BETWEEN:
NANA AMPOMAH,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
ORAL REASONS FOR JUDGMENT
(Delivered orally from the bench on
June 18, 2014, in Ottawa, Ontario.)
Bocock J.
I.
Introduction
[1]
The Appellant, Nana Ampomah, appeals the 2006
reassessment of the Minister which disallowed a charitable donation tax credit.
In her reply, the Minister asserts that the charitable donation receipt
reflecting the charitable donations is not compliant with section 3501 of the Income
Tax Regulation Act (the Regulation”) as required by section
118.1 of the Income Tax Act (the “Act”). Further the Minister
asserts by assumption that the cash charitable donations, in the amount of
$18,200 and as reflected within the charitable donation receipt of the Jesus Healing Center, were never made by the Appellant.
[2]
The Respondent’s viva voce evidence and
submissions were heard by the Court on a common basis with the evidence and
submissions provided in the matters of Pauline McCalla and Howard McCalla,
being Court dockets 2013-1753(IT)I and 2013-1757(IT)I repetitively. Separate
reasons for judgment have been prepared and issued in respect of those appeals.
II.
Facts
[3]
Ms. Ampomah testified on her own behalf. In her
testimony she indicated that she attended the Jesus Healing Center’s Sunday worship service twice a month commencing on New Year’s Eve of 2005. During
2006, she would attend on Sundays usually for 3 hours of services when she was
not scheduled to work that day. Ms. Ampomah does not recall a second floor to
the building in which the Jesus Healing Center was domiciled. This became a
contentious point with respect to testimony offered by the Respondent’s witness.
She would deposit her twice monthly donations in an envelope provided which had
the church’s name printed on it and a blank space for a donor to write his or
her name. She would donate whatever cash she had on hand, usually around $100,
with family members also given money by her to donate. She could not recall what
other churches to which she donated, before or after the 2006 period.
[4]
Ms. Ampomah also produced bank statements which
indicated that she had withdrawn as cash from her bank the sum of $19,020 over
the course of the 2006 calendar year. Each entry was identified as an “ABM
withdrawal” on the statements. Ms. Ampomah said the withdrawals were not for
everyday use, but restricted exclusively to the cash donation for the Jesus Healing Center.
[5]
In 2006, Ms. Ampomah earned a net income of
$88,713. The sum of $18,200 would have represented 21 percent of her net income
in that year as a charitable donation. During that year, she bore other
financial obligations as well: she was married and had two children, ages 2 and
1 at the time.
[6]
The donation receipt contained certain
deficiencies:
a) the charity’s name was spelled incorrectly: namely “Center”
as apposed to Centre (its official name registered with the Minister);
b) the date of issuance for the receipt was missing;
c) the locality or place of issuance for the receipt was missing; and
d) lastly, there was no statement that the receipt was “an official
receipt for Income Tax Act purposes”.
[7]
In addition to the testimony of Ms. Amponah, the
evidence of one Mr. Huenemoeder, CRA Team Leader-Charities Audit, indicated
that the Jesus Healing Center had failed to keep any meaningful books and
records, issued 3 million dollars in donation receipts in just over 2 years,
but only deposited some $18,000 into its bank accounts during the same period.
The pastors of the Jesus Healing Center, during an interview with the Team
Leader-Charities Audit, admitted that no sum ever approaching the 3 million
dollars was received by the Jesus Healing Center and that charitable donation
receipts were fabricated. Although some donations were received, the amounts
were a small fraction (less than 7%) of the amounts receipted. No donation
envelopes, receipt records or other evidence of any donations were ever
produced or revealed during the CRA Audit. None of the 400 purported donors
could provide collaborative or supporting proof of the donations.
III.
Appellant’s Submissions
[8]
The Appellant’s submission were as follows:
a) Ms. Ampomah indicated she donated all of the money in good faith;
b) she indicated that once the money was donated she had no idea what
was done with the money or why insufficient records were kept by the Jesus Healing Center; and lastly,
c) she indicated that her bank statements reflected withdrawals of the
money which she gave as charitable donations and that should be sufficient
evidence for the Court.
IV. The Law Generally
[9]
The Court will first deal with the Appellant’s
assertion that she simply donated the money, received the receipt, had no
further knowledge and should not be punished for her good faith and trust in a
system she did not author or control.
[10]
Statutorily the Income Tax Act (“Act”)
provide as follows:
Section 118.1(2)(a)
of the Income Tax Act (the “Act”) reads:
118.1(2) A gift
shall not be included in the total charitable gifts, total Crown gifts, total
cultural gifts or total ecological gifts of an individual unless the making of
the gift is proven by filing with the Minister
(a) a receipt for
the gift that contains prescribed information;
[…]
[11]
In turn, in subsection 3501(1) of the Income
Tax Regulation Act (the “Regulation”) sets out the requirements
for the charitable donation receipt the applicable sections relevant to these
appeals are as follows:
3501(1) 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;
[…]
(d) the place or
locality where the receipt was issued;
(e) […]
(f) the day on which
the receipt was issued where that day differs from the day referred to in
paragraph (e) or (e.1);
(g) the name and
address of the donor including, in the case of an individual, his first name
and initial;
[…]
[12]
Numerous decisions of this Court have held
unequivocally that deficiencies relating to the requisite information detailed
above render the donation receipt invalid under subsection 118.1(2) and under
the Regulation which state that the information must appear in the
donation receipt. A recent decision of this Court, Sowah v Canada, 2013 TCC 297, reflects this where C. Miller, J. states:
[16] […]
Case law is clear
that these requirements are mandatory and are to be strictly adhered to (see
for example the cases for Afovia v. The Queen, Sklowdowski v The Queen, Plante
v Canada).
