What's New from the Charities Directorate of CRA

April 09, 2009

Don`t Leave the T3010B Registered Charity Information Return till it is too late

Canadian charities whose fiscal year end is in 2009 need to file the T3010B within 6 months of the 2009 fiscal year end.  The T3010B is a mixed accounting and legal form that requires more information than the previous T3010A.

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April 09, 2009

New CRA Support for charity legal and compliance education in Canada

The Honourable Jean-Pierre Blackburn announces an investment of $3.1 million to assist small and rural charities understand their legal and compliance requirements

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April 06, 2009

CRA Publishes New Policy on Application for disbursement quota relief

With the difficult economic times and many charities and foundations feeling the pinch CRA has probably received many more inquiries about disbursement quota issues.  This brief policy will clarify some of the concerns and explains when CRA may grant some relief from the disbursement quota requirement. The original policy can be found at: http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cpc/cpc-029-eng.html

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April 01, 2009

2009 National Charity Law Symposium In Toronto

The Canadian Bar Association and Ontario Bar Association Charity and Not-for-Profit Law Sections and the Continuing Legal Education Committee are presenting the 2009 National Charity Law Symposium.  You can come and hear me speak about what’s new with foreign activities by Canadian charities.  It is on Thursday, May 7, 2009.  Here is the brochure for the 2009 National Charity Law Symposium

March 22, 2009

CRA’s Factors that will prevent an organization from being registered as a charity

CRA just put out a easy to read and understand list of “Factors that will prevent an organization from being registered as a charity”.  Perhaps CRA put out this list because with 4000 new organizations putting in applications every year to become registered charities, some of whom are not understanding what a charity is or restrictions on the activities of a charity, they wanted to make it clearer what will not qualify and hopefully they will receive better applications, or fewer, and this will reduce the backlog.  I think however that the list has an even more important purpose.

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March 18, 2009

Charity Scams in Canada - Costing Us All A Lot

Here is some statistical information on Charity Scams - Costing Us All A Lot.  Just to give some perspective far more funds flow to charity tax avoidance schemes in Canada than to all the money spent by Canadian charities on relieving poverty in the developing world!!

February 23, 2009

T3010B - New CRA Canadian Charity Information Return for 2009

The Charities Directorate of the Canada Revenue Agency has revised their form T3010A with a new form called the T3010B, and it is supposed to be used by Canadian charities for fiscal years ending in 2009.

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February 21, 2009

Millennium Charitable Foundation Case - Federal Court (FCA) not impressed with charity tax shelters

The Millennium Charitable Foundation Case deals with abusive charitable gifting schemes.  The Federal Court of Appeal (FCA) sided with CRA in this matter.  It is well worth reading for anyone concerned with the charity sector.

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February 08, 2009

Canada Revenue Agency Charities Directorate Update November 2009

This CRA Charities Directorate Update presented in November 2009 provides some interesting information and statistics on compliance issues for the sector.

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February 01, 2009

Political Activities and Canadian Charities -Some CRA Policies and letters on political activities

Most of CRA’s view on political activities by Canadian charities can be found in Policy Statement CPS-022 Political Activities. (see Political Activities (CPS - 022) located at http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cps/cps-022-eng.html   I highly recommend that any charity considering conducting any activity that could be construed as political, review in detail the CPS-022 Policy Statement on Political Activities.

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January 27, 2009

CRA calls an apple an apple - Project Trident

CRA has launched a new initiative called “Project Trident” in which they are targeting the “Triple Threat Tax Fraud” namely “identity theft, charities?related fraud, and tax preparer fraud.”

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January 19, 2009

Draft of new T3010B Registered Charity Information Return released

Here is part of a draft of the new T3010B which was included in a recent Bulletin of the CCCC.  This part relates to the T3010B questions on foreign activities by Canadian charities with some of my comments in red.
New_T3010_Questions_on_foreign_activities_from_Blumbergs.pdf

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January 16, 2009

Recent case on Canadian registered charity and business activities -Hostelling International Canada

This article deals with the recent Canadian Federal Court of Appeal case Hostelling International Canada – Ontario East Region in which the Federal Court of Appeal upheld the CRA decision to revoke their charitable registration.  Under the Canadian Income Tax Act, charitable organizations and public foundations can carry on “related business” that promote their charitable objects. An example would be a hospital cafeteria - providing food to patients and visitors. They can also carry on other unrelated business activities if “substantially all” (CRA says at least 90%) of the people involved in these activities are volunteers.  Here is my article on
Canadian Charities and Business Activities and a copy of the decision in the federal court of appeal Hostelling International Canada – Ontario East Region

December 16, 2008

New CRA Application for Registered Charity Status (T2050) and Guide (T4063)  finally arrived

December 06, 2008

Do we have too many registered charities in Canada?

