1. Introduction

The Community Volunteer Income Tax Program (CVITP), known in Quebec as the Income Tax Assistance – Volunteer Program (ITAVP), is a collaboration between the Canada Revenue Agency (CRA) and community organizations which host tax preparation clinics and arrange for volunteers to prepare income tax and benefit returns for eligible individuals. The program has been operating since 1971 and its mandate is to help vulnerable and underserved Canadians and families in need by preparing their income tax and benefit returns free of charge. Each year, through the CVITP, participating organizations and volunteers help hundreds of thousands of eligible individuals file their income tax returns and, as a result, receive the benefits and credits to which they are entitled.

The CRA currently has the legal and policy authority provided under the following authorities:

• Income Tax Act, subsection 220(1)
• Budget 2018 provided the CRA the authority to expand the size of the CVITP, helping more individuals complete their taxes and access benefits to which they are entitled; this expansion included funding for additional year-round benefit clinics and more outreach activities to vulnerable population segments.

2. Scope and objectives

The goals of the CVITP grant are to defray some of the administrative costs that organizations incur in hosting tax preparation clinics so as to encourage growth and increase retention amongst existing CVITP participating organizations. The grant allocates funding based on the total number of federal returns an organization files to encourage growth and facilitate retention. The expectation is that by providing financial assistance to community organizations, it will encourage more organizations to participate in the CVITP and increase the retention rate of existing organizations. The grant would also encourage CVITP participating organizations to expand the reach of their tax clinics, for example, by extending the number of days and/or hours of operation, or offering additional tax clinic locations.

2.1 Expected results

It is expected that the grant will:

• increase the number of organizations that participate in the program each year
• decrease the total number of organizations that do not return to the program after participating for two years or less
• increase the annual number of volunteers who are associated with grant recipient organizations
• increase the number of returns filed each year by grant recipient organizations

3. Eligibility

In order to be considered eligible for funding, organizations must meet all of the following criteria:

• Must register annually with the CVITP and receive CRA approval to participate in a given year.
• Must administer tax clinics and electronically file a minimum of 10 income tax returns for individuals.
• Must have two or more volunteers, each of whom must be screened by the CRA for suitability.
• Must provide services free of charge and decline any gift, monetary reward, or any other form of payment that may be offered.
• Must not make any misrepresentations in the application or in any correspondence, conversations, or updates submitted relevant to the application.
• Must keep taxpayer information secure and confidential.
• Must have a bank account with a Canadian institution and accept direct deposit.
• Must file electronic returns using the CVITP Organization Identification Number (COIN) assigned by the CRA.

3.1 Types of eligible organizations

Eligible organizations are non-profit institutions, including charities, and other community groups. Some examples include, but are not limited to:

• seniors’ support and recreation centres
• shelters and support centres
• family services associations
• settlement organizations
• multicultural societies
• service clubs (for example, Lions’ Club, Royal Canadian Legion)
• band offices
• volunteer bureaus
• post secondary student groups or associations
• places of worship
• for-profit organizations that provide free tax filing service separate from their other activities

3.2 Eligibility exclusions

CVITP clinics that are organized and/or administered as follows are excluded from consideration for funding:

• Federal or provincial Member of Parliament offices;
• Municipal counselor offices;
• Non-community or non-volunteer based organizations that normally operate tax clinics for profit (e.g., tax preparation businesses and accounting firms)

3.3 Eligible activities

Eligible activities are the administration of free income tax clinics and the electronic filing of federal income tax and benefits returns by volunteers affiliated with an approved CVITP organization.

3.4 Eligible expenses

Eligible expenses are direct expenses which are reasonable and necessary for the eligible activities specified above. All expenses must have been incurred for the purpose of hosting and administering tax clinics and filing tax returns between June 1 and May 31 the following year. For example, paying for police record checks in January in preparation for the upcoming tax season would be an eligible expense.

Eligible expenses an organization may incur and put the grant funds towards are as follows:

• Office stationery
• Office supplies
• Volunteer costs
• Costs related to Internet/telephone use for the clinics
• Rental costs associated with acquiring space specifically for CVITP/ITAVP clinics
• Human resources costs
• Clinic promotion
• COVID-19 related costs (personal protective equipment, sanitation supplies, Plexiglass dividers)

3.5 Ineligible and/or unsupported expenses

Any costs deemed not reasonable and/or not directly related to organizing, administering and hosting CVITP tax clinics are ineligible, including but not limited to:

• Activities in support of the applicant’s ongoing or core/normal business activities (should the primary business of the organization be activities other than the administration of tax preparation clinics and the filing of income tax returns);
• capital expenses related to the applicant’s ongoing or core/normal business activities;
• activities in support of regular maintenance and/or ongoing operation costs;
• costs typically supported by other federal/provincial transfer payments;
• the purchase of any assets for more than the fair market value of the said asset; and
• cost incurred prior to the current program year as defined in the funding agreement.

4. Stacking rule

A stacking limit is the cumulative total of all government assistance as a percentage of total eligible expenses. Total government assistance (TGA) is the total federal, provincial and municipal assistance received by a single organization for the same program or service. The grant application will require potential recipients of funding to disclose all sources of government funding received for the purpose of hosting and administering income tax clinics.

