Receipting by Canadian Registered Charities

November 25, 2016

CRA has released a folio on “Split-receipting and Deemed Fair Market Value”

CRA has just released a chapter in their Income Tax Folio series for charities and non-profit organizations.   The new part is S7-F1-C1, Split-receipting and Deemed Fair Market Value.  Income Tax Folios are CRA’s official summary of its interpretation on certain income tax matters and this is the first chapter for Folio 1 Charitable Gifts and Deductions. The new folio relates to subsections 248(30) to (41) of the Income Tax Act (Canada), which contain the split-receipting rules and deemed fair market value rule.

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November 03, 2016

CRA releases new educational video series on ‘Gifting and Receipting’

CRA recently released its first video as part of a new educational video series on 'Gifting and Receipting'.  This series is meant to educate the public, donors, and those involved in the charitable sector on the type of donations that are tax-receiptable and the different CRA rules regarding receipting.  

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October 29, 2016

Blumbergs’ Snapshot of the Ontario Charity Sector 2014 - focus on Ontario registered charities

We are proud to present the Blumbergs’ Snapshot of the Ontario Charity Sector 2014.  The data subset used is the CRA's 2014 T3010 data but only for registered charities based in Ontario.   

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September 07, 2016

Cost of charitable tax incentives in Canada approximately $4 billion per year

In the notes section of a CRA presentation "Regulation of Charities - Overview" the CRA notes that in 2012 the amount of receipts issued was $14.28 Billion and that "the federal assistance for charitable donations in 2012 exceeded $2.9 ... Individuals also claimed over $1 billion in provincial and territorial tax credits billion".  Therefore the cost of having a tax subsidy just for donations to registered charities is almost $4 Billion. 

July 27, 2016

Tax Court of Canada decision in Duguay, N. v. The Queen (TCC)

In a recent decision of the Tax Court of Canada, Duguay, N. v. The Queen, a taxpayer claimed charitable donations made to a Canadian registered charity providing housing for low-income people and seniors residences but these were denied and the taxpayer decided to appeal the decision.   

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July 22, 2016

Mariano v. The Queen - massive cost award against GLGI of close of $500,000

In a recent decision Mariano v. The Queen, the Tax Court of Canada (TCC) awarded a very large cost award in favour of CRA (who was the respondent in the matter) and against GLGI, the promoter, and some of its investors.  The Court ordered costs of $491,136.95 minus the costs of two expert witnesses which will have to be determined.  The TCC also noted with respect to CRA "The Respondent was totally successful in the trials of the above matters involving a charitable donation scheme which spanned over 25 days of hearings including one week of oral argument supplemented by detailed written argument given by both sides."  Please note they did not say largely successful - they said "totally" successful.   It is quite clear that the TCC after many many years is getting impatient with listening to arguments in favour of what the CRA used to call "abusive charity gifting tax schemes".   

July 15, 2016

Markou v. The Queen - deals with a Canadian tax shelter scheme - a little cash gets a big receipt!

Markou v. The Queen, 2016 TCC 137 is a super boring case dealing with the jurisdiction of the Tax Court of Canada and whether such court can make a determination as to whether certain proceeds are part of a Quistclose trust.  Beyond whether there are or are not enough legal gymnastics in this decision there is lots of interesting background on a complicated tax scheme from 2001 that probably few have heard of.  The leveraged donation scheme known as "The Donation Program for Medical Science and Technology" was implemented by Trinity Capital Corporation from 2001 - 2003.  An example of one donor is that he put in $3,520,000 and received a tax receipt for $11 million which would save him about $3.2 million in Federal taxes and $1.9m in Ontario taxes.    

