Ottawa, Ontario, January 20, 2012. . . The Canada Revenue Agency (CRA) will revoke the charitable registration of Word of Christ Ministry, a Toronto area charity. The notice of revocation has been published in the Canada Gazette with an effective date of January 21, 2012.
On November 29, 2011, the CRA issued a notice of intention to revoke the charitable registration of Word of Christ Ministry, in accordance with subsection 168(1) of the Income Tax Act. The letter stated, in part, that:
Our audit of the Organization identified serious issues of non-compliance with the requirements of the Income Tax Act. By participating in a promoted donation arrangement for the 2009 fiscal period, the Organization failed to devote its resources exclusively to its own charitable activities. The Organization issued nearly $3 million in tax receipted donations related to its participation in the promoted donation arrangement. However, the Organization's records failed to substantiate that the values recorded on the receipts were accurate, that the underlying property was transferred to the Organization, or that the property actually existed.
Our audit also revealed that the Organization failed to maintain adequate books and records as required by section 230 of the Act; that it failed to issue tax receipts in accordance with Regulation 3501 of the Act; and that it failed to file a T3010, Registered Charity Information Return containing the prescribed information.
It is the view of the Canada Revenue Agency (CRA) that donation receipts have been improperly issued for amounts greater than the amounts donated; receipts were issued for transactions that do not qualify as gifts or are otherwise not in accordance with the Income Tax Act and its Regulations; and adequate records to support charitable activities and operating costs were not maintained. For all of these reasons, and for each of these reasons alone, it is the position of the CRA that the charitable registration of the Organization 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, in the language they were originally written, 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 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 perform valuable work in our communities, and Canadians support this work in many ways. The CRA regulates registered charities through the Act, and it is committed to ensuring that charities operate in compliance with the law. Registered charities receive generous tax incentives under the Act including the authority to issue official donation receipts. To maintain this privilege, registered charities are required to keep adequate books and records to allow the CRA to verify donations made to the charity and to ensure the proper use of charitable resources.
Issuing receipts for property that does not legally qualify as a gift and failing to maintain adequate books and records and are both considered serious breaches of the requirements of theAct and each are grounds for the revocation of charitable status. 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 Act.
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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The Canada Revenue Agency has announced that it will revoke the charitable registration of Word of Christ Ministry, a Toronto-area charity. The revocation will come into effect on January 21, 2012.
Canada Revenue Agency