What's New from the Charities Directorate of CRA

May 28, 2009

Christ Apostolic Church of God Mission International - compliance agreement and revocation

In the Christ Apostolic Church of God Mission International v. Canada (National Revenue) (2009 FCA 162) A-287-08, Date: May 20, 2009 the Federal Court of Appeal upheld a revocation by the Canada Revenue Agency of this church’s charitable status.  This church had signed a “compliance agreement” and then the CRA withdrew the compliance agreement after an audit that showed non-compliance by the church.  The court concluded “It was open to the Minister, after reviewing the audit report, to conclude that the appellant’s non-compliance was so substantial that it could not be remedied by the promises made by the appellant in the compliance agreement.”  Organizations that sign a compliance agreement must remember they will be held to a high standard and they must be extra careful to abide by the provisions of the compliance agreement. As well if you sign a compliance agreement during an audit and at the end of the audit the CRA or the Minister after receiving the report decide that the conduct was particulary problematic they may revoke the compliance agreement and move to take away the charity’s status.  Many charities view a compliance agreement as the end of their worries - in fact signing a compliance agreement is the beginning of a path of having to run a charity at a much higher level than what was done before or you will almost certainly in the near future lose your charitable status.

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May 26, 2009

T3010A and T3010B CRA forms now saveable and fillable

CRA just advised that certain T3010 forms on their Charities and Giving Web site, have been improved so that they are now saveable in addition to being fillable.  By downloading the fillable/saveable PDF version of the form charities can save their work as they go, print the completed form and mail it to the Charities Directorate.

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May 19, 2009

The House of Holy God - all that is sweet is not always charitable

Another title could be “Maple Syrup Business is not always charitable”.  Many American comedians were concerned with the departure of George Bush that they would not have jobs, or at least their jobs would become more difficult.  Never fear- if there is nothing to laugh at in the US you can always come up to Canada.  In The House of Holy God case the courts had to work really hard to decide whether a charity registered for advancement of religion could be solely engaged in the business of producing and selling maple syrup and maple syrup products.  The court found on the particular facts that the maple syrup business with paid employees is not a related business, and because it was run by paid employees (not 90% volunteers) it was not allowable.  The Court noted “In particular, the record does not contain any evidence that the carrying on of a maple syrup business is an element of religious doctrine.”  Registered charities need remember that even if all of the profits of the business are dedicated to charitable objects that does not make it a related business that can be carried out by the charity.  The Court did not find CRA’s conclusion that the maple syrup business is not a related business unreasonable.

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May 13, 2009

Holy Alpha and Omega Church of Toronto Case - fraudulent tax receipts

This case is not that interesting except for the facts.  A church is accused of being involved with the fraudulent sale of official donation receipts, CRA is revoking their charity status, the church is asking for a stay of the revocation, CRA is asking to put in another affidavit and the court is saying no more affidavits lets get to the hearing.  I guess we will find out how this turns out.

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May 13, 2009

Charitable receipts for orchestra trip and annual membership dues for orchestra

CRA in this letter to a charity outlines their position that a charity can issue official donation receipts for amounts when fixed amounts are paid by persons participating in an organized orchestra trip as long as all advantages are subtracted from the value of the donation receipt.  As well where annual membership dues are paid by members towards the general operations of the Orchestra they can receive a official donation receipt minus the advantage.  I think at some point CRA should develop a more robust position on when it is appropriate for a charity to be paying for travel expenses.  This is an area of concern - we saw Universal Aide but there are a lot more complicated situations were charities are issuing donation receipts for expensive international travel and it is more in the grey zone.  When in doubt, either as to the amount of an advantage or the appropriateness of issuing a tax receipt, a charity should not issue a tax receipt or contact CRA and get their advice.

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May 12, 2009

CRA successfully attacks abusive charity gifting tax shelters

According to CRA In 2008, the value of charity tax shelter gifting arrangements has been reduced by 1/2.  This is an important victory for CRA in curbing some of the more extreme charity tax shelter arrangements.

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May 09, 2009

CRA Consultation on Protection of Human Rights and Charitable Registration

The CRA has just released a Consultation on proposed Guidance on the Protection of Human Rights and Charitable Registration  CRA is asking those interested to provide comments on the draft guidelines.  The consultation will be of particular interest to those involved with human rights or the issue of political versus charitable.  The consultation will close on July 31, 2009.  The consultation can be found at:
http://www.cra-arc.gc.ca/chrts-gvng/chrts/cnslttns/ghrg-eng.html

May 08, 2009

CRA cracking down on charities not filing financial statements with T3010

Canadian charities must file a copy of their financial statement along with the T3010 Registered Charity Information Return.  In the past CRA was not as strict about this requirement but now they are following up on it more as people can ask CRA for a copy of a charities financial statement and CRA needs to make it available.  Make sure you file your financial statements along with the T3010 or you will get a notice like this ...

