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Charities Directorate announces extension of T3010 filing deadlines till December 31, 2020 in response to COVID-19

There has been a lot of pressure on CRA to announce changes to various tax deadlines.  We just heard that CRA is allowing late filing of personal income tax return from April 30 to June 1, 2020.  We may be hearing more in the next few days.  I will just comment in this note on the deadline to file the T3010 Registered Charity Information Return which is 6 months after the end of a registered charity’s fiscal year.  This article is not dealing with other deadlines under the Income Tax Act (Canada).

Here is a neat chart from CRA that indicates the fiscal year-end and the filing date.

 

Image result for cra t3010 filing dates

 

So a charity with a September 30 fiscal year-end has a filing date of March 31.  This affects about 2000 charities.  A charity with an October 31 fiscal year-end will need to file by April 30.  This is about 1229 charities.

For a charity to file the T3010 it needs to have certain information for the form and also have its financial statements ready.    For some charities, they have all this information ready and they have access to the CRA CHAMP system and I encourage them to file online and on time.

WIth other charities they don’t have either all the information for the T3010 or the charity or their accountants have not completed the financial statements yet or it may be hard for them to mail or courier the information to CRA.   It is not helping that if you have a question on the T3010, the Charities Directorate call centre is closed until April 5. (Other CRA call centres dealing with CHAMP etc may be open).  For these charities, they may not be able to file on time and as I will explain below that is not a big deal.

 

There are a couple of myths out there.  One is that filing late will result in revocation.   Generally, unless a charity is more than 3 months late the CRA will not revoke the charity’s registration for non-filing.  Second, there is a myth that filing late is a very bad thing that CRA will hold against you forever.   Well, they probably will hold it against you forever – they keep track of dates that the T3010 is filed but if you are generally filing on time this will be considered to be a relatively trivial matter.  In other words, I have never seen a charity revoked for late filings on multiple occasions let alone once – I have seen really bad charities that were revoked on 20 different items (terrorism, false receipting, etc) saying the revocation was for late filings or non-filing!

I am a big fan of transparency but in the past I have often said if I have a choice of a charity filing a month late or getting the information right – I much prefer getting the information right.

Charities have an obligation not to put their own people’s lives at risk.   If someone who prepares the T3010 is in quarantine, or an accountant has closed her offices, then expecting them to take risks with their lives or others in the community so your charity can meet a deadline is unreasonable and may create a problem for you.

CRA does not have so much to say about risk.  But here it goes from the CRA’s guidance on foreign activities:

 

4.2 What if a charity’s activity puts people at risk?

If a charity or applicant’s activity exposes anyone to the risk of harm, it may affect its charitable status.

If an organization’s activity is likely to result in harm to the charity’s staff, the beneficiaries of its programs, or any other person, this harm is taken into consideration when assessing whether the public benefit test is met. To meet this test, a substantial net public benefit is required. If no substantial net public benefit is provided, the organization will fail the public benefit test. A charity could lose its registered status, and an applicant will not be registered as a charity.

On a practical level, the CRA recognizes that many situations and activities involve some element of risk. Sometimes it is not possible to predict all outcomes and hazards of certain activities, particularly in quickly changing international environments. However, a charity or applicant should be able to show an awareness of the level of risk an activity poses versus the benefit that can be provided. If the charity intends to proceed with the activity, the charity should have an appropriate plan to mitigate significant risks to an acceptable level.

The facts of every situation are different, and it is not possible to provide a comprehensive guide of how to manage risk for all activities. However, the CRA will usually look at the following types of factors to establish whether a charity is doing enough to evaluate and manage the level of benefit to risk:

  • the likelihood and nature of harm to anyone delivering the activity, receiving the benefit, or otherwise affected
  • the urgency of the need for charitable assistance (for example, an activity that helps desperate people in regions affected by a disaster, or in war zones)
  • the experience of the charity or applicant operating in situations with significant risk
  • the charity’s proposed measures to mitigate any significant risks

 

Yes this guidance was probably not written contemplating the risks of filing a T3010!  However, the same principles apply.

So while I would encourage charities to generally file early or at least on time, I think it is pretty much expected that many charities with a March T3010 filing date will be late.  Try to diarize to get the T3010 in next year a couple of months early so it does not look like a trend. If you are still really worried, think about improving other areas of compliance when you have time or as the COVID-19 problem subsides, as we have noted in our recent checklist.

Most importantly stay safe and continue to help people in your community as best you can without taking inappropriate risks.   Follow the advice of your local public health and other relevant authorities.