[17] […] 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,[4] 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.
[13]
To be clear, it is not a matter of fault,
responsibility, good faith or control. It is a mandatory requirement of the Act
and the Regulation. There are other mandatory requirements with the Act,
some people feel perhaps too many, but this is certainly one which, in this
case, has not been met. For this clear and obvious breach of this mandatory
requirement, this appeal must be dismissed.
[14]
Although unnecessary, given the Court’s dismissal
on the basis of the donation receipt’s many deficiencies, I will now turn to
the issue of the evidence before this Court related to the cash donations
having been given to the Jesus Healing Center. Legally, in light of the
Minister’s assumption, the Appellant is required to provide evidence on the
balance of probabilities, that is more likely than not, that she gave the
money.
[15]
Although the cash withdrawals on the bank
statements reflect a passing similarity in aggregate to the amount of the
charitable donations, the similarities end there: there is no correspondence in
time to Sunday worship attendance, the amounts do not fall evenly with twice
monthly attendance and such withdrawals would not account for Ms. Ampomah’s own
expenditure of cash, aside from a mere $800, for the entire year. Additionally,
the donations constitute a staggering 21 percent relative to net income, yet
there is no evidence connecting the withdrawals to the charity; part time
attendance at Jesus Healing Center resulted in purported donations of $18,200
and yet there is no recollection or donation receipts for churches regularly
attended before and after Jesus Healing Center; and lastly, the charitable tax
receipts for $18,200 was purportedly picked up sometime in the spring of 2007 at
Jesus Healing Center by a friend of the Appellant, whose name she can not now
recall.
[16]
Moreover, the following evidence offered in
reply by the CRA Team Leader-Charities Audit has not been contradicted:
a) not one of the 400 members of the Jesus Healing Center who purported to give these large donations to the Jesus Healing Center has ever
produced a cheque, an ABM withdrawal slip, donation log or donation envelope
relevant to the donations to the CRA;
b) the amounts of the donations are very large, although oddly
symmetrical as to amounts given each week and yet largely asymmetrical as to a
logical and convenient amount someone would likely give by cash each week; and
c) the pastor, or former pastor, admitted to CRA auditors the donation
receipts were, at best, widely exaggerated and, at worst, bogus.
[17]
On balance, the evidence of en bloc, untraceable
and erratically recurring cash withdrawals, lacking any donation log, recipient
information or a prototype of the cash donation envelope are simply not
sufficient to establish more likely than not that the donations were actually made
in such magnitude without some other objective evidence of their existence.
[18]
A similar insertion of cash withdrawals in the
case of Afovia v Canada, 2012 TCC 391 was dealt by Paris J. of this
Court in his analysis of similar factual evidence:
[53} Mr. Bope insisted in his argument that he had the means to make
the donations and that the bank records were proof that he had made them;
[54] In my view, the bank records filed by Mr. Bope are inconclusive as
to whether any amounts were withdrawn to fund donations to PDGI. There are no
regular, consistent withdrawals that one might expect if, as Mr. Bope
testified, he made cash donations almost every week. Instead, the withdrawals
are sporadic, and vary in amount from $20 to $1,200.
[55] Furthermore, Mr. Bope gave no reason for making donations in cash,
and did not appear to have kept track of them himself. No particulars in dates
and amounts of donations were given. As I indicated in the case of the Afovias,
I would have expected there to be more attention paid to recording these
donations on an ongoing basis given the relatively large sums involved.
[56] I also draw a negative inference from the failure of Mr. Bope to
call his sister and his spouse to confirm his attention at the church or to
confirm that they saw him make any donations.
[57] Finally, there was no evidence that Mr. Bope made gifts or
donations to any other charity since his arrival in Canada in 2000.
[19]
The present case is quite similar. There is no
sense to the notion that a married person with 2 children, paying a mortgage,
making the Appellant’s salary donated $18,200 in cash in one year to a church she
attended with her family, but would call no witnesses to verify the donations
and have so little regard to documenting the specific amounts, the dates and
the record keeping for such sums.
[20]
While some nominal donations may have been made,
on the basis of the evidence and the balance of probabilities on which the
matter must be decided, there is no plausible reason to conclude that any amount
coming close to $18,200 was given in 2006 by the Appellant to Jesus Healing
Center.
[21]
For these reasons, the appeal is dismissed.
Signed at Ottawa, Ontario, this 9th day
of July 2014.
“R.S. Bocock”
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