RCAAAs: Receipts-issuing policy
February 7, 1995
This policy statement outlines the Directorate's policy on the issuance and control of receipts by registered Canadian amateur athletic associations (RCAAAs).
Under the Income Tax Act, qualified donees are organizations that can issue official donation receipts for gifts that individuals and corporations make to them. RCAAAs are qualified donees and as such can issue official donation receipts.
1. This policy applies to registered Canadian amateur athletic associations.
2. Paragraph 168(1)(f) of the Income Tax Act provides that a gift to an RCAAA must be made without any implied or express condition or understanding that it be transferred to a local club or other named beneficiary. An RCAAA must maintain significant accountability and control over the issuance of receipts and the amount of funds raised. An RCAAA cannot lend its registration number to a member club.
3. The issuance of receipts can only be delegated to a subordinate body at the provincial level. It should not be sub-delegated by a provincial level association to member clubs without the RCAAA's consent. The RCAAA must maintain direction and control over its receipt-issuing policies.
4. A local club that has raised funds may receive a percentage of those funds as financing for the club's activities that are consistent with the RCAAA's purposes. However, the percentage returned to the local club must not form part of any solicitation for funds by the local club, or any agreement with a prospective donor.
5. An RCAAA cannot operate as a conduit for a local club's own purposes. A significant amount of funds raised must be retained by the RCAAA for its own use, for contingencies or to be redistributed to other clubs. An administration fee covering the expense of receiving funds raised and issuing receipts is not considered to be a significant amount.
6. A local club that receives percentage funding must account to the RCAAA for the amounts raised. The accounting provided to the RCAAA must enable the Canada Revenue Agency to verify whether receipts are issued in accordance with the Act. Footnote 1
7. In view of the widespread practise of soliciting contributions from parents whose children receive direct support from local clubs, an RCAAA should require as part of its granting policy, that accounting from local clubs include the names of all those athletes who receive subsidized training. Should an audit by the Canada Revenue Agency uncover any substantial abuse at the local level, the RCAAA will be deemed to have failed meeting the requirements the Act unless it can demonstrate that it had proper mechanisms in place for the proper issuance of receipts.
- Her Majesty the Queen v. Dr. F. Bruce Burns,  88 D.T.C. 6,101
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