REASONS FOR JUDGMENT
Masse D.J.
[1]
The appellant, Shama Bope,
is appealing the assessment of the Minister of National Revenue (hereinafter the Minister) respecting
his 2009 taxation year for which the charitable donation tax credit of $3,800 claimed
was disallowed. First, the Minister submits that the receipt submitted by Mr. Bope fails to meet the requirements of the Income
Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (hereinafter the Act), and the Income Tax Regulations,
C.R.C., c. 945 (hereinafter the Regulations). Alternatively,
he argues that, in any event, the appellant is unable to establish that he made
cash donations of $3,800 to Revival Time Ministries International (hereinafter Revival).
[2]
Although the Notice of Appeal and the Reply to
the Notice of Appeal were drafted in English, the trial took place in French.
Thus, the Reasons for Judgment were also drafted in French.
Factual Background
[3]
The appellant lives in Hamilton, Ontario. He works
for an auto parts manufacturer. He is originally from Africa and has been in Canada
since 2000. He stated that he wishes to help the people of Africa [Translation] “who
are suffering, people who are sick, . . . the poor.” His sister told him
about the Revival church and he made charitable donations to said church that
were intended for recipients in Africa. Although he only has a receipt for $3,800,
the appellant stated that he has donated a lot, well over $10,000, in cash and property,
or so he says. Furthermore, he has family in Africa to whom he sends money. With
respect to the cash donations, he told us that he went to the bank to make
withdrawals from his account. He only had one bank account. A portion of the withdrawals
was for Revival and the rest was used to provide for his family. He put the
money for Revival in an envelope which he gave to Revival. He made several
donations per month and at the end of the year, Revival issued to him a receipt
for the year. He stated that he did not note either the amounts allegedly
provided to Revival or the dates of the alleged donations, but claims that he
made donations each week or several times per month.
[4]
In filing his income tax return for 2009, the
appellant reported employment income of $40,047.02. He also reported charitable
donations of $3,800 made to Revival and filed a receipt confirming these donations
(see Exhibit A-1). This is a significant amount compared to his income for
the taxation year in question, representing 10% of his gross income.
[5]
The Minister assessed the appellant for the 2009
taxation year on April 15, 2010. The Minister allowed the charitable donations
as reported. On April 21, 2011, the Minister reassessed him to disallow
the $3,800 charitable donation tax credit claimed by the appellant.
[6]
The appellant objected to the reassessment; the
Minister confirmed it on May 6, 2013.
[7]
The Minister reassessed the appellant on the
basis that the appellant did not make any charitable donation to Revival in 2009.
In the alternative, the Minister concluded that the receipt issued to the
appellant by Revival did not contain all of the information that is required to
be included in a charitable receipt pursuant to section 3501 of the Regulations.
[8]
For the reasons that follow, I conclude that the
receipt provided by Revival does not contain all of the information required by
the Regulations and that on this basis alone, the appeal must be dismissed. I
also conclude that even if the receipt had conformed to the Regulations, the
appellant failed to prove, on a balance of probabilities, that he made the donations
in issue.
Statutory provisions
[9]
A taxpayer is entitled to a tax credit for gifts
made to a registered charity pursuant to subsection 118.1(3) of the Act. The
making of the gift must be evidenced by a receipt for the gift that contains
prescribed information. Paragraph 118.1(2)(a) provides as follows:
118.1(2) Proof of gift — An eligible amount of a gift is not to be included in the total
charitable gifts, total cultural gifts or total ecological gifts of an
individual unless the making of the gift is evidenced by filing with the
Minister
(a) a receipt
for the gift that contains prescribed information;
. . .
