Promised Land Ministries – Tax Court of Canada finds that charity’s failure to generate receipts for Christian mission work in “cash economies” justified a one-year suspension

After poor record-keeping was identified on audit, a registered charity (PLM) entered into a compliance agreement with CRA. In a follow-up desk audit of a subsequent PLM taxation year, CRA asked for receipts to support expenses shown for missions to Africa and Europe (mostly, Poland, the pastor’s country of origin). After no receipts were provided (but with protestations that with improved accounting help such deficiencies would no longer occur), CRA determined to suspend PLM’s receipting privileges and qualified donee status for one year pursuant to s. 188.2(2)(a). At the Notice of Objection stage, PLM provided some documentary support for about half of the mission expenditures.

In rejecting PLM’s submission that a one-year suspension was too harsh a consequence in the circumstances, Lyons J indicated that difficulties in securing receipts in “cash economies” did not justify the failures, and stated:

[T]he breach justifies the lesser sanction of the Suspension especially since there has been repeated non‑compliance involving receipts for expense amounts for activities outside Canada, it could only account for half of such expenses and the production of documentation and such receipts were not timely and the fact remains that PLM has still not produced all such receipts … .

Neal Armstrong. Summary of Promised Land Ministries v. The Queen, 2019 TCC 145 under s. 188.2(2)(a).