The stacking limit will apply to the full amount of the grant calculated. The disbursement of funds will not exceed 100% of TGA for the purpose of hosting and administering income tax clinics.

The Revenu Quebec grant is not considered TGA for the purposes of the CVITP grant application, and therefore should not be included as TGA on the application.

5. Application process

To apply for funding, each year applicants must first register with the Community Volunteer Income Tax Program (or the Income Tax Assistance – Volunteer Program in Quebec) and have CRA approval for participation. Once approved, applicants will receive a notification from the CRA and be provided with a CVITP Organization Identification Number (COIN) to both file electronic returns and apply for the grant.

Applicants must then:

• complete the online grant application with all mandatory information
• consent to be considered for funding
• agree that all information submitted in the grant application is true to the best of their knowledge
• submit their application within the application period

5.1 Application deadline

The application period will typically be open from May 1 to June 30 each year for activity completed between June 1 of the previous calendar year and May 31 of the current calendar year. The organization must file returns with their assigned COIN during the activity period. The CRA reserves the right to change the application dates based on business needs and requirements. If the CRA does change the application dates, this will not affect the previously defined activity period dates of June 1 to May 31 of each year.

Communication will also be released to promote the grant and reiterate the new funding formula, to coincide with program registration. The application period for funding in year four will be from May 1 to June 30. Organizations will be required to apply for funding annually and the funding for each organization will be based on activity from June 1 of the previous year to May 31 of the grant application year.

5.2 Application review

The CRA will use the information gathered in the organization’s program registration and grant application to assess their funding eligibility. The CRA will assess applications on a first come, first served basis while accounting for the province and territory of the applying organization . Applications will be scored based on the time and date of receipt whereby the first application received is given the highest ranking.

Applications will also be grouped by province and territory of the organizations mailing address in the CVITP registration system. Once allocated funding for each jurisdiction is depleted, any allocated funds not used by a jurisdiction will be pooled and disbursed nationally by the time and date of receipt.

As per the stacking rule in section 4, TGA will apply to the full grant funding calculated before any program ceiling is imposed. Grant funding received from Revenu Quebec for the purposes of filing Quebec provincial returns would not be considered TGA for the purposes of the CVITP grant application, and therefore should not be included as TGA on the application.

6. Funding distribution

Funding will be disbursed as a grant using the following funding formula:

• Dollar per return amount (i) – TGA = up to a maximum payout ceiling (ii)
• (i) $5 per COIN return filed by the organization.
• (ii) Maximum payout of $30,000.

To ensure that funding is distributed equitably across the country, the CRA will allocate a portion of total funding to each province and territory. The portion allocated to each province or territory is the percent determined by calculating the number of CVITP returns filed in the previous calendar year for the province or territory over the total CVITP returns filed nationally multiplied by the funding allocated to the CVITP Grant program for the current year. The CRA will distribute funding on a first come, first served basis within each province and territory, up to the maximum amount of funding allocated. Any unused funding (i.e., a provincial/territorial allocation exceeding the applications received) will be redistributed nationally to remaining organizations on a first-come, first-served basis relative to the date that their application was received, regardless of which province or territory they operate in.

The CRA will review all applications for eligibility to receive grant funding and will determine funding based on the information provided. If an organization disagrees with the CRA’s funding determination, it has the right to seek judicial review. Total funding per organization will remain within a cap of $30,000 in order to stay within the funding allotment for the pilot. Funding amounts per organization will be determined based on the funding criteria as described in section 5.2 and the provided funding formula.

The CRA will contact each organization to advise of the funding decision. The CRA will also advise successful applicants of the funding amount, as applicable in the form of a funding agreement.

7. Program monitoring and reporting requirements

The number of federal income tax returns filed through CVITP or ITAVP tax clinics will be recorded and counted towards organizations using the CVITP organization identification number (COIN).

The COIN is transmitted electronically via the electronic submission of a federal income tax return through CVITP tax preparation software. The COIN will count the total number of returns filed under each registered and approved CVITP organization. The COIN will be used to verify the reported number of returns submitted in each organization’s grant application.

Eligible organizations are responsible for ensuring that their volunteers enter the COIN correctly in the appropriate field in the CVTIP tax preparation software. If a tax return is transmitted to the CRA without a COIN there will be no opportunity to match the tax return to the organization after the fact.

Although eligible organizations will receive grant funding from the CRA, the organization, their employees and the volunteers who participate in the CVITP remain completely independent of the CRA.

8. Performance measures

To measure the success of the four-year pilot grant, the CRA will assess how well these targets were achieved:

• an annual 5% increase in the number of organizations that participate in the program
• an annual increase in the number of volunteers associated with grant recipient organizations
• an annual increase in the number of returns filed by grant recipient organizations

9. Verification and review

The program reserves the right to review funding recipients’ accounts, eligible activities, and records to ensure compliance with the terms and conditions of the grant agreement, and to request verification of information submitted within the grant application during which funding recipients may be required to present documentation.

The CRA reserves the right to review organizations at any point during their participation in the program to ensure they are meeting the requirements for participation in the program and the eligibility requirements of the grant if that organization has also applied for funding. At any time during the application intake period and the application assessment period following, the CRA may contact the applicant for information clarification, validation or substantiation necessary for the application assessment.