19 June 1990 Administrative Letter 74806 F - Artists Performing for Charities (Telethons)

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

SUBJECT: Artists Performing for Charities Paragraph 153(1)(g) of the Act

This is in reply to your memorandum dated March 15, 1990, wherein you requested our opinion on the applicability of paragraph 153(1)(g) of the Act and section 200 of the Regulations in the following situation.

Certain registered charities that are involved in raising funds through telethons have not provided performing artists with the required T4-A slip showing the income earned for performing in the telethon.  The performing artists are often paid by the charities but customarily choose to return the payment to the charity as a receipted donation.  The charities do not issue the required T4-A slip to the artists thereby enabling some artists to claim a charitable tax credit with no corresponding income inclusion for the same amount.

You have requested our opinion as to whether a fee paid to a third party for services rendered requires the payor to withhold tax pursuant to paragraph 153(1)(g) of the Act or to make an information return in respect of such payment pursuant to section 200 of the Regulations.

It is our opinion that every person who makes a payment described in subsection 153(1)(g) of the Act must withhold and remit an amount as determined in accordance with the Regulations.  In addition, subsection 200(1) of the Regulations also requires every person who makes a payment described in subsection 153(1) of the Act to make an information return in prescribed form; in the above instance a T4-A supplementary.

Where there is no employer-employee relationship between the payor and the recipient, the Regulations do not require the withholding of tax on amounts paid.  It is the Department's administrative practice to only require the reporting of such amounts on T4-A supplementaries where the remuneration is more than $500 or the remuneration had tax deducted at the source (see page 18 of the 1989 Employer's and Trustee's Guide).

Where a charitable organization makes a payment to a performing artist for services rendered in a self-employed capacity, the charitable organization is not required to withhold and remit an amount on account of tax but is required to make an information return in prescribed form. 

Concerning your suggestion to amend Interpretation Bulletin IT-110R2, we have written to Publications Division recommending that they revise the Bulletin accordingly.

B.W. DathDirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch