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The CRA just put out a press release entitled “The Canada Revenue Agency revokes the charitable status of the Canadian Foundation for Tamil Refugee Rehabilitation”.
The Canada Revenue Agency revokes the charitable status of the Canadian Foundation for Tamil Refugee Rehabilitation
Ottawa, Ontario, December 9, 2011… The Canada Revenue Agency (CRA) will revoke the charitable registration of the Canadian Foundation for Tamil Refugee Rehabilitation (the Foundation), a Toronto-area charity. The notice of revocation will be published in the Canada Gazette with an effective date of December 10, 2011.
On November 7, 2011, the CRA issued a notice of intention to revoke the charitable registration of the Canadian Foundation for Tamil Refugee Rehabilitation, in accordance with subsection 168(1) of the Income Tax Act (the Act). The letter stated, in part, that :
On the basis of the Canada Revenue Agency (CRA) audit, we have concluded that the Foundation has ceased to comply with the requirements of the Act for its continued registration in that it: failed to maintain adequate books and records; improperly issued tax receipts on behalf of a third party; failed to maintain adequate direction and control over the use of its funds; and provided funding to non-qualified donees outside Canada.
This funding included $722,390 provided to organizations which, on the basis of publicly available information detailed in our letter of November 19, 2009, the CRA believes operate as part of the support network for the Liberation Tigers of Tamil Eelam (the LTTE), a listed entity under the United Nations Suppression of Terrorism Regulations and the Criminal Code of Canada.
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 status 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 in Canada perform valuable work in our communities, and Canadians support this work in many ways. The CRA regulates registered charities through the Income Tax Act and is committed to ensuring that charities operate in compliance with the law. Where a registered charity is found not to comply with its legal requirements, the CRA may apply monetary penalties or may suspend or revoke the charity’s status under the Income Tax Act.
The Government of Canada has made it very clear that it will not tolerate the abuse of the registration system for charities to provide any means of support to terrorism, and that the tax advantages of charitable registration should not be extended to an organization where its resources may, directly or indirectly, provide any means of support for, or benefit to, an organization listed under the United Nations Suppression of Terrorism Regulations or the Criminal Code of Canada, or to any other body engaged in terrorism. For more information, see the Checklist for Charities on Avoiding Terrorist Abuse at http://www.cra.gc.ca/checklists.
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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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.