Canadian charities and intermediate sanctions by the Canada Revenue Agency

It used to be that if a registered charity was non-compliant CRA either revoked the charity or could do little about the non-compliance.  The times have changed.  With the introduction of “intermediate sanctions” CRA now has lots more flexibility in how it deals with non-compliance.  For example if you issue a receipt that contains false information CRA can fine the charity 125% on the eligible amount stated on the receipt.  If a Canadian charity working with a foreign charity (or other non-qualified donee) does not maintain direction and control over transfers of funds and resources then such behaviour can land a charity with a 105%-$110% penalty on the amount of the transfer.  Ouch!.

For a list of intermediate sanctions see: http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/csp/pnlts-eng.html

For the Guidelines for applying the new sanctions see http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/nwsnctns-eng.html

Mark Blumberg is a lawyer at Blumberg Segal LLP in Toronto, Ontario.  To find out more about legal services that Blumbergs provides to Canadian charities and non-profits please visit http://www.canadiancharitylaw.ca or http://www.globalphilanthropy.ca He can be contacted at .(JavaScript must be enabled to view this email address) or at 416-361-1982.

This article is for information purposes only. It is not intended to be legal advice. You should not act or abstain from acting based upon such information without first consulting a legal professional.