Questions and answers about revocation of registration

1. What recourse does a charity have if it has received a notice that the CRA intends to revoke its registration?
2. How does a charity that was revoked for not filing its annual information return re-register?
3. Will a revoked organization automatically have its charitable status reinstated if it applies for re-registration?
4. Does the $500 penalty apply to all revoked charities that apply for re-registration?
5. Is the $500 penalty refundable if a revoked charity applies but does not get re-registered?
6. Does a revoked charity have to pay revocation tax if it plans to apply for re-registration?
7. When does a revoked charity have to pay the revocation tax?
8. Can a revoked charity transfer its assets to a non-profit organization?
9. What is an "eligible donee"?
10. How does a revoked charity know if another registered charity is also an eligible donee?
11. What happens if a revoked charity does not file the tax return that is due after it is revoked?
12. Will an organization that is no longer a registered charity qualify as a tax-exempt non-profit organization?
13. Are there GST/HST implications for an organization whose charitable status has been revoked?

1. What recourse does a charity have if it has received a notice that the CRA intends to revoke its registration?

   The specific recourse available to a charity depends on whether it was revoked for failure to file its information return, revoked as a result of an audit or revoked for other reasons. In all cases, a charity has the right to file an objection for an independent review of the decision. If the later review is still unfavourable, a charity can either appeal to the Tax Court of Canada or to the Federal Court of Appeal, depending on the grounds of the revocation.

2. How does a charity that was revoked for not filing its annual information return re-register?

   For information on applying for re-registration, see How to apply for re-registration. However, the charity should set procedures in place to ensure its future returns are filed on time.

3. Will a revoked organization automatically have its charitable status reinstated if it applies for re-registration?

   No. Re-registration will only be granted if the organization meets all the current registration requirements. It may be, for instance, that the organization has changed its corporate objects since its prior registration, but has not advised the CRA. Applications for re-registration must go through the complete review process, which includes a full review of the objects/purposes and activities of the organization. Statute law, common law, and administrative policies change over time. Therefore, an organization that qualified for registration several years ago may not qualify today.

4. Does the $500 penalty apply to all revoked charities that apply for re-registration?

   No. The $500 penalty applies to charities that have not filed their Form T3010, Registered Charity Information Return on time. If this is the case, a revoked charity will not be re-registered unless it pays the penalty.

5. Is the $500 penalty refundable if a revoked charity applies but does not get re-registered?

   No. Since the penalty relates to failing to file a return on time, the $500 is non-refundable.

6. Does a revoked charity have to pay revocation tax if it plans to apply for re-registration?

   A revoked charity will have to pay revocation tax unless it meets all the following conditions:

   • it applies for and is re-registered within one year from the date it was sent the notice of intention to revoke its registration;
   • it has paid all taxes, penalties, and interest that it is liable for under the Income Tax Act or the Excise Tax Act before the date of re-registration; and
   • it has filed all its missing information returns (Form T3010s) and financial statements before the date of re-registration.
7. When does a revoked charity have to pay the revocation tax?

   The revocation tax is due no later than one year from the date of the notice of intention to revoke. For more information, see Revocation tax and the T2046 return.

8. Can a revoked charity transfer its assets to a non-profit organization?

   No. A revoked charity may only transfer its remaining assets to an eligible donee.

9. What is an "eligible donee"?

   An eligible donee is a registered charity that must:

   • have more than half its directors/trustees deal at arm's length with each of the directors/trustees of the revoked charity; and
   • have filed all its Form T3010, Registered Charity Information Returns.

   In addition, it must not:

   • be subject to a suspension of its tax receipting privileges;
   • have unpaid liabilities under the Income Tax Act or the Excise Tax Act; or
   • be the subject of a certificate under the Charities Registration (Security Information) Act.

   Note
   A qualified donee may not meet the criteria to be considered as an eligible donee.

10. How does a revoked charity know if another registered charity is also an eligible donee?

    A revoked charity may not be familiar enough with the internal affairs of the charity to which it plans to transfer property to be able to certify that the charity is an eligible donee. For this reason, the recipient charity is asked to formally confirm its own eligibility.

    A revoked charity should ask the charity it proposes to transfer its remaining assets to, if it meets the requirements of an eligible donee. If the revoked charity receives assurance that the requirements are met, it should have an authorized individual of the recipient charity sign a completed copy of Schedule 5 – Transfer of property to an eligible donee (included in the T2046 tax return) once the transfer is complete. The revoked charity includes the Schedule 5 when it files the T2046 tax return.

11. What happens if a revoked charity does not file the tax return that is due after it is revoked?

    A revoked charity must file Form T2046, Tax Return Where Registration of a Charity is Revoked within one year from the date of the notice of intention to revoke. If the return is not filed, the CRA will calculate the revocation tax and issue the revoked charity a notice of assessment.

12. Will an organization that is no longer a registered charity qualify as a tax-exempt non-profit organization?

    Not necessarily. IT-496R, Non-Profit Organizations sets out the conditions that an organization must meet to qualify as a tax-exempt non-profit organization.

    It is important to note that, whether or not the organization qualifies as a non-profit organization, a revoked charity is still responsible for the revocation tax. Additionally, even if an organization does qualify as a tax-exempt non-profit organization, it still has lost the authority to issue official donation receipts. Go to What is the difference between a registered charity and a non-profit organization? for more information.

13. Are there GST/HST implications for an organization whose charitable status has been revoked?
    Yes. An organization whose charitable status has been revoked will no longer be a charity or public institution for GST/HST purposes which could affect the tax status of its supplies, the way it calculates its net tax, and its ability to claim a partial rebate for the GST/HST it pays.

Date modified:

2016-01-25