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May 06, 2009

The Philanthropist - excellent legal and philanthropic resource is now free

The Canadian legal and philanthropic publication The Philanthropist is now both online and FREE.  You just need to register and will find some very good articles on different issues affecting charities and non-profits in Canada.  You can reach the website at:  http://www.thephilanthropist.ca/index.php/phil/index   While you are at it you can check out my new article on Mergers and Amalgamations within the Canadian Non-Profit and Charity Sector.

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May 04, 2009

Clergy Residence exemption does not apply to religious leader at religious school

Is a rabbi at a Jewish school entitled to the clergy residence exemption?  Although he may be a member of the “clergy” he is not in charge of, or ministering to, a diocese, parish or congregation, according to this CRA income tax ruling.

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May 01, 2009

Supreme Court dismisses appeal with costs for Choson Kallah Fund of Toronto

The Supreme Court of Canada has dismissed an appeal with costs by the Choson Kallah Fund of Toronto to a Federal Court of Appeal decision which I had written on previously at:
http://www.globalphilanthropy.ca/index.php/blog/cra_revokes_choson_kallah_fund_of_toronto/ and http://www.globalphilanthropy.ca/index.php/blog/canada_revenue_agency_deregistering_record_number_of_questionable_canadian_/ and
http://www.globalphilanthropy.ca/index.php/blog/millennium_charitable_foundation_case_fca_not_impressed_with_charity_tax_sh/  This is an important victory for those who do not want the charity sector in Canada to be overrun by tax avoidance and evasion schemes.  It also shows that with abusive charity tax schemes the Supreme Court is prepared to allow CRA to immediately revoke the charitable status rather than allowing them to keep their status while appealing all the way to the Supreme Court.

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May 01, 2009

CRA Checklist on Canadian Charities avoiding terrorism

The CRA has just published a very helpful page entitled “Checklist for Charities on Avoiding Terrorist Abuse” and it can be found at:
http://www.cra-arc.gc.ca/chrts-gvng/chrts/chcklsts/vtb-eng.html

April 28, 2009

Draft Consultation on Proposed Guidance on Advancement of Religion as a Charitable Purpose

Here is a copy of a draft paper delivered by Terry de March, Director General of the Charities Directorate, at a conference in Australia.  At some point in the future CRA may have a consultation on this topic and the document may or may not be similar to this draft.  Here is the Draft Consulation on Proposed Guidance on Advancement of Religion as a Charitable Purpose from the Charities Directorate of the Canada Revenue Agency

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April 26, 2009

Universal Aide Society Case - FCA does not approve of non-responsive charity request for injunction

In the recent Federal Court of Appeal case Universal Aide Society v Minister of National Revenue, 2009 FCA 107 (F.C.A. Apr 02, 2009), the court denied an injunction by the charity to prevent the CRA from publishing a Notice of Intent to Revoke the registration of the charity.

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April 22, 2009

Charities Directorate of CRA adds many new documents to website

CRA has been busy updating their website at http://www.cra-arc.gc.ca/chrts-gvng/chrts/menu-eng.html If you are interested in rules and regulations for Canadian charities and have not visited the CRA website recently then I encourage you to do so.

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April 16, 2009

Checklist for Canadian Charities on Avoiding Terrorist Abuse from CRA

The CRA has just published a very helpful page entitled “Checklist for Charities on Avoiding Terrorist Abuse” and it can be found at:
http://www.cra-arc.gc.ca/chrts-gvng/chrts/chcklsts/vtb-eng.html

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April 12, 2009

When do I need to file my Canadian Charity’s T3010A or T3010B Registered Charity Information Return?

Every Canadian registered charity has to file a T3010 information return each year. The return must be filed no later than six months after the end of the charity’s fiscal period.

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April 12, 2009

CRA adds disclaimer to T3010 Registered Charity Information Return data on website

CRA has added a disclaimer at the top of its T3010 Registered Charity Information Return information on their website:

“The information displayed below has been manually entered by the CRA from the registered charity’s Registered Charity Information Return. This information has not necessarily been verified for accuracy or completeness by the Charities Directorate.  Registered charities that notice problems with their online information should visit the amendment page for instructions on how to correct the information.” (my emphasis added)

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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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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.

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