What's New from the Charities Directorate of CRA
January 2010
The Haiti Earthquake shows quite vividly how difficult and complicated international charitable activities can be. From logistical issues to security, careful planning, preparation and having the requisite experience and people on the ground are important. At an upcoming conference in Toronto called Being Good at Doing Good (http://www.capacitybuilders.ca/clip/conference/index.php), supported by the Canada Revenue Agency, there will be extensive discussion of how charities must be careful to maximize their organization’s effectiveness and prevent your resources from being misused both locally and internationally. There will be a number of excellent speakers and topics on the difficulties and requirements for international operations and some of them will incorporate updates and lessons learned from Haiti.
Here is a CBC article on how scammers and cyber criminals are trying to exploit the generosity of people. Save yourself the disappointment and embarrassment and if you are interested in helping people in Haiti donate to an experienced Canadian aid organization that has operations in Haiti such as the members of the Humanitarian Coalition (http://www.thehumanitariancoalition.ca/) or Doctors Without Borders Canada (http://www.msf.ca/)
Here is some information from CIDA with respect to their Haiti donation matching program
http://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/JOS-114172324-U9P
One release is a caution encouraging Canadians to be an informed donor and see part of the CRA website on being an informed donor. The other is a reminder that in a disaster the urge by some to set up a new organization may not be the best course of action may be to donate or help “existing qualified donees (e.g., other registered charities) that have the experience, resources, and infrastructures already in place to respond rapidly and effectively in such locations.” http://www.cra-arc.gc.ca/whtsnw/tms/rthqk-haiti-eng.html I very much agree with such advice.
The CRA put out a Tax Alert today - they identified that in the last fiscal year (2008-2009) they had “reassessed over 20,000 individuals who had participated in at least 1 of 20 unacceptable tax shelter gifting arrangements.” Also they noted in the Tax Alert that when they prosecuted for fraud or tax evasion “Convictions were obtained in 98% of the cases prosecuted.” If you have been bamboozled by a charity gifting tax shelter promoter consider making a voluntary disclosure under the VDP.
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As of 2009 Canadian charities need to file the T3010B form for year ends after January 1, 2009. For almost all charities they have no more use for the T3010A. CRA has removed the old T3010A form because so many charities were mistakenly filing the t3010A when in fact they should be filing the T3010B Anyway there are reasons that one may want to look at a T3010A including if you are making application for reregistration and you are required to complete the T3010A or you are wondering about the CRA database and what number aligns with what question. Anyway CRA has done a good job hiding the form to keep it away from you those who might mistakenly use it. Here is a copy of the T3010A if you require http://www.cra-arc.gc.ca/formspubs/prioryear/t3010a/README.html
The preliminary schedule for Being Good at Doing Good: Safeguarding Yourself and your Charity in a Complex World was released today http://www.capacitybuilders.ca/clip/conference/documents/PreliminarySchedule.pdf Check out the topics and speakers and register while you can for this CLIP conference.
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The Charities Directorate of the Canada Revenue Agency has put an open call for people to comment on existing policies and guidance of the Charities Directorate. For a number of years the CRA engaged in extensive consultation with the sector and this is a continuation of that effort.
Through the Charity Law Information Program I will be delivering over 30 online webinars over the next two months. They are priced at $25 per webinar. The webinars are listed at http://www.capacitybuilders.ca/clip Here is a coupon code xq42k that allows you to register for free for any webinar as long as the registration takes place before February 1, 2010. http://www.capacitybuilders.ca/clip/clip.php
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The CRA has updated its guide P113 Gifts and Income Tax for 2009. For the document see http://www.cra-arc.gc.ca/E/pub/tg/p113/README.html This document will be of interest to donors, their professional advisors and charities.
December 2009
In Newsletter 33, CRA identified various registered charities that have had their registered charity status revoked for involvement in tax shelter gifting arrangements.
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The CRA noted in Newsletter 33 that they are accepting comments on their new Guidance CPS-028.
The CRA has updated its publication “Donations to Prescribed Universities Outside Canada” http://www.cra-arc.gc.ca/E/pub/tg/rc191/rc191-09e.pdf
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CRA Income Tax Technical News No. 41 was released December 23, 2009 and discusses rulings (opinions) on proposed legislative amendments, the definition of “Tax Shelter” – Subsection 237.1(1) and donation of flow-through shares – subparagraph 38(a.1)(i), subsection 248(35) through (41) and section 237.1
I am helping organize the CLIP conference Being Good at Doing Good: Safeguarding Yourself and Your Charity in a Complex World Feb. 22-23, 2010 in Toronto.. It promises to be a very exciting and affordable two day conference with many interesting speakers from around the world providing thoughts on governance, ethics, financial management, internal controls and foreign activities for Canadian charities. Here is a partial list of speakers that was just posted http://www.capacitybuilders.ca/clip/documents/SpeakerListing_Dec15.pdf and if you want to register you can go to http://www.capacitybuilders.ca/clip/clip-news.php For updates see http://www.capacitybuilders.ca/clip/conference/index.php
Here are copies of the handouts for a number of recent presentations that I have delivered for the Charity Law Information Program (CLIP)
Cultural property is one type of gift that a donor can make to a charity. Certain certified cultural property has certain additional benefits associated with its donation.