[10]
The prescribed information to be included in the
official receipt for the charitable gift is listed in subsection 3501(1) of the
Regulations. This subsection provides as follows:
3501(1) Contents of receipts — Every official receipt issued by a registered organization shall
contain a statement that it is an official receipt for income tax purposes and shall
show clearly in such a manner that it cannot readily be altered,
(a) the
name and address in Canada of the organization as recorded with the Minister;
(b) the
registration number assigned by the Minister to the organization;
(c) the
serial number of the receipt;
(d) the
place or locality where the receipt was issued;
(e) where
the gift is a cash gift, the date on which or the year during which the gift
was received;
(e.1) where
the gift is of property other than cash
(i) the date on which the gift was
received,
(ii) a brief description of the
property, and
(iii) the name and address of the
appraiser of the property if an appraisal is done;
(f) the
date on which the receipt was issued;
(g) the name and address of the donor including, in the case of an individual,
the individual’s first name and initial;
(h) the
amount that is
(i) the amount of a cash gift, or
(ii) if the gift is of property
other than cash, the amount that is the fair market value of the property at
the time that the gift is made;
(h.1) a
description of the advantage, if any, in respect of the gift and the amount of
that advantage;
(h.2) the
eligible amount of the gift;
(i) the
signature, as provided in subsection (2) or (3), of a responsible individual
who has been authorized by the organization to acknowledge gifts; and
(j) the
name and Internet website of the Canada Revenue Agency.
[Emphasis added.]
Analysis
[11]
This is not the first time that the appellant raises
the exact same issues before this Court (see Afovia v. The Queen,
2012 TCC 391 (CanLII), 2013 DTC 1016, [2012] TCJ No. 314
(QL)). In Afovia, the appellant had made cash donations totalling $4,600
in 2007 and $5,600 in 2008 to an alleged charitable organization called Parole
de Grace London. Justice Paris of this Court dismissed Mr. Bope’s appeals,
because he was not entitled to a charitable donation tax credit. Given the
similarity of the issues in the case at bar with those in Afovia, I do
not see how I can conclude differently than Justice Paris.
[12]
The analysis I must conduct is parallel to the
one I performed in Kuzi Mapish v. The Queen, 2013-3695(IT)I (TCC), February 23,
2015, and the same result ensues.
[13]
Read together, the provisions mentioned above require
that the following elements must be satisfied in order to be entitled to a charitable
donation tax credit:
(a) a gift;
(b)
a receipt to prove that it was a charitable donation.
[14]
The Minister submits that the appellant has not proven
the existence of either or both of these elements. I
agree.
Validity of receipts
[15]
In Afovia v. The Queen, supra, Justice Paris
reviewed the issue of the existence of a charitable donation and a receipt to
substantiate it. He stated as follows with respect to the receipt requirements:
[9] The question that must be decided by this Court is whether
it is mandatory that a charitable donation receipt contain all of the
information listed in subsection 3501(1) of the Regulations, including a serial
number and the name and Internet website of the Canada Revenue Agency. On the
basis of the clear wording of that provision, I find that all of the
information listed there is mandatory. The material portion of the section
states that “every official receipt issued by a registered organization ... shall show clearly in such a manner that it cannot be
readily altered ...” the information listed in paragraphs (a) to (j). (Emphasis added.)
. . .
[12] The appellants did not suggest and I am unable to conclude
that giving the word “shall” in section 3501 of the Regulations an imperative
meaning would lead to an unreasonable outcome. Parliament may have chosen to
include the requirement for a serial number on charitable receipts to
facilitate audits of charitable donations, in other words by ensuring that
records of donations are kept in an orderly fashion; the inclusion of the CRA website
address permits a donor to verify whether the charity is registered and whether
the donation is eligible for the charitable donation tax credit. I also find
that an imperative construction is consistent with the context. For example,
the requirement for serial numbers on receipts is also referred to in
subsections 3501(1.1), (3) and (4) and the requirement for the CRA website
address is repeated in subsection 3501(1.1) of the Regulations. I therefore
find that the information listed in subsection 3501(1) of the Regulations is
mandatory for official charitable receipts.
[13] Since none of the
receipts provided to the appellants by PDGL contain all of the prescribed
information, they do not meet the requirements of subsection 118.1(2) of the
Act and, for this reason, the appellants' claims for charitable gift credits
cannot succeed.
[14] The fact that the
appellants were unaware of what information was required on a charitable
receipt cannot relieve them of the obligation to support their claim for the charitable
donation tax credits with official receipts that contain the prescribed
information. This Court is bound by subsection 118.1(2) of the Act.
[16]
Justice Paris reiterated these same principles
in Ofori-Darko v. The Queen, 2014 TCC 54 (CanLII), 2014 DTC 1074,
at paragraph 14:
[14] Furthermore the receipts do not show
when the gifts in kind were received by Redemption or what their fair market
value was at that time. Finally the receipts fail to show the locality or place
of issuance of the receipt. As I indicated in the case of Afovia et al. v. The Queen, the information listed in
subsection 3501(1) of the ITR, the
information listed in subsection 3501(1) of the ITR is mandatory for
charitable donation receipts, and therefore the receipts in these appeals are
insufficient to prove the making of a gift as provided for in
paragraph 118.1(2)(a) of the ITA.
[Footnote omitted.]
[17]
In Sowah v. The Queen, 2013 TCC 297
(CanLII), 2013 DTC 1234, Justice Miller also made similar
findings, stating that
[16] . . . Case law is clear that
these requirements [set
out in subsection 3501(1) of the Regulations] are
mandatory and are to be strictly adhered to (see for example the cases of Afovia
v The Queen, Sklowdowski v The Queen, Plante
v Canada).
[17] Does the receipt provided by the Appellant meet all the
requirements? It does not. It fails on three counts. First, the receipt does
not contain the statement that it is an official receipt for income tax
purposes. In the case of Ehiozomwangie v R, Justice Campbell made it clear that the requirement that
the receipt indicate that it is an official receipt for income tax purposes is
one of the mandatory requirements. I agree. There can be no clearer reassurance
to a taxpayer on the face of a receipt than an indication that it is an
official receipt for tax purposes. Failure to meet this simple qualification
casts real suspicion on the credibility of the receipt. It is a mandatory
condition that has not been met in this case.
[18] Second, another simple requirement is the date on which the
receipt was issued. On Ms. Sowah's receipt no date is given, only the year
(January to December 2006). Again, this is a mandatory condition that simply
has not been met.
[19] Third, the receipt must show the locality or place where
the receipt was issued. This is a separate requirement from the address of the
organization as recorded with the Minister. Here, while we might presume the
address of the organization is the same place as where the receipt was issued,
this should not be left to presumption. Maybe there are several Jesus Healing
Centers throughout Toronto. It should be clear on the receipt from which place
the receipt is issued. It is not. Again, a requirement has not been met.
[20] The Appellant has therefore not provided a receipt with the
prescribed information and has therefore not met the second condition necessary
to obtain credit for a charitable donation. The Appeal can be dismissed on that
basis [Footnotes omitted].
[18]
In the case at bar, the inadequacies of the receipt
are as follows:
(a) the receipt does not show the locality or place where the receipt was issued. The receipt in this
case (Exhibit A-1) lists multiple addresses for Revival: Toronto, Zambia,
Texas, Botswana and Cameroon. The organization in this case also has a Web site.
However, the appellant resides in Hamilton. Thus, where was the receipt issued?
In Toronto, Hamilton or abroad? As indicated in Sowah, supra, the
requirement pertaining to the locality or place where the receipt was issued is a separate requirement from the address of the
organization as recorded with the Minister. While we might presume that
the address of the organization is the locality
or place where the receipt was issued, this should not be left to presumption. It should be clear on the receipt from which place the
receipt is issued, because the address of the
organization may be different from the place where the receipt was issued. This
is a mandatory condition;
(b) the receipt must show the date on which or the year during which the
gift was received. There is only one date on the
receipt, December 31, 2009. This supposes that the appellant only made a donation
of $3,800 on that date, which is not the case. The appellant claims that that
he made several donations of various amounts each month of the year. No
particulars of the dates and amounts of the donations were provided. Thus, the
receipt does not meet the criteria set out in paragraph 3501(1)(g) of
the Regulations. It seems strange to me that the appellant did not ask for a
receipt each time he made a donation. The appellant should have obtained a receipt
each time he made a donation or at least a receipt showing all the donations and
their dates. The total amount of the donations was significant compared to the
appellant’s income. It is therefore surprising that the appellant neither asked
for nor obtained a receipt each time he made a donation. Again, this is a mandatory condition;
[19]
These are requirements that were not met. All
these requirements are mandatory. It is not a matter of fault, liability, negligence,
good faith or bad faith. These are mandatory requirements of the Act and Regulations.