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July 13, 2016

Deluca Case - CRA not responsible for your unsuccessful investment in a charity tax shelter

Deluca v Canada, 2016 ONSC 3865, is an Ontario Court of Justice claim by Mr. Deluca against the CRA.  Mr. Deluca had invested over $100,000 in a tax shelter involving a barter network and 'donations' to a registered charity.  When CRA denied his donation claims Mr. Deluca sued the CRA because he argued they owed him a duty and they were slow in revoking the status of a registered charity.  The courts quite harshly dismissed Mr. Deluca's claim.  I guess you can summarize the case as -all because a business and a registered charity encourages you to get involved in a questionable donation scheme and CRA does not accept the validity of the donation you cannot use CRA as an 'insurance policy' to cover your losses by suing CRA.

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June 29, 2016

Canadian registered charities no longer required to register as a charity in Quebec

As a result of the 2016 Quebec Budget, Canadian registered charities are no longer required to complete a separate charitable registration in Quebec in order to be able to issue tax receipts to donors in Quebec.

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May 26, 2016

CRA letter on donation of capital property and donation receipt

CRA recently released a letter which discusses whether an official receipt issued for property donated in kind can include an amount less than the fair market value of the property.  CRA cited section 3501 of the Income Tax Act (Canada) Regulations to confirm that an official donation receipt should include the amount of the fair market value or the deemed fair market value of the property, in certain circumstances.  

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May 10, 2016

Application for leave to appeal denied by SCC in Ray Castro v. Her Majesty the Queen

We have previously blogged about the decision of the Tax Court of Canada in David, R. et al. v. the Queen (TCC) (herehere and here).  In the previous decision of Canada v. Castro, 2015 FCA 225, the Minister appealed the decision in David v. The Queen by asserting that the Tax Court of Canada erred in law.

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March 23, 2016

CAGP Advanced Canadian Gift Planning Course in Toronto

The CAGP will be offering an Advanced Canadian Gift Planning Course in Toronto from June 1-3, 2016.

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March 22, 2016

2016 Federal Budget and its impact on non-profits and charities

Today the new Liberal Government has delivered their first budget.  Here is our article 2016 Canadian Federal Budget - How will it affect the Canadian charitable sector?

March 16, 2016

Recent FCA decision French v. Canada, 2016 FCA 64

In a recent decision of the Federal Court of Appeal, French, it dealt with a technical issue of whether an argument should be struck, as it was by the Tax Court judge, "on the basis that it was doomed to fail" or there was not "a glimmer of a legal basis”.  The Federal Court of Appeal concluded in this case that "it is not plain and obvious that the impugned plea cannot succeed and that the appeal should accordingly be allowed."  It is a very high threshold for a party to have part of a pleading be struck and this did not meet that "no chance of success" line.   

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February 23, 2016

Should a registered charity issue an official donation receipt for gifts from a qualified donee

We get this question often.   If a registered charity receives funds from a qualified donee then it should not issue an official donation receipt.  For example a private foundation sends your registered charity a cheque for $10,000.00.   Do you issue them an official donation receipt?  The answer is no.

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February 12, 2016

National Post - ‘Can I get a tax receipt?’: Tax confusion muddles Syrian refugee sponsorship efforts

On February 11, 2016, the National Post had an article entitled "‘Can I get a tax receipt?’: Tax confusion muddles Syrian refugee sponsorship efforts".  The article discusses some of the complexity around the current receipting rules and how they have created confusion for registered charities in certain cases when fundraising for Syrian refugees in Canada.  The National Post references a proposal that I have made to provide greater clarity to the rules.

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February 03, 2016

R. v. Raza, -using criminal courts to crackdown on charity fraud

There was recent case of R. v. Raza, 2015 BCSC 2512 (CanLII).  The three accused were tax preparers who were charged with fraud for allegedly being involved with the issuance of false donation receipts. 

January 25, 2016

CRA adds guidance on “Assisting people affected by the conflict in Syria”

Many Canadian charities and donors wish to assist Syrian refugees and those affected by the conflict.  CRA has just released guidance to assist donors and charities understand their legal obligations.

