Over the last decade, we have provided to the public CRA letters relating to a number of Canadian registered charity revocations and other CRA sanctions such as penalties and suspensions. These letters from CRA cover many different grounds for de-registration and sanctions. Some relate to relatively minor matters, such as an organization being inactive for many years, to more serious matters, such as lacking appropriate direction and control, private benefits, and even terrorism.
These letters set out the CRA reasons for revocation of charitable status when CRA is alleging cause or that the revocation was as a result of an audit and non-compliance (as opposed to voluntary revocation or failure to file). They also cover suspensions and penalties. You can request other documents directly from CRA using the CRA website.
CRA is only allowed to release very limited information on a deregistered or sanctioned charity, such as these letters, and only after deregistration or after the sanction. You can contact the former charities if you wish to obtain additional information. Because CRA alleges in a letter a particular set of facts does not make it necessarily correct. Many of these revocations or sanctions have not been tested in court.
There have been dozens or so cases in the Federal Court of Appeal with charities challenging the CRA revocations (or refusal to register a charity) or dealing with sanctions. Although sometimes the court will disagree with some of the grounds, I am not aware of any cases in the last two decades of the Federal Court of Appeal overturning the charity revocations or sanctions of CRA.
Why should people care about the revocations of charities or other CRA sanctions? The ability of CRA to revoke the registration of a registered charity or provide a sanction can have a significant impact on a charity, and the charitable sector is an important part of our society and economy. Why CRA would revoke or sanction a charity and the explanations given are important. It helps charities understand compliance issues. It also allows the public to understand whether CRA is acting reasonably in the matter. Unfortunately, CRA does not give detailed guidance on certain topics, and these letters are also helpful in understanding certain topics not covered by the guidance.
In addition to the letters below, we have recently posted other letters on April 28, 2022, December 1, 2022, February 10, 2023, March 29, 2023, April 2023, June 2023, and September 2023.
Here are the most recent letters we have received:
Holy Ghost Miracle Revival Temple Inc. – Notice of penalty
Mehaduras Friedman Foundation – Notice of Penalty
The Friedman Family Foundation – Notice of Penalty
You can find out more about penalties on the CRA website.
Here is some further information on sanctions and penalties: