Receipt Requirement Change
In our January (2018) newsletter, we highlighted the importance of charities producing receipts for charitable donations that conform to the requirements of the law for proper receipting. Justice Campbell Miller reiterated the seriousness of a failure to comply with the Regulations of the Income Tax Act in Madamidola v. the Queen 2017 TCC 245.
One element that must be present on an official receipt is the name and website address of the Canada Revenue Agency. The website address has changed to “canada.ca/charities-giving”.
The CRA website page “Sample official donation receipts”[1] was modified on February 28, 2018, and indicates that charities and qualified donees have until March 31, 2019 to update their receipts. The page provides four samples of receipts, for each of the following gifts: cash gift no advantage, cash gift with advantage, non-cash gift no advantage, and non-cash gift with advantage.
Video Resources on Gifting and Receipting
Readers might not be aware of the many videos on gifting and receipting that CRA has produced and posted to its website. The newest CRA video, “Gift certificates and gift cards,” highlights another aspect of receipting: when a charity can issue an official donation receipt for a gift card or gift certificate (a “gift card”) donation. The key to the question is that a donation receipt can only be issued once the property has been transferred to the charity. Therefore, it matters whether the donor of the gift card is the issuer of the gift card, or the holder of a gift card (who has purchased it from an issuer). If a card is a donation from an issuer, an official donation receipt can only be provided once the gift card is used to obtain property—with the full amount of the card—thus transferred to the charity. On the other hand, if the card is donated by a card holder, who has already purchased the card and therefore owns it as property, an official donation receipt can be issued for the gift card right away.
There are many other helpful videos about Charities and Giving available at the Charities Video Gallery[2].
CRA’s “CHAMP” – Charities IT Modernization Project
In these pages last September, we provided an overview of CRA’s Charities IT Modernization Project (“CHAMP”). CRA’s update at the end of February[3] announced that in November of 2018 the following services will be available online:
- The application for registration as a charity, replacing Form T2050, Application to Register a Charity under the Income Tax Act,
- Through CRA’s “My Business Account”:
- The filing of the T3010 Registered Charity Information Return,
- The updating of a charitable organization’s information, and
- Corresponding with the Directorate electronically.
We therefore encourage charities to sign up now for My Business Account, if they have not already. The charity will need one of its authorized officials to access the My Business Account Portal, whether through CRA’s “My Account for Individuals” if the official is already registered there or, if a new user, to register with the following information at hand: social insurance number, date of birth, current postal code or zip code, business number of the charity, and personal income tax return from this year and last year.
[1] https://www.canada.ca/en/revenue-agency/services/charities-giving/charities/sample-official-donation-receipts.html
[2] https://www.canada.ca/en/revenue-agency/news/cra-multimedia-library/charities-video-gallery.html
[3] https://www.canada.ca/en/revenue-agency/services/charities-giving/charities/guidance-videos-forms/champ.html?wbdisable=true