The CRA revoked the registered status of the Canadian Lacrosse Association “For issuing more than $60.7 million in donation receipts for abusive transactions arising from its role as a participant in tax shelter arrangements that, in the opinion of the Minister, do not qualify as gifts…”
The CRA revokes the registered status of the Canadian Lacrosse Association
Ottawa, Ontario, June 7, 2010… The Canada Revenue Agency (CRA) has revoked the status of the Canadian Lacrosse Association as a registered Canadian amateur athletic association (RCAAA), effective June 5, 2010. The following notice of revocation was published in the Canada Gazette:
For issuing more than $60.7 million in donation receipts for abusive transactions arising from its role as a participant in tax shelter arrangements that, in the opinion of the Minister, do not qualify as gifts, notice is hereby given, pursuant to paragraph 168(1)(d) of the Income Tax Act, that I propose to revoke the registration of the organization listed below. In accordance with subsection 168(2) of the Income Tax Act, the revocation of registration is effective on the date of publication of this notice.
RCAAAs are organizations established for the primary purpose and primary function of promoting amateur athletics in Canada on a nationwide basis. These organizations are registered under the Income Tax Act and have the authority to issue official donation receipts for income tax purposes.
An RCAAA that has had its registered status revoked can no longer issue donation receipts for income tax purposes and is no longer a qualified donee under the Income Tax Act.
RCAAAs and 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 an RCAAA is found not to comply with its legal obligations, the CRA may revoke its registered status under the Income Tax Act.
The CRA is reviewing all tax shelter-related donation arrangements (for example, schemes that typically promise donors tax receipts worth more than the actual amount of the donation), and it plans to audit every participating charity, promoter, and investor. For more information about tax shelters, go to the CRA’s Tax alert Web page at http://www.cra.gc.ca/alert.
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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.