Ark Angel Foundation – Federal Court of Appeal confirms CRA’s revocation of charitable registration for paying unsubstantiated consulting fees to a director

The Foundation, a charitable foundation, received most of its revenues from three other registered charities (including the Humane Society of Canada Foundation) that were dominated by the same individual, and disbursed most of those revenues to those three charities, except that it paid approximately 1/3 of its revenues to the individual. Woods JA found that the failure of the Foundation to provide any records that substantiated the basis for the consulting fees justified the CRA’s decision to revoke the Foundation’s registration under s. 168(1)(e) (failure to maintain adequate records) and also on more substantive grounds under s. 168(1)(b) (failure to establish that the consulting services fees represented the devotion of Foundation resources to charitable activities).

Neal Armstrong. Summaries of Ark Angel Foundation v. Canada (National Revenue), 2019 FCA 21 under s. 168(1)(e) and s. 168(1)(b).