The Charities Directorate of CRA sent out an email today to their electronic mailing list.  The full text is below and our comments are in [brackets and italics].  If you want the boring stuff from CRA then you should definitely sign up to the Charities Directorate’s electronic mailing list.  If you want more interesting stuff on Canadian charity compliance then sign up here.

 

 

Charities and giving – What’s new

The Canada Revenue Agency is resuming additional activities in September: What charities need to know

Due to the Government’s ongoing efforts to support Canadians through the COVID-19 pandemic, the Canada Revenue Agency (CRA) suspended many audit, collections and compliance activities, and committed to resuming them in a thoughtful and phased manner.

The CRA is now gradually resuming additional activities, and may need to contact Canadian charities with a specific call to action. However, you should be aware of scammers pretending to be CRA employees. They often call Canadians to try to trick them into paying fake debts, and may even contact you by email, letter, or text message. [At the moment I am more concerned by bad charities calling people than CRA but we will leave that for another day.]

To protect yourself from scams, it’s important to know when and how the CRA might contact you. Here is some information on the CRA’s activities that are resuming and tips on how to recognize when the CRA is trying to contact you and your organization. [Not sure that people are going to fully understand all of that – if you get a suspicious call – hang up politely, perhaps use the term sorry once or twice, then call the Charities Directorate directly at 1-800-267-2384 or 1-800-665-0354 for TTY service for people with a hearing or speech impairment (or call another relevant CRA department that you find on the CRA website.)

What we’re doing

Starting in September, the following CRA programs will be resuming additional business activities, which may affect your charity or organization:

Charity registration applications

The CRA is ramping up the review of charity registration applications. [Ahem – we have been getting online applications back in less than 2 1/2 months which is unheard of in the past with CRA delays.  Yes there are big problems with dealing with mailed in applications but I think the last one of those we put in was October 2019.  Definitely use the online system if you can and make sure that your application is solid with all required information or it will be rejected.]

Before applying, organizations seeking to provide pandemic relief programs should consider donating or offering services to existing registered charities that have the experience, resources, and infrastructure already in place to respond to the needs of Canadians. [This is their standard ‘lets not reinvent the wheel’ which is good advice but keep in mind that Canada is a big country and there are lots of different needs in different communities and in some cases establishing a new registered charity makes perfect sense.] However, if an organization wants to apply for registered charity status in order to respond to the pandemic, we ask that these organizations apply online for registered charity status.  [100% especially during COVID]

Many organizations that have already applied are requesting expedited review of their applications. We understand that many organizations are providing critical services within their communities at this time and are in need of access to funding and the ability to issue official donation receipts. [There is one simple way to get an expedited review – don’t dilly dally on submitting your application – the quicker it is submitted with all required information the quicker you will get a response.  You might want to review our article Top 68 CRA Reasons for Denying your Canadian Registered Charity Application.  Also use legal counsel that has extensive experience in charity applications.  When CRA applications took a year or two asking for expedited review (which rarely was granted anyway) at least requesting it made some sense.  Now with the quicker turnaround times, it makes less sense.]

Although the CRA has resumed the review of digital and paper-based applications, due to continued precautions related to the COVID-19 pandemic, the CRA’s ability to meet published service standards in regard to paper-based applications has been impacted and delays can be expected. We recommend submitting your application and supporting documentation using our digital services to help reduce any delays. As we resume more activities over the next few months, our ability to meet service standards should improve.

Charity revocations

The CRA will begin processing revocations for failure to comply with the requirements of charity registration. Your charity may receive a letter by registered mail explaining the reasons why we intend to revoke your charity’s registration. The letter will also include your objection and appeal rights. [Yes as we discussed in this recent post.]

Outreach activities

Outreach activities will continue but will follow physical distancing guidelines when necessary. Some of these activities include:

You can request a CRA outreach session. Traditionally available in-person, our outreach sessions are now available over the phone, where possible by completing an online request for an information session. You may also receive a call from the CRA for a CEP virtual visit.

Audits

The CRA’s Charities Directorate will also being contacting charities to:

  • resume ongoing charity audits
  • begin Canada Emergency Wage Subsidy post-payment audits
  • begin new audits to address highest risk areas

Errors found during an audit may not result in a re-assessment, but rather an information review with the charity, and be revisited for correction in future years. [I think this last sentence is confusing.  I think they are trying to say they have an ‘education first approach’ – if your charity is doing things that are not in accordance with your compliance obligations under the Income Tax Act you may only get an education letter.  On the other hand if it is more serious you could get a compliance agreement which means that you are agreeing to make changes and CRA will come back to your charity a few years later to see that you have not made those same mistakes or other mistakes.  In other words very few audits result in penalities, suspension or revocation of charitable status.  I guess CRA is more concise than me.]

T3010 filing deadline extended for charities

We remind you that the filing deadline has been extended to December 31, 2020 for all charities with a Form T3010, Registered Charity Information Return due between, March 18, 2020 and December 31, 2020. We encourage you to file early to avoid any delays. [Yes if you have your financials and can complete the T3010 it is best to file now and not wait till December 31.  If you choose to wait and you don’t have a good reason it is legally compliant but you are basically saying to your donors, supporters and other stakeholders that you don’t care about them having access to important information about your charity. Not a message I would want to be sending at this juncture.]

How we’re serving Canadians in their time of need

The CRA has a dedicated and highly skilled workforce committed to serving Canadians during their time of need. We are ensuring our efforts to sustain the tax system and many social programs it supports do not create undue burdens or financial hardship for Canadians as we work diligently to introduce measures to aid in the recovery of the economy.  [I think they are trying to say ‘please don’t be mean to us – we are working hard under difficult conditions’. I agree with that.]

For more information

We thank you all for your patience as we navigate through this situation together. To learn more about the CRA’s return to business activities, go to CRA and COVID-19: Resuming business activities.

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