November 30, 2007
Toronto Charity For the Poor Accused of Tax Shelter Scheme
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More on the application of the intermidiate sanctions in Canada:
On November 29, 2007, CRA announced that it had issued a Notice of Suspension to International Charity Association Network (ICAN), a registered charity under the Income Tax Act (the “ITA”), for a period of one-year period, commencing November 28, 2007 (see CRA Issues Notice of Suspension to International Charity Association Network: http://www.cra-arc.gc.ca/newsroom/releases/2007/nov/nr071129-e.html). As a result of the 2004 Budget, the CRA was provided with new authority to impose intermediate sanctions, including suspension, on registered charities effective for taxation years beginning after March 22, 2004. The suspension of charitable status imposed upon ICAN appears to be the first sanction of this sort imposed by CRA since the introduction of the intermediate sanctions.
In this instance, the Notice of Suspension has been issued pursuant to subsection 188.2(3) of the ITA, which provides that a registered charity under suspension:
may not issue official donation receipts for gifts it may receive, is no longer a qualified donee as defined by the ITA must, before accepting a gift, inform the donor that it has received a Notice of Suspension, that it is not a qualified donee, and that no official donation receipt may be issued for gifts received.
See Charity law Bulletin 117 entitled “Guidelines for Applying the New Intermediate Sanctions for Charities,” available at www.charitylawbulletin.ca, for a detailed discussion of CRA’s guidelines for the application of intermediate sanctions.
Posted by: Karla Simon | Dec 1, 2007 12:35:16 PM