The Canada Revenue Agency has finally released the long-awaited Non-Profit Organization Risk Identification Project Report. The Report is the culmination of the CRA's Risk Identification Project regarding Non-Profits which commenced in 2009. A copy is available here.
During the course of the Project, concerns were raised as a result of education letters forwarded to some participants and there has been some apprehension regarding the CRA's interpretation of section 149.1(l) of the Income Tax Act which grants the tax exemption to non-profits. The Report is generally unsurprising but interesting in its reference that a "significant" number of the non-profits reviewed in the Project would "fall into a higher category of risk" of non-compliance with the requirements of the tax exemption.
The 2014 Budget announced that the Federal Government intends to review the scope of the current tax exemption for NPOs. This is a very important sector issue and when the details of the Consultation are released, we encourage the participation of sector organizations and advisors.
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