November 30, 2008

CRA Warning to charities: no lending of charitable registration numbers

September 15, 2008

How Much Should A Canadian Charity Spend on Overhead such as Fundraising and Administration?

Here is my updated article on “How Much Should A Canadian Charity Spend on Overhead

This note discusses why low overhead may not be a good thing for a charity and what is appropriate.

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July 02, 2008

Redeemer Foundation v. M.N.R. (F.C.A.)- Federal Court agrees with CRA on audit powers with charities

This case dealt with whether the Charities Directorate of CRA requires judicial authorization to request certain information from a registered charity and CRA won the appeal.  The CRA note headnote/summary is below.

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April 14, 2008

Banyan Tree Foundation, law firm Fraser Milner Casgrain sued for $55m in class action lawsuit

The law firm of Scarfone Hawkins LLP in Hamilton has recently brought a class action lawsuit against a number of parties for their involvement with the Banyan Tree Foundation including the law firm of Fraser Milner Casgrain.  It will be interesting to see how this case turns out.  I predict that there will be other cases against other law firms that have been involved with preparing opinion letters for transactions that CRA considers to be “shams”.  The allegations in the statement of claim have yet to be proved in court.

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April 03, 2008

Has the regulation of Canadian charities operating outside of Canada become increasingly burdensome?

I often read commentators talking about the ‘increased burden’ placed by Canada Revenue Agency on Canadian charities operating abroad or the ‘increasingly complicated’ administrative rules.  I then scratch my head and wonder what increased burden and what increased rules?  The CRA has not modified RC4106 since 2000 (almost 8 years)  and since the publication of that document the CRA has in fact provided greater leeway to registered Canadian charities in operating abroad for example charities that are umbrella organizations.  The CRA has also provided clarifications in newsletters on various issues that they have been asked about.  The CRA has also made far greater efforts to educate charities about compliance issues for Canadian charities operating abroad including through a recent educational partnership with certain charities.

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April 01, 2008

Fundraising Policy for Canadian Registered Charities by CRA

Here is my article which discusses the Consultation on Proposed Policy on Fundraising by Canadian Registered Charities (RC4456-e).


Here is a link to http://www.cra-arc.gc.ca/tax/charities/consultations/fundraising-e.html which is the CRA’s “Consultation on proposed policy on fundraising by Registered Charities.”  This is a 6 page document and apparently there will be another document forthcoming that is about 40 pages in length that will add to the overview document.

Here is a copy of a presentation on April 1, 2008 by Neil Cochrane and Peter Broder of the Charities Directorate of the Canada Revenue Agency to the Ontario Bar Association entitled CRA Fundraising Policy Overview

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March 10, 2008

Regulation of Charitable Giving in Canada –A Presentation by Blaine Langdon

Here is a presentation by Blaine Langdon, Senior Policy Officer, of the Charities Directorate of the Canada Revenue Agency entitled
Regulation of Charitable Giving in Canada –An Update

January 31, 2008

CRA’s 10 reasons why an application for Canadian charitable status will not be successful

The CRA recently posted their top ten list of why applications for charitable status will not be successful.  It was placed in a Consultation document entitled “Charitable Work and Ethnocultural Groups - Information on registering as a charity “.  As an aside the last time I saw a study on the difference between applications for charitable status that were accepted by CRA and those that were rejected the most important factor correlating with acceptance was use of a lawyer.  Although one does not need to use a lawyer, the process is anything but straightforward.  If one is going to use a lawyer it is important to use a lawyer who is knowledgeable about charity law and especially important if you plan on conducting activities outside of Canada that the lawyer be familiar with CRA requirements for Canadian charities operating abroad.  Just one little example they cite for denying an application “The application does not include any copy of an agreement with representatives who are supposed to help the organization to carry out its activities outside Canada.”  CRA expects when one files an application that references foreign activities to be carried out under a structured arrangement (agency, joint venture, cooperative partnership, contractor) that in fact the agreement be attached.  This comes as a surprise to some including experienced practitioners.  Also they don’t mean some nice looking agreement - they mean an agreement that complies with ALL the requirements in RC4106.  Some may see this as harsh - however, if an organization takes shortcuts and does not have the resources and advisors to put in an appropriate application for charitable status it is not difficult to imagine that some of those same people may take shortcuts later when the charity is operating.

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November 29, 2007

CRA Issues Notice of Suspension to International Charity Association Network

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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.

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