Canadian Charity Law
September 2010
Here are some of the upcoming charity law seminars I will be presenting across Canada through the Charity Law Information Program. The seminar will cover top legal issues, fundraising regulation and appropriate/innappropriate receipting practices. A full day session is only $40 - great value for charities, their staff and members of the board of director who want to understand compliance obligations.
Posted by
.(JavaScript must be enabled to view this email address) on 09/08/2010 |
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Canadian Charity Law
Here is the Canadian Bar Association (CBA) Submission on Bill C-470, Income Tax Act amendments (revocation of registration). Here is also the submission in French on C-470
Here is my “Blumbergs Canadian Charity Law List - September 2010”. You can add yourself to our newsletter at: http://www.globalphilanthropy.ca/index.php/pages/subscribe/
Posted by
.(JavaScript must be enabled to view this email address) on 09/07/2010 |
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What's New from the Charities Directorate of CRA |
Canadian Charity Law
Here is a CRA letter covering whether a charity that sets up a separate non-profit to sell in kind gifts at cost that the charity received and receipted would be considered to be organized and operated as a 149(1)(l) entityCRA_letter_on_charity_with_separate_non-profit_selling_in_kind_gifts_at_cost.pdf
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.(JavaScript must be enabled to view this email address) on 09/02/2010 |
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There was an article this week by Janet Gadeski, Editor of Canadian Fundraising & Philanthropy talking about GlobalPhilanthropy.ca (TM), its roots and mission. http://www.canadianfundraiser.com/newsletter/article.asp?ArticleID=3409&ClientID=1
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.(JavaScript must be enabled to view this email address) on 09/01/2010 |
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Canadian Charity Law
Here is information on some upcoming presentations I am doing with the Certified Management Accountants of Ontario on Top Compliance Issues for Canadian Registered Charities and their Directors in the GTA including Toronto, Mississauga, Markmam, in the Kitchener-Waterloo area, in London, and in Ottawa.
August 2010
It is good to see that in 2009 the problem of abusive charity gifting tax shelters has been further reduced. Here are the statistics from CRA:
Posted by
.(JavaScript must be enabled to view this email address) on 08/29/2010 |
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One of the categories of qualified donees under proposed legislation is municipal or public bodies performing a function of government in Canada. Here is a CRA letter on whether an Indian band is a public body performing a function of government as is used in paragraph 149(1)(c) of the Income Tax Act? It also discusses whether a subsidiary is tax exempt.
Posted by
.(JavaScript must be enabled to view this email address) on 08/25/2010 |
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Ethics and Canadian Charities
A bill to impose a salary cap on Canadian registered charities has passed 2nd reading and will shortly be reviewed by the Finance Committee of the House of Commons. As they say, there is usually one simple solution to a complex problem that is totally wrong. To have a single cap for all Canadian charities means that Canadian hospitals, research institutions, and universities will not even have a chance of being able to compete with other similar institutions around the world. While it sounds appealing to cap salaries at $250,000, a very problematic piece of legislation when you drill down to the details . You see it is not about what charities want to pay for things - every charity would ideally want everything for free. Charities need to able to recruit people to accomplish their mission. Charities should never pay more than they need to. They should never pay more than fair market compensation. But you cannot just put a one-size fits all number on what it is. When there are only a few neurosurgeons you cannot pay what you want - you need to pay something related to the going rate for neurosurgeons or be prepared to do without them. If you are a small community in the North and you want to have a specialist in your community, you may have to pay that person more than what a comparable hospital in Toronto or Chicago would pay.
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.(JavaScript must be enabled to view this email address) on 08/23/2010 |
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Canadian Charity Law
I will be doing a number of programs for the Institute of Chartered Accountants of Ontario (ICAO) including on Top Compliance Issues - Registered Charities, Directors, CAs; Charity Fundraising and Receipting Rules and Recent Legal Developments Affecting Registered Charities.
Posted by
.(JavaScript must be enabled to view this email address) on 08/15/2010 |
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Planned Giving and Canadian Charities
I will be one of the presenters at an upcoming PFC program called Global Giving - Possibilities and Pitfalls.
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.(JavaScript must be enabled to view this email address) on 08/09/2010 |
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Here is the segment (2.5 minutes) with Sean O’Shea, a consumer reporter for Global TV. Mark Blumberg, moi, is being interviewed along with much more serious, important, and influential characters such as Marcel Lauzière of Imagine Canada http://www.globaltoronto.com/Video+Donor+beware/3378491/story.html
The case involves the CRA denial of EFILING privileges to Mr. Christopher Paterson, an individual who prepares clients’ returns because he assisted them with a “scheme” in which the applicant “accepted money from taxpayers who wished to “donate” to these charitable organizations in exchange for an “enhanced receipt” for tax purposes (the scheme). The receipt provided to the taxpayer would reflect a much larger sum of money than was actually paid and would then be used in the preparation of the client’s tax return to provide the client with sizeable deductions from their taxable income.” Mr. Paterson had objected to the CRA determination and the Federal Court upheld the CRA decision. The CRA Chief of Appeals had noted “[The applicant’s] conduct was disreputable in nature because of [his] involvement in selling charitable donation receipts to [his] clients for gain. Further, [he] knowingly prepared returns using these donations receipts from which there were no actual contributions to the registered charities. As a result, [the CRA] find[s] that [his] conduct in this matter does not reflect positively on the integrity of the EFILE program…” The court noted “While the applicant may not have had any reason to question the authenticity of the receipts his clients were being supplied, he most definitely knew that the amounts paid by his clients were not equal to the amounts they were given credit for when he was completing their income tax returns. There was evidently some sort of wilful blindness on the part of the applicant. The mere fact that the applicant did not believe this to be fraudulent does not detract from his admission that he participated in a scheme whereby taxpayers were making claims for the deduction of sums of money they never paid to these charitable organizations. As it is often said, ignorance of the law is no excuse.”
