The CRA has been focusing in on charities that have not been active for a number of consecutive years.  They have been sending out letters to the various charities asking  them if they want to voluntarily give up their charitable status, or explain the reason for inactivity, or CRA may take compliance action.  CRA is presumably concerned with inactive charities as they clog up the system and also may be targets for charity scammers to take over and use inappropriately.   

For directors of these “inactive” charities who are not on top of the charity they should realize that if someone activates the charity and does things that are inappropriate they may end up with liability.  People should check if you are a director of such entity.  You can search databases such as  

For many inactive charities the theory has been why not keep it going in case it is needed in the future.  Having the charity will save the time and effort of establishing a new charity.  This may make sense in some cases.  Keep in mind that changing an active charity for a new mission can sometimes take as long as establishing a new charity.  Also having an old charity may in some cases create more issues than starting from scratch.     There are also other potential short term solutions like having a donor advised fund or working with another charity. For some it may be worthwhile to obtain legal advice on the various options. 

Here is an example of a redacted letter:

We are writing to inform you that _____________________Foundation (the Organization) has been selected by the Canada Revenue Agency (CRA) for a review as a registered charity under the Income Tax Act. The review relates to the Organization's fiscal periods ended December 31, ____ to December 31, _____.   Our review of the Registered Charity Information Return(s) (form T3010) filed for the above-noted fiscal periods indicates that the Organization has been inactive for the last  ____ consecutive years. In addition, we note that since the Organization was initially registered on ____________, it has not carried on any charitable activities.

In this connection, it is our view that the Act requires that a registered charity be active in order to be meeting the requirements for which it obtained registration.

Furthermore, it is our opinion that based on the interpretation of a combination of wording used in particular provisions of the Act, the Minister of National Revenue has the authority to grant registered status to those entities that are active and the discretion to revoke those that are inactive.

Specifically, when considering the definition of a “registered charity” in subsection 248( 1) of the Act, along with the definition of a charitable foundation, in section 149.1, it is our opinion that a registered charity must (emphasis added) be active. Furthermore, subsection 149.1 (1) defines a “charitable foundation” in part, as a corporation or trust that is constituted and operated (emphasis added) exclusively for charitable purposes.

Notwithstanding the foregoing, we appreciate that there can be a variety of legitimate circumstances which may prevent a registered charity from carrying out its operations as planned. In this regard, please provide us with a written response explaining why the Organization has not been actively carrying on its charitable programs and when it plans to begin operations in the future.

Your reply should be as detailed as possible and include specific timelines for the Organization to begin operations. On the basis of the information provided, we will exercise our discretion to determine if the Organization should maintain its registered status.

If the Organization no longer intends to carry on charitable programs it needs to request voluntary revocation of its registered status. If the Organization chooses to exercise this option, we require the request in writing. As a consequence of voluntary revocation, you will no longer be required to complete the T3010. 

Additional consequences of voluntary revocation include:

a) The Organization will no longer be exempt from Part I Tax as a registered charity and will no longer be permitted to issue official donation receipts (emphasis added). This means that gifts made to the Organization would not be allowable as tax credits to individual donors or as allowable deductions to corporate donors under subsection 118.1 (3), or paragraph 110.1 (1 )(a), of the Act, respectively. As the Organization has not issued any official donation receipts recently this would not appear to be an issue.

b) By virtue of section 188 of the Act, the Organization will be required to pay a tax within one year from the date stated in the Notice of Intention to Revoke a Charity's Registration (Form T2051A). This revocation tax (see attached) is calculated on prescribed form T2046 “Tax Return Where Registration of a Charity is Revoked' (Return). 

The Return must be filed, and the tax paid, on or before the day that is one year from the date stated in the T2051A. The Return is available on our website at

Subsection 188(2) of the Act stipulates that a person (other than a qualified donee) who receives an amount from the charity is jointly and severally liable with the charity for the tax payable under section 188 of the Act by the charity.

c) The Organization will no longer qualify as a charity for purposes of subsection 123(1) of the Excise Tax Act (the ETA). As a result, the Organization may be subject to obligations and entitlements under the ETA that apply to organizations other than charities. If you have any questions about your GST/HST obligations and entitlements, please call GST/HST Rulings at 1-888-830-7747 (Quebec) or 1-800-959-8287 (rest of Canada).

The Organization must submit either an explanation with details as to its inactivity or a request for voluntary revocation within 30 days of the date of this letter to the address below. You may also fax your response to my attention at 613- 946-6484. Failure to respond within the required timeframe could potentially result in the revocation of the Organization's registered status.

Please note that the confidentiality provisions of the Act restrict us to discussing the issues in this letter with an authorized representative only. Normally this would be an individual listed as a current director/trustee on the Organization's Directors/Trustees and Like Officials Worksheet (form T1235) on file with the CRA.  Consequently, if there have been any changes in directors/trustees of the Organization since it filed its last T301 O; please forward a copy of the revised form T1235, signed by an authorized representative of the Organization.

If a third party is representing the Organization, we require written authorization naming the individual, signed by an authorized representative of the Organization, explicitly authorizing that individual to discuss your file with us.

Should you require further information, clarification, or assistance, please do not hesitate to contact me at 613-946-7537 or 1-800-267-2384.

Yours sincerely,


Office Audit Section

Compliance Division

Charities Directorate

Canada Revenue Agency

Place de Ville, Tower A

320 Queen Street, 8th floor

Ottawa ON K1A OL5

What is the Revocation Tax?

Under the Income Tax Act a charity becomes liable to pay the revocation tax when it voluntarily gives up its registration, or when the Canada Revenue Agency (CRA) revokes its registration. The purpose of this tax is to ensure that charitable property is applied to charitable use. In essence, it requires a revoked charity to spend its money on its charitable programs or to donate it to an eligible donee. If the revoked charity does this, the tax may be zero. To the extent that it fails to do this, the tax is set at the amount that remains once outstanding debts have been paid. Persons connected with the charity can also be liable for the tax under certain circumstances.

Source: RC4424 – Completing the Tax Return Where Registration of a Charily is Revoked