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Registered Charities Newsletter No. 33 was just released by the CRA today. It has some very useful information on receipting. Also CRA will be accepting submissions with respect to the fundraising guidance before April 2010. If you have ideas for improvements send them to CRA - I am also interested in this issue and if you want to send me a copy that would be great. CRA also discusses charities involved with abusive tax schemes.
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I am so excited and it is not that I am going away on vacation today for a week. The new T3010B Registered Charity Information Return, which is filed by Canadian charities for fiscal year ends beginning January 1, 2009 are now available online. Until yesterday it was only the T3010A (the old registered charity information return) that was available. There is a lot of additional information in the T3010 that is really exciting and provides stakeholders in the charity sector greater information on the individual charities and by aggregation the whole sector.
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CRA announced that “Enhancements have been made to the Alphabetical index of topics, including the addition of summary policies (CSPs).” You can find the Alphabetical Index of Topics at http://www.cra-arc.gc.ca/chrts-gvng/chrts/a-tpcs-eng.html
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In Registered Charities Newsletter No. 24 Summer 2005 the CRA discusses the status of certain First Nations groups as qualified donees. The qualified donee status is important as organizations that are qualified donees can issue “official donation receipts”. If you have questions about whether your First Nations group is a qualified donee you can call the Charities Directorate of the CRA.
I am often asked “When should a Canadian charity not issue a “official donation receipt” (tax receipt)?” First of all Canadian charities do not have to issue tax receipts - however, if they are going to issue official donation receipts, commonly known as tax receipts, then the registered charity must ensure that it is only issuing the receipt for a “gift” and subtracting any “advantage” that the donor may receive. If in doubt call CRA or contact a charity lawyer. Here is a list of transactions that generally do not result in a tax receipt being issued.
You can find the Nantel v. The Queen (TCC) decision in French at http://decision.tcc-cci.gc.ca/fr/2009/2009cci599/2009cci599.html According to the headnote it involved the valuation of a donation to a charity of a number of pieces of art that were bought by the donor about 10 years before the donation to a charity. CRA disputed the donors valuation and ultimately brought in their own valuator. Court had problems with two valuators brought in by the donor and court accepted the valuation by the CRA’s valuator which was approximately 1/6 of the donor’s valuators’ opinion.
November 2009
CRA’s Guidance “Fundraising by Registered Charities” is in two separate documents namely the main guidance at http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cps/cps-028-eng.html and http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cps/cps-028-ddn-eng.html (entitled Additional information on Guidance CPS-028, Fundraising by Registered Charities). These documents are hyperlinked together and you can go back and forth between the documents to obtain all the information. For those who find it more convenient CLIP has combined the two documents in this one document and inserted the content of the “Additional Information” directly next to the part of the the Guidance it is referring to. A reader can using this document read the guidance from beginning to end. As well it is in PDF format to make it easier for some to download to a laptop and review when they have time or to place comments or mark up. We have also increased the font size to make it easier for some to read.CRA’s_Guidance_Fundraising_by_Registered_Charities.pdf
Can a Canadian non-profit under 149(1)(l) earn a profit. Does it matter if the profit is intentional and/or will be used to further the organization’s purposes?
In Maréchaux, F.M.E. v. The Queen the case revolved around whether F. Max E. Maréchaux, was entitled to a charitable donation tax credit. Maréchaux is a lawyer at the law firm Miller Thomson LLP. http://www.millerthomson.com/index.cfm?cm=Employee&ce=details&primaryKey=16425 CRA had disallowed the donation claiming it was not a gift. The appeal which relates to the 2001 taxation year and the tax court dismissed his appeal with costs and ruled for CRA.
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CRA is asking those who visit their Charities and Giving Web pages which are geared towards donors and charities. You can take their survey at:
http://www.cra-arc.gc.ca/chrts-gvng/chrts/cmmnctn/srvy-eng.html
Russel is an art donation case. However, it is more than that. It might be the beginning of the end of the abusive charity gifting tax shelters in Canada.
Another case involving a charity losing its charitable status. Another example of a very weak case being brought that just helps perpetuate bad case law involving charities.
