating the tax credit for donations to registered charities. The article is entitled "Problem with charities isn’t their politics, it’s their generous tax credit". Mr. Coyne is by no means the first person to call for such action. It is difficult to know whether this is just another opinion piece or if there will be traction with his line of argument.
August 26, 2014
In this article entitled "Partial Glimpse at 2013 T3010 Filings Dealing with Political Activities by Canadian Registered Charities" I discuss the 51,000 Canadian registered charities have had their T3010 for 2013 added to the CRA database so far. This 51,000 represents about 60% of registered Canadian charities. In a partial glimpse of the 2013 T3010 information about 333 of 51,000 charities reported so far carrying on any political activities during their 2013 fiscal year, whether by volunteer, staff or spending. A similar number also said they spent money on political activities.
August 23, 2014
On a number of occasions we have assembled a list of Canadian charities that had lost their registrations for cause. We have now updated the list to August 2014. This list contains over 5 years information on charities deregistered as a result of audit, which used to be referred to as “for cause”. This list does not include registered charities who were revoked for “failure to file” their annual return or asked for voluntary revocation or those that were revoked for the sole reason that they were corporately dissolved.
August 18, 2014
As I have noted before I am concerned that many thousands of Federal non-profit corporations have not continued to the new CNCA and at some point after October 17, 2014 they will be dissolved by Industry Canada. That is a particular problem for registered charities in that CRA will eventually revoke the registered charities status of those charities.
August 07, 2014
Over the last 20 years CRA has revoked a number of charities for ostensibly being involved in partisan political activities, or exceeding the 10% of resources on political activities, or for having an unstated political purpose. In light of all the interest in charities and political activities we thought that it would be a good idea to provide a list of CRA letters that I am aware of relating to those revocations. For those who are interested in the issue of charities and political activities these are important documents.
August 06, 2014
CRA has released a letter which discusses whether GST/HST applies to membership dues. This particular letter involved a non-profit corporation seeking a GST/HST exemption for dues paid by its members. Based on the information provided by the non-profit corporation, CRA concluded that members were receiving a direct benefit as a result of their membership and therefore did not meet the GST/HST exemption criteria set out in section 17 of Part VI of Schedule V.
July 26, 2014
In the last week there has been a large number of articles in the Canadian media on Canadian charities and political activities. I would make a few preliminary points that sometimes get lost in the coverage.
July 25, 2014
In the 2012 Federal Budget the Conservative government announced that it was allocating $8 million for various initiatives related to charities and political activities. More recently papers have been describing a $13 million budget. I wondered about the difference and wrote to CRA to request a clarification. Here is what I heard back from 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:
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