Avoiding 'Charity' Scams

February 14, 2018

Isah, A. v. The Queen (TCC) - TCC imposes gross negligence penalties for

The Tax Court of Canada in Isah, A. v. The Queen (TCC) deals with donations disallowed by CRA and the court ultimately decided to impose gross negligence penalties on the taxpayer who submitted fake official donation receipts. 

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February 14, 2018

Consultation “Reviewing Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime”

The Department of Finance is reviewing Canada's anti-money laundering and anti-terrorist financing regime.  They have published a consultation paper at Reviewing Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime.  They are looking for submissions on the discussion paper before April 30, 2018.  I have met FATF in the past when they were evaluating Canada's effectiveness in dealing with AML and ATF and there are significant concerns - especially relating to the legal sector in Canada.   

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February 01, 2018

CRA’s List of Areas of Non-Compliance with ITA Provisions for Canadian Private Foundations

February 01, 2018

CRA’s List of Areas of Non-Compliance with ITA Provisions for Canadian Charitable Organizations

January 28, 2018

Upcoming Blumbergs’ Events for 2018 - Bootcamp, T3010 and Receipting

Understanding legal compliance for registered charities is not easy but Blumbergs is offering 3 exciting new upcoming events in 2018 that will help.   

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January 27, 2018

Our directory of top resources for Canadian registered charities

Over the last 10 or more years, we have published over 2500 blog posts.  Except for a few avid readers, that might be a little overwhelming so we have started to create a directory of some of the top resources for Canadian charities.  This will be particularly helpful for those who are new to registered charity compliance issues or to the charity sector.

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January 25, 2018

With foreign activities what is the difference between a conduit and a structured arrangement?

Here is an updated article on the difference between a conduit and a structured arrangement - it is entitled Canadian Charities and Foreign Activities: Conduit versus Structured Arrangement.

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January 22, 2018

Common Paragraphs for an Administrative Fairness Letter from the Charities Directorate of CRA

Here is our note "Common Paragraphs for an Administrative Fairness Letter from the Charities Directorate of CRA". It contains explanations of common concerns that CRA may find during an audit that, unless appropriately addressed, may result in various penalties, sanctions or even revocation.

January 17, 2018

CRA Charities Directorate Audit Statistics

In a presentation to E&Y Gary Huenemoeder of the Charities Directorate provided certain updated audit statistics for 2016-2017 which shows the outcomes of the CRA's completed audits.

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January 09, 2018

Top 68 CRA Reasons for Denying your Canadian Registered Charity Application

In this article "Top 68 CRA Reasons for Denying your Canadian Registered Charity Application" we have obtained from CRA a list of some of the most common and not so common reasons for CRA to be concerned with a charity application.   

December 20, 2017

Top Canadian charity law compliance issues By Mark Blumberg

Here is an article on Top Canadian charity law compliance issues by Mark Blumberg.  Hopefully it provides a good overview of the most common compliance issues for Canadian registered charities with an emphasis on concerns from the Charities Directorate of CRA.

December 16, 2017

Canadian Charity Foreign Activity Legal Checklist - Working with Foreign Charities or Intermediaries

Here is a new checklist from Blumbergs that will assist Canadian registered charities either interested or currently conducting foreign activities.  It is called Canadian Charity Foreign Activity Legal Checklist - Working with Foreign Charities or Intermediaries 2017.

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November 30, 2017

US changes to tax code could mean big problems for US charities

The US House and Senate are looking at major changes to the tax code that could have a significant impact on US donors and whether they receive any tax incentives for their donations.  Now, 1 in 3 US donors may get a tax incentive when they donate to charity; with the proposed changes, only 1 in 20 US donors will receive a tax incentive for their donations.  A number of US charity umbrella groups have been lobbying hard to prevent certain changes.  We will know shortly whether the charity sector will be blindsided or if last minute amendments will occur.  There are lots of lessons here for Canada.

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November 14, 2017

Class action lawsuit for $800 million over Global Learning Group Inc. (GLGI) donation program

Apparently a class action lawsuit has been launched relating to the GLGI scheme.  In a press release the lawyers for the plaintiffs note "the commencement of a proposed $800 million class action lawsuit against Global Learning Group Inc. (GLGI), and other individuals and entities involved in the development, structuring, creation, promotion and operation of the Global Learning Gifting Initiative Charitable Donation Program (the Gift Program), a complex leveraged charitable donation tax scheme that operated from 2004 to 2014."

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November 10, 2017

CRA Launches Charities Education Program

The CRA has recently announced the launch of a new program called the Charities Education Program.  The program is going to have CRA auditors visit charities but not in the normal audit capacity.   The CRA anticipates that about 500 of these visits will take place per year.  We will see how the program works out but there are going to be some reservations about this new initiative.   If this is an educational program are CRA auditors the best people to do the program? Will charities be confused by this program and the difference between this program and the regular audit program?  Could the resources being used for this program rather be used for responding to written correspondence and charity applications sooner, because they are both taking about a year right now?  Time will tell how the program works out.    

