Ottawa, Ontario, August 10, 2009... The Canada Revenue Agency (CRA) has revoked the charitable registration of Jesus El Buen Pastor Spanish Pentecostal Church of Toronto, a Toronto-area charity. This revocation was effective August 8, 2009.
On June 29, 2009, the CRA issued a notice of intention to revoke the charitable registration of Jesus El Buen Pastor Spanish Pentecostal Church of Toronto, in accordance with subsection 168(1) of the Income Tax Act. The letter stated, in part, that:
Our audit revealed that the Charity has devoted a significant portion of its resources to the promotion of the Insured Giving Donation Program tax shelter gifting arrangement. Our audit has concluded that from January 1, 2006 to December 31, 2007, Jesus El Buen Pastor Spanish Pentecostal Church of Toronto issued in excess of $18.5 million in receipts for cash and non-cash gifts received through this tax shelter arrangement. Of this amount, $15.8 million consisted of non-cash gifts that the Charity reports to have distributed as part of its own activities. However, the Charity's records fail to substantiate that the property actually existed, that the property was in the Charity's possession, that the values recorded on the receipts were accurate or that the property was distributed for charitable purposes.
The remaining $2.7 million was received as tax-receipted cash donations. Of this amount, the Charity directed $2.1 million to fundraising expenses and earned a meagre $56,000 for use in its own charitable activities. The Charity's earnings represent 2% of the gross cash donations received or 0.3% of the gross tax‑receipted donations reported.
It is our position that the Charity has operated for the non-charitable purpose of promoting a tax shelter arrangement and for the private benefit of the tax shelter promoters. The Charity has issued receipts for transactions that do not qualify as gifts; issued receipts otherwise than in accordance with the Income Tax Act and its Regulations; and has failed to maintain sufficient books and records. For all of these reasons, and for each of these reasons alone, it is the position of the CRA that the Charity's registration should be revoked.
The notice of intention to revoke and other letters relating to the grounds for revocation are available to the public on request by calling 1-800-267-2384.
A charity that has had its charitable status revoked can no longer issue donation receipts for income tax purposes and is no longer a qualified donee under the Income Tax Act. The organization is no longer exempt from income tax, unless it qualifies as a non-profit organization, and it may be subject to a tax equal to the full value of its remaining assets.
Registered charities in Canada perform valuable work in our communities, and Canadians support this work in many ways. The CRA regulates registered charities through the Income Tax Act and is committed to ensuring that charities operate in compliance with the law. Where a registered charity is found not to comply with its legal requirements, the CRA may apply monetary penalties or may suspend or revoke the charity's status under the Income TaxAct.
The CRA is reviewing all tax shelter-related donation arrangements (for example, schemes that typically promise donors tax receipts worth more than the actual amount of the donation), and it plans to audit every participating charity, promoter, and investor. For more information about tax shelters, go to the CRA's Tax alert Web page at www.cra.gc.ca/alert.
For more information about the registration of Canadian charities, go to the CRA's Charities and Giving Web page at www.cra.gc.ca/charities.
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