Registered charities have certain obligations under the Income Tax Act. The Charities Directorate monitors the operations of registered charities to make sure they comply with these obligations.

We make sure that:

• only organizations that qualify as charities under the common law are registered
• the operations of registered charities fall within the limits of the Act
• registered charities issue official donation receipts appropriately
• revoked charities pay a revocation tax

Generally, we approach compliance through education first. We have a number of tools at our disposal:

• website
• outreach program
• client service program
• reminder letters
• audit program

Website

Our webpages on operating a registered charity, guidance products, and publications help registered charities follow the rules. For the latest information, sign up to our electronic mailing list or go to the What’s new webpage.

Outreach program

We produce educational videos and engage with the sector in a variety of ways (including social media and working groups) in order to help registered charities and other qualified donees voluntarily comply with the obligations of registration.

Client service program

Our client service representatives are available to answer questions over the phone or in writing.

Reminder letters

Reminder letters are an educational tool used outside of an audit when we have identified, through our monitoring activities, possible areas of non-compliance. The letters refer charities to available information in order to help them comply voluntarily with the requirements of registration.

Audit program

Audits help us maintain public confidence in the fairness and integrity of the registration system for charities and are a key part of the compliance program.

While generally we approach compliance through education first, the approach we take depends on the severity of the non-compliance.

If an audit raises concerns, we will use one or more of the following compliance measures:

1. Education letters guide charities through the steps they need to follow to be fully compliant.

2. Compliance agreements outline areas of non-compliance and commit charities to take corrective action.

3. Sanctions include financial penalties and temporary suspensions of charities’ tax-receipting privileges as well as their status as qualified donees.

4. Revocation is the loss of charitable registration and the privileges that go with it. It is used in serious cases of non-compliance with the Act.

For more information, go to The audit process for charities.