Charitable donation receipts must meet every technical requirement
Two recent decisions of the Tax Court of Canada demonstrate how important it is to check your charitable donation receipts, in case the CRA challenges them on audit.
The Income Tax Regulations (subsection 3501(1)) state that every receipt must contain the following:
(a) the name and address in Canada of the organization as recorded with the Minister;
(b) the registration number assigned by the Minister to the organization;
(c) the serial number of the receipt;
(d) the place or locality where the receipt was issued;
(e) where the gift is a cash gift, the date on which or the year during which the gift was received;
(e.1) where the gift is of property other than cash
(i) the day on which the gift was received,
(ii) a brief description of the property, and
(iii) the name and address of the appraiser of the property if an appraisal is done;
(f) the date on which the receipt was issued;
(g) the name and address of the donor including, in the case of an individual, the individual’s first name and initial;
(h) the amount that is
(i) the amount of a cash gift, or
(ii) if the gift is of property other than cash, the amount that is the fair market value of the property at the time that the gift is made;
(h.1) a description of the advantage, if any, in respect of the gift and the amount of that advantage;
(h.2) the eligible amount of the gift;
(i) the signature, as provided in subsection (2) or (3), of a responsible individual who has been authorized by the organization to acknowledge gifts; and
(j) the name and Internet website of the Canada Revenue Agency.
In Okafor v. The Queen, 2018 TCC 31, the receipts were otherwise correct, but were missing “the place or locality where the receipt was issued”. It was not enough that the charity’s address was shown. The donation credit was denied.
In Ruremesha v. The Queen, 2018 TCC 57, the charity’s address was shown on the receipts, but it was not the same as “the one recorded with the Minister” (i.e., the CRA). Again, the donation credit was denied.
Often in these cases there are other problems as well, and the CRA and the Tax Court suspect the donation was bogus (e.g., not really paid for, or that there was a cash kickback to the taxpayer). But the case law makes it clear that any technical flaw in a donation receipt can cause the credit to be denied.
So make sure the receipts you receive from charities have all the information above! And if you’re involved with running a charity, make sure the receipts it issues comply with all the requirements.
NOTE that the CRA recently announced that for paragraph (j) of the Regulations, the Internet website of the CRA should be shown as canada.ca/charities-giving. However, charities have until March 31, 2019 to change from showing the old cra.gc.ca/charities address.
