The Canada Revenue Agency revokes the registration of The Canadian Quadraplegic Association as a charity
Here is the press release:
“The Canada Revenue Agency revokes the registration of The Canadian Quadraplegic Association as a charity
Ottawa, Ontario, September 14, 2012. . . The Canada Revenue Agency (CRA) will revoke the charitable registration of a Toronto-based charity registered under the name “The Canadian Quadraplegic Association.” The notice of revocation will be published in the Canada Gazette with an effective date of September 15, 2012.
On August 2, 2012, and in accordance with subsection 168(1) of the Income Tax Act, the CRA issued a notice of intention to revoke the charitable registration of The Canadian Quadraplegic Association. The letter stated, in part, that:
The Canada Revenue Agency’s (CRA) audit has revealed that The Canadian Quadraplegic Association (the Organization) is not complying with the requirements set out in the Income Tax Act. In particular, it was found that the Organization failed to maintain any books and records to support its reported revenue and expenditures, as well as to support its charitable activities. Additionally, the Organization did not maintain any duplicate copies of the donation receipts it issued; consequently, we were unable to quantify the amount of the receipts issued. Although the Organization did not maintain duplicate copies of the donation receipts, the CRA found donation receipts totaling $419,736 from this Organization claimed in taxpayers’ personal income tax returns. For all of these reasons, and for each reason alone, it is the position of the CRA that the Organization no longer meets the requirements necessary for charitable registration and should be revoked in the manner described in subsection 168(1) of the Act.
A copy of the notice of intention to revoke and other letters relating to the grounds for revocation are available to the public on request, in the language they were originally written, by calling 1-800-267-2384.
An organization that has had its registration revoked can no longer issue donation receipts for income tax purposes and is no longer a qualified donee under the Income Tax Act. The organization is no longer exempt from income tax, unless it qualifies as a non-profit organization, and it may be subject to a tax equal to the full value of its remaining assets.
Registered charities receive generous tax incentives under the Income Tax Act including the ability to issue official donation receipts. To maintain this privilege, registered charities must keep adequate books and records, to allow the CRA to verify donations made to the charity, and to ensure the proper use of charitable resources. Failing to maintain adequate books and records, and improperly issuing donation receipts are serious breaches of the Income Tax Act, and each is grounds for the revocation of charitable registration.
Registered charities perform valuable work in our communities, and Canadians support this work in many ways. The CRA regulates these registered organizations through the Income Tax Act and is committed to ensuring that they operate in compliance with the law. When a registered charity is found not to comply with its legal obligations, the CRA may revoke its registration under the Income Tax Act.
For more information about the registration of Canadian charities, go to the CRA’s Charities and Giving Web page at http://www.cra.gc.ca/charities.”
Here are copies of recent CRA letters to The Canadian Quadraplegic Association
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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.