CRA revokes the registration of Universal Community Help as a registered charity

November 09, 2012 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: News, What's New from the Charities Directorate of CRA

The CRA revoked the Universal Community Help as the “audit has revealed that 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 adequate books and records…did not maintain duplicate copies of all the donation receipts it issued and we were unable to quantify the amount of the receipts issued. An analysis of bank deposits indicated that the Organization had $448,023 more revenues reported than total bank deposits for the fiscal periods March 31, 2009 and March 31, 2010. Also CRA obtained donation receipts from sources totaling $347,435 that were not included in the books and records of the Organization for the fiscal periods from 2007 to 2010.”

Here is the CRA press release:

http://www.cra-arc.gc.ca/nwsrm/rlss/2012/m11/nr121109b-eng.html

“The Canada Revenue Agency revokes the registration of Universal Community Help as a charity Ottawa, Ontario, November 9, 2012. . . The Canada Revenue Agency (CRA) will revoke the charitable registration of Universal Community Help, a Toronto-based charity. The notice of revocation has been published in the Canada Gazette with an effective date of November 10, 2012.

On September 24, 2012, the CRA issued a notice of intention to revoke the charitable registration of Universal Community Help, in accordance with subsection 168(1) of the Income Tax Act. The letter stated, in part, that:

The Canada Revenue Agency’s (CRA) audit has revealed that 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 adequate books and records…did not maintain duplicate copies of all the donation receipts it issued and we were
unable to quantify the amount of the receipts issued. An analysis of bank deposits indicated that the Organization had $448,023 more revenues reported than total bank deposits for the fiscal periods March 31, 2009 and March 31, 2010. Also CRA obtained donation receipts from sources totaling $347,435 that were not included in the books and records of the Organization for the fiscal periods from 2007 to 2010.

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.

A charity that has had its charitable 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 of them is a ground 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 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.”

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Charity Lawyer Mark Blumberg

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.

mark@blumbergs.ca
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