The appellant is therefore not entitled to a charitable donation tax credit
under subsection 118.1(2) of the Act and the appeal must be dismissed for
that reason alone.
Proof of donations
[20]
The onus is on the appellant to provide proof of
the donations he claims to have made to Revival. The applicable standard of
proof is the balance of probabilities. This means that the appellant must demonstrate
that it is more likely than not that he made the donations in question. The
only support for his position is his own testimony and the receipt issued by
Revival. This is not sufficient in the circumstances.
[21]
The appellant submits that he made the donations
in cash and property totalling over $10,000 in value. However, he provided the Minister
with a receipt showing cash donations of only $3,800. Why did he not obtain one
or more receipts indicating the exact amount he donated? He admits that he did
not keep a record of the amounts he donated each week or each month. He said
that he made withdrawals from his bank account to provide for his family and to
make donations to Revival. He put the money in an envelope and gave it to the
church. At the end of the year, the church issued him a receipt showing the total
amount he donated. He stated that his wife worked and earned a significant
amount of income to allow the appellant to make such donations. However, the
bank statements he provided the Canada Revenue Agency (hereinafter the Agency) with show that his bank account was consistently
in overdraft. Although Mr. Bope said he had the means to make the donations,
the evidence showed that he owed money on his line of credit during the year in
issue.
[22]
Gary Huenemoeder is the Audit Team Leader at
the Agency’s Charities Directorate. He stated that Revival obtained its registration
number on July 1, 2006. The Agency audited Revival for 2006, 2007 and 2008. The
Agency requested Revival’s accounting books and records, but all the accounting
records were seized because Revival did not pay rent of $321. Revival provided
bank statements, receipts for donations and various bank drafts. Following a
review of said documents, Mr. Huenemoeder found that Revival had reported
income in excess of $830,000 for its first year of operation, which
seemed to be very high for a first year. According to the review of the bank
account statements, the organization allegedly deposited 1.8 million
dollars in the bank. Mr. Huenemoeder suspected that something was wrong. The
Agency therefore required the production of documents from banks that conducted
business with Revival. Upon reviewing those documents, the Agency discovered
that only $3,000 had been deposited in the banks. Thus, all of the documents that
were provided to the Agency by the organization were false. The Agency contacted
920 donors, requiring proof of payment of the donations, and they all
indicated that they had paid cash and not by cheque or by bank draft. It is
unlikely that all these donors paid their donations in cash. An investigation
was conducted in respect of Daniel Mokwe, Revival’s pastor, but he fled Canada
before the Agency was able to lay criminal charges against him. Mr. Huenemoeder
found no evidence of charitable activities organized by Revival. Its registration
as a charitable organization was therefore revoked on January 8, 2011. Mr. Huenemoeder
reviewed the appellant’s file and found no evidence of the donations supposedly
made by the appellant.
Conclusion
[23]
The appellant was unable to confirm either the
exact amounts he donated to Revival or on which dates he made the donations. The
appellant failed to provide any cheque, any ATM withdrawal slip, any record of donations,
or any donation envelope related to the alleged donations. The Court cannot
therefore determine the exactly amount, if any, the appellant donated to Revival.
The receipt in issue is the only evidence of donations made and said receipt was
issued by an organization that was apparently defrauding the system. Aside from
the receipt, no document or account statement was adduced to support the appellant’s
claims. The appellant failed to provide any objective evidence to rebut the Minister’s
assumptions that he did not make the cash donations. Therefore, the appellant failed
to meet his burden of proof.
[24]
For these reasons, the appeal is dismissed.
Signed at Kingston, Ontario, this 12th day of May 2015.
“Rommel G. Masse”
Translation certified true
on this 18th day of June 2015
Daniela Guglietta, Translator
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