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January 21, 2016

Canada v. Scheuer, - CRA not responsible for bad shelters that have tax shelter numbers

In the recent case of Canada v. Scheuer, 2016 FCA 7 the Federal Court of Appeal sided with CRA.  A number of people who had invested in abusive tax shelter arrangements sued CRA because CRA had issued a tax shelter number.  The FCA concluded that CRA had no alternative but to issue the tax shelter number and such number does not mean that the tax shelter works. CRA does not have a duty to warn "investors" that a scheme like GLGI is suspect.  Although I might add that CRA does warn people not to invest in these schemes. Also the FCA suggested "the plaintiffs acknowledge that they received independent legal opinions, opinions from accountants and valuation appraisals in respect of the tax shelter. The issuers of such opinions, who benefited financially from the provision of their professional advice, are better placed to indemnify the plaintiffs in the event of negligence in the exercise of their professional responsibilities."   In other words the FCA is encouraging those who invested in these schemes to sue the lawyers, accountants and valuators who provided opinions and appraisals if they were negligent. 

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January 19, 2016

Charity Village webinar “Top 20 Compliance Issues for Canadian Charities”

I will be presenting a webinar for Charity Village on January 28, 2016 on Top 20 Compliance Issues for Canadian Charities.

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December 16, 2015

V. Ross Morrison v. The Queen -deals with Canadian Humanitarian Trust and Canadian Gift Initiative

The Honourable Justice F.J. Pizzitelli of the Tax Court of Canada dealt with a motion in V. Ross Morrison v. The Queen. The court dismissed the motion with costs. The cases deals with the Canadian Humanitarian Trust (“CHT”) and Canadian Gift Initiative (“CGI”) which CRA would describe as abusive charity gifting tax schemes.   Mr. Morrison had wanted that the CRA to "disclose or produce for inspection the names and municipal and/or email addresses of all persons who have filed Objections to the Reassessments in the CHT and CGI Donation Programs and whose Objections have not been resolved (the “Outstanding Objectors”);" The court noted "I do not agree with any of the Appellant’s arguments. The Appellant has neither provided nor argued any legal precedent that supports his position on any of these issues. There is ample precedent against."

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December 04, 2015

CRA Revokes the Registration of Le Refuge des Rescapes for involvement in tax shelter scheme

Today the Canada Revenue Agency announced the revocation of the registration of of the Canadian registered charity Le Refuge des Rescapes for issuing over $2 million in official donation receipts connected with an abusive charity gifting tax scheme. 

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November 25, 2015

CRA initiative “Protect yourself against fraud”

It is interesting to see that CRA used to refer to "abusive charity gifting tax schemes" and they appear to be lumping them in with fraud.  "Meet Mary & William. Mary and William are a married couple with kids. They have fallen victim to a donation tax shelter scheme. Find out more about Mary and William’s story and how you can protect yourself against fraud."

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November 02, 2015

Successful appeal by CRA in Canada v. Castro, 2015 FCA 225

We have previously blogged about the decision of the Tax Court of Canada in David, R. et al. v. the Queen (TCC) (here and here). In this decision, the court allowed the appeals of the respondents relating to tax credits that had been previously disallowed by the Minister of National Revenue for gifts the respondents had made to CanAfrica International (CanAfrica), a registered charity, in 2006 (each of the respondents was issued an inflated tax receipt by CanAfrica).  

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October 26, 2015

GLGI abusive charitable gifting tax scheme slammed in Tax Court of Canada

In the case Mariano v. The Queen 2015 TCC 244 the Honourable Justice F.J. Pizzitelli reviewed in great detail the Global Learning Trust (2004) and the Global Learning Gift Initiative (GLGI) program.  These programs are what CRA calls abusive charity gifting tax schemes.  For those interested in the regulation of charities and the definition of gift this is a must read case.  It discusses gifts and donative intent, fair market value and valuation reports.  Mr. Justice F.J. Pizzitelli goes into great detail and analyzes the various positions, their expert witnesses and the conduct of the promoter's advisors.

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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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