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October 28, 2017

Charity Commission releases guidance on “grant funding an organisation that isn’t a charity”

The Charity Commission of England and Wales has released a guidance Grant funding an organisation that isn’t a charity. It sets certain standards when an English charity provides a grant to a group that is not a charity such as a non-profit or social enterprise, businesses or foreign groups that is not "or may not be" a charity.  In Canada when a Canadian registered charity gives funds to a "qualified donee" it is typically relatively straightforward and simple, however, when a Canadian charity transfer funds or resources to a non-qualified donee such as a foreign charity then these sort of rules apply.  In Canada it is called having a "structured arrangement" with direction and control. I will discuss the Canadian rules at the end.

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October 25, 2017

Third-party civil penalty disclosure from CRA - 164m in penalties from 2009 - 2016

CRA has provided information through ATIP on third-party civil penalties from 2009 to 2016.  The number of completed third-party penalty audits where it was determined that the penalty would be applied is 67.  The amount of the penalties was about $164 million.  Here is the disclosure.

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September 30, 2017

Blumbergs’ Receipting Kit 2017 by Mark Blumberg

We have just released our updated Blumbergs' Receipting Kit 2017. The Blumbergs' Receipting Kit 2017 is for Canadian registered charities and other qualified donees who wish to issue official donation receipts under the Income Tax Act (Canada), which are sometimes referred to as "tax receipts".  It has a general description of how receipting should be conducted and then copies of documents and resources from the CRA and elsewhere that relate to receipting.

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September 28, 2017

Upcoming CPA Ontario charity programs with Mark Blumberg

Mark Blumberg will be delivering two upcoming Chartered Professional Accountants of Ontario (CPA Ontario) charity programs:  Charity Fundraising and Receipting Rules - A Primer for Accountants and T3010 and Transparency in the Charitable Sector.  

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September 28, 2017

CRA reminds those applying for charity status about privacy and collection of information on them

CRA has just published a lengthy page on Personal information of directors, trustees and like officials that discusses how the Charities Directorate uses personal information provided in a charity application and in your registered charity's annual filings.

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September 15, 2017

CRA increasingly focused on and auditing internal controls of registered charities

Although the CRA has little guidance on internal controls, they are increasingly focusing on internal controls, or the lack thereof, in charities.  Internal controls are "a procedure or policy put in place by management to safeguard assets, promote accountability, increase efficiency, and stop fraudulent behavior."  A simple example is having two people sign cheques or having two people count cash.  I am hoping that one day CRA will provide greater guidance on their expectations surrounding internal controls but for now here are some thoughts and suggestions.  

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August 30, 2017

Australian national risk assessment into the NP sector discusses terrorist financing and AML

An interesting new report from The Australian Charities and Not-for-profits Commission (ACNC) as well as the Australian Transactions Reports and Analysis Centre (AUSTRAC) published on August 28, 2017 looked at "the risk of money laundering and terrorism financing in the not-for-profit sector, key vulnerabilities and risk indicators of high-risk organisations, groups of high-risk organisations that will benefit from targeted outreach and support, vulnerabilities that could be exploited to support terrorism, and a strategy to counter these vulnerabilities".

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August 29, 2017

Ontario Government Proposal to Allow Compensation of Directors of Charities Without Court Order

Here is Blumbergs' comments on the Ontario Government Proposal to Allow Compensation of Directors of Charities Without Court Order that were submitted to the Ministry of the Attorney General today. 

June 18, 2017

Charities, Regulation and Donors - some international perspectives from the CCLA

The Canadian Charity Law Association (CCLA) is pleased to present: Charities, Regulation and Donors - some international perspectives on June 22, 2017 at 8:30AM in Toronto.  The 1/2 day program will cover 4 thought provoking topics (see bios below) and have two excellent international guests.  The room can only hold 33 people so if you are interested book quickly.

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May 28, 2017

Ploughman v. The Queen, 2017 TCC 64

The recent decision of Ploughman v. The Queen, 2017 TCC 64 deals with a "third-party civil penalty" against Mr. Ploughman for his involvement in what CRA refers to as "abusive charity gifting tax shelter" but this decision refers to as a "donation program".  The court dealt with an appeal of the assessment of the third-party civil penalty and rejected Mr. Ploughman's appeal.

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Do you require legal advice with respect to Canadian or Ontario non-profits or charities?

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Charity Lawyer Mark Blumberg

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.

mark@blumbergs.ca
416.361.1982
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