Canada Revenue Agency

Canada Revenue Agency

November 29, 2007 15:00 ET

CRA Issues Notice of Suspension to International Charity Association Network

OTTAWA, ONTARIO--(Marketwire - Nov. 29, 2007) - The Canada Revenue Agency (CRA) has issued a Notice of Suspension to International Charity Association Network (ICAN), a registered charity under the Income Tax Act (ITA), stating that it has been suspended for one year beginning on November 28, 2007.

As stated in the Notice of Suspension:

"It continues to be the Canada Revenue Agency's (the "CRA") view that the International Charity Association Network (ICAN) is in contravention of subsections 230(2), 231.1(1) and 231.2(1) of the Income Tax Act (the "ITA") by failing to maintain and/or provide, and failing to provide access to, books and records relating to its involvement with tax shelter arrangements.

The Charity has failed to maintain sufficient documentation to support payments and expenditures including $26,372,685 in fundraising payments and $244,323,422 in charitable program expenditures. Further, the Charity has failed to provide required documentation to the CRA. It is the CRA's position, that these are serious contraventions of the Income Tax Act and warrant the immediate suspension of the Charity."

A charity that has been suspended has no authority to issue donation receipts for income tax purposes for gifts it may receive during its suspension. Also, during the suspension, the charity is deemed not to be a qualified donee, prohibiting other registered charities from making gifts to it during that period. It should be noted that this Notice of Suspension applies only to ICAN.

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 ITA 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 ITA.

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, visit the CRA's Tax Alert section at www.cra.gc.ca/alert.

For additional details about the specific circumstances of this suspension, please consult the attached backgrounder.

BACKGROUNDER

Notice of Suspension to International Charity Association Network

On November 21, 2007, the Canada Revenue Agency (CRA) issued a Notice of Suspension to International Charity Association Network (ICAN), a registered charity under the Income Tax Act.

The following are extracts from the Notice of Suspension issued by the CRA:

"It continues to be the Canada Revenue Agency's (the "CRA") view that the International Charity Association Network (ICAN) is in contravention of subsections 230(2), 231.1(1) and 231.2(1) of the Income Tax Act (the "ITA") by failing to maintain and/or provide, and failing to provide access to, books and records relating to its involvement with tax shelter arrangements.

The Income Tax Act requires taxpayers to keep books and records and at all reasonable times, make their records, books of account and other supporting documents available for inspection by a person authorized by the Minister, and must provide every facility necessary to inspect them. The Minister may also require a person to provide any book, record, writing or other document or any information, for any purpose related to the administration or enforcement of the ITA, within a reasonable time as stipulated in a registered or certified letter, or a notice served personally.

The Charity has failed to maintain sufficient documentation to support payments and expenditures including $26,372,685 in fundraising payments and $244,323,422 in charitable program expenditures. Further, the Charity has failed to provide required documentation to the CRA. It is the CRA's position, that these are serious contraventions of the Income Tax Act and warrant the immediate suspension of the Charity.

The Charity's tax receipting privileges and qualified donee status as defined by the ITA, are hereby suspended for one year beginning on November 28, 2007.

In accordance with the terms of subsection 188.2(3) of the ITA, please be advised that, for the duration of the Charity's suspension, the Charity:

- May not issue official donation receipts for gifts it may receive;

- Must, before accepting a gift, inform the donor that the Charity has received a Notice of Suspension and no official donation receipt may be issued for gifts received; and

- Is no longer a qualified donee as defined by the ITA, and must inform other registered charities before receiving a gift that the Charity is not a qualified donee."

More information about registered charities is available at www.cra.gc.ca/charities or by calling the CRA's Charities Directorate at 1-800-267-2384 (toll free).

Contact Information

  • Canada Revenue Agency
    Beatrice Fenelon
    Media Relations
    613-941-6269