Posted by
.(JavaScript must be enabled to view this email address) on 08/04/2010 |
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Canadian Charity Law
The Kootenay Doukhobor Historical Society v. The Queen case illustrates quite well that even if a non-profit and a staff person agree that the staff person is an independent contractor, there is an independent contractor agreement, and the staff person has considerable latitude in carrying out the tasks, the staff person can be found to be an employee. It is vital that non-profits and charities properly categorize staff. Failure to consider someone an employee when they really are an employee, and failure to withhold EI, CPP and income tax amounts, can result in considerable liability for a non-profit or charity. As well, directors of the non-profit or charity can be on the hook for the outstanding amount and this is probably the most common reason that the directors of a non-profit or charity would ever have personal liability.
Here is a list with the 2008, 2009 and 2010 major deregistrations along with a link to the CRA press release and scanned copies of the actual letters sent by CRA to the charities outlining their reasons for revoking or annulling their charitable status.
Posted by
.(JavaScript must be enabled to view this email address) on 08/01/2010 |
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Alberta requires some charities to register under its Charitable Fund-raising Act including those who raise $25,000 or more per year, or use a fundraising business to fundraise for the charity. There are exclusions if your charity only fundraises from family or members, you only ask for in-kind goods (rather than cash) or you only do gaming such as bingo under the Alberta Gaming and Liquor Commission. If you meet the registration requirements, and do not fit within one of the exceptions, then your charity must register with the Alberta government, even if you are registered with the Charities Directorate of the Canada Revenue Agency.
July 2010
Posted by
.(JavaScript must be enabled to view this email address) on 07/29/2010 |
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CIDA
Here is a press release in which CIDA Minister Bev Oda announces further steps to achieve aid effectiveness. http://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/CEC-722111726-KXG There is also a backgrounder. This document is a must read for any organization receiving CIDA funds or hoping to one day. There is a lot in this document and it will be interesting to see if practically this makes any real difference at CIDA.
Posted by
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Canadian Charity Law
With the recent changes in the 2010 Federal budget including the elimination of the 80/20 expenditure rule it became necessary for CRA to revise the T3010 Registered Charity Information Return.
Here is a copy of my presentation to the Ontario Council For International Cooperation (OCIC) on “Advocacy and Political Activities for Canadian International Development Charities: Some Legal and Ethical Perspectives”.
Posted by
.(JavaScript must be enabled to view this email address) on 07/27/2010 |
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Avoiding 'Charity' Scams
There was recently an interesting case “Innovative Gifting Inc. v. House of the Good Shepherd” that involved charities. This was not a case involving the Federal Court of Appeal or Tax Court - the usual places charity law issues are dealt with. This case was in the regular Ontario court system - some “fundraisers” called Innovative Gifting were trying to enforce an agreement they had with a number of Canadian charities. The long and the short of it, the court would not enforce the agreements as they found them to be void or voidable because they were counter to public policy and the agreements were “vague, uncertain and filled with inherent inconsistencies”.
Posted by
.(JavaScript must be enabled to view this email address) on 07/26/2010 |
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Avoiding 'Charity' Scams
Chris Sorensen of Macleans just wrote a piece entitled “An artful scheme: One firm’s pitch to help people use a tax shelter by buying and then donating old photos is raising eyebrows in the art world and words of caution from experts”. It discusses a scheme called VIA (Vintage Iconic Archives) Project.
Posted by
.(JavaScript must be enabled to view this email address) on 07/21/2010 |
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Here are some questions and answers from the CRA relating to the Application of the GST/HST to Canadian Registered Charities
Posted by
.(JavaScript must be enabled to view this email address) on 07/21/2010 |
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Here is a revised version of the Canadian Charity Law Checklist by Mark Blumberg.
Canadian_Charity_Legal_Checklist_by_Mark_Blumberg.pdf
The Charities Directorate of CRA has added a number of new pages dealing with revoking registrations of Canadian registered charities. These pages will help a charity that is either proposed to be revoked or has been revoked understand its rights and obligations. Here is What’s New http://www.cra-arc.gc.ca/chrts-gvng/chrts/whtsnw/menu-eng.html and here is the section on revocation: http://www.cra-arc.gc.ca/chrts-gvng/chrts/rvkng/menu-eng.html
It is good to see more Federal and provincial cooperation in the charity area. Here is a pamphlet jointly put out by Revenue Quebec and CRA entitled Charitable Donations and Gifts - Giving Wisely by Revenue Quebec and CRA. It will be useful for donors.
The CRA is cracking down on tax preparers and others who issue false charitable donation receipts.
Posted by
.(JavaScript must be enabled to view this email address) on 07/18/2010 |
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Avoiding 'Charity' Scams
The Tax Court of Canada case Nantel, M. et al. v. The Queen provides an interesting discussion of valuation of art. The court dismissed the taxpayers appeals and sided with the Canada Revenue Agency.
According to a press release from the CRA, a Canadian registered charity has had its status revoked for being part of a support network for a listed terrorist organization.
