We’ve all heard it, charitable Canadians.
If you have given to worthy causes during 2018 and have some charitable tax receipts in-hand or some on their way to you, check them carefully before simply claiming them on your tax return or they may be rejected by Canada Revenue Agency (CRA).
To this end, if you are involved with the completion of charitable tax receipts for distribution by a charity to its donors, take your efforts seriously and be sure detail is accurate and complete.
The Tax Court of Canada is respecting the technical details required for the receipting of charitable gifts as set out by CRA. The result of several recent cases has seen the Court uphold the CRA rules on what must appear on a charitable tax receipt by denying charitable tax deduction claims that used non-compliant slips.
Why all the attention? Why the close scrutiny?
Because of scam organizations acting as “registered charities”, soliciting and receiving donations, and then issuing bogus slips to those who give.
Not to mention “creative” taxpayers acting on their own and making non-legit charitable tax deduction claims.
With this realization, comes the need to enforce compliance. And with enforcement comes hassles based on seemingly silly minute detail for legitimate organizations and lawful taxpayers.
Here’s a brief description of the detail that charitable tax receipts must include to be acceptable.
The name and address of the charity as recorded with the government. If the charity moves, it’s not good enough to change only the slip or change only the address with the government. Both must be changed and match.
The registration number of the organization, a serial number of the slip, where the slip was issued, the year the slip was issued, the year the gift was made, the date the receipt was issued, the name and address of the donor including first and last name, and even the middle initial of the donor.
If a portion of the gift was cash, that cash amount has to be identified. If there was any advantage to the donor upon making the gift, for example a game of golf worth $100 was included in the $1,000 donation, than the gifted amount of $900 has to be identified. The gifting of property has to have its fair market value identified.
The signature of an authorized person with the charity must be present.
And finally, CRA must be named on the slip and have its website identified. By the way, this is a new requirement for charities and must be implemented and slips updated by March 31, 2019.
Ron Clarke has his MBA and is a business owner in Trail, providing accounting and tax services. Email him at ron.clarke@JBSbiz.ca. To read previous Tax Tips & Pits columns visit www.JBSbiz.net.