The Canada Revenue Agency ("CRA") and
the Federal Court of Appeal have taken surprising positions
recently that expose registered charities to revocation risk if
they make mistakes on their T3010 – Registered Charity
Information Return ("T3010") and other
tax filings. While we may not agree with the Court or the CRA on
this, we recommend that charities become much more careful in
completing tax filings generally and in preparing T3010s
In Jaamiah Al Uloom Al Islamiyyah Ontario v. Canada
Opportunities for the Disabled Foundation v. Canada (National
Revenue) 2016 FCA 94
("Opportunities"), the CRA put
forth a surprising interpretation and the Court took a very broad
approach to the provision of the Income Tax Act (the
"Act") which permits revocation of
registration for failure to file a T3010.
Until these cases, we had always understood the revocation
provision of the Act as really only applying to a charity that did
not file a T3010 at all. However, in Jaamiah, the CRA
argued that it could revoke the registration of a charity pursuant
to the revocation section where the charity did not issue T4s and
T4As properly. In Opportunities, the CRA argued that it
considered a T3010 containing errors to be a T3010 that was not
filed and therefore it could revoke registration of a charity that
made errors in its return.
Whether failure to issue T4s and T4As is actually grounds for
revocation remains unclear as the Court in Jaamiah upheld
revocation on other grounds. It is unfortunate that the Court did
not more clearly strike down the CRA on its position in this
regard. T4s and T4As have nothing to do with a charity's
compliance and revocation for such a failure would be capricious.
As well, there are separate penalties under the Act applicable to
employers relating specifically to T4 and T4A filings.
Much more worryingly, in Opportunities, the Court
concluded that the charity had made "serious" errors in
the T3010 and that a T3010 with errors was not filed "as and
when required" thereby supporting revocation. This is very
troubling. The CRA often disagrees with T3010 filing positions but
should not be able to revoke solely on that basis. Leaving aside
statutory interpretation, the CRA should not be able to revoke for
failure to file a T3010 when one was actually filed.
As a result of these two decisions, charities should be careful
to accurately prepare and carefully file their T3010s. Charities
should also be vigilant about other non-charity tax filing
obligations. Indeed, charities that can afford to do so should
consider having their external financial auditors and their charity
/ social impact lawyers review their T3010s prior to filing. This
will help reduce errors in the T3010 and may also enable the
charity to argue later that any areas of CRA disagreement were
blessed by tax advisors and therefore cannot be "serious"
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).