Docket: 2013-3652(IT)I
BETWEEN:
STEPHEN OFORI-DARKO,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal
heard in common evidence with the appeal of
Doris Ofori-Darko 2013-3809(IT)I on January 29, 2014,
at Toronto, Ontario
Before: The Honourable
Justice B. Paris
Appearances:
|
For the Appellant:
|
The
Appellant himself
|
|
Counsel for the Respondent:
|
Marcel Prevost
|
____________________________________________________________________
JUDGMENT
The appeals from the reassessments made pursuant to the Income Tax
Act for the 2006, 2007 and 2008 taxation years are dismissed in accordance
with the attached reasons for judgment.
Signed at Ottawa, Canada, this 17th day of February 2014.
“B.Paris”
Docket: 2013-3809(IT)I
BETWEEN:
DORIS OFORI-DARKO,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on common evidence with the
appeal of
Stephen Ofori-Darko 2013-3652(IT)I on January 29, 2014,
at Toronto, Ontario
Before: The Honourable Justice B. Paris
Appearances:
|
For the
Appellant:
|
The Appellant herself
|
|
Counsel for the
Respondent:
|
Marcel Prevost
|
____________________________________________________________________
JUDGMENT
The appeals from the reassessments made pursuant to the Income Tax
Act for the 2006, 2007 and 2008 taxation years are dismissed in accordance
with the attached reasons for judgment.
Signed at Ottawa, Canada, this 17th day of February 2014.
“B.Paris”
Citation: 2014 TCC 54
Date: 20140217
Docket: 2013-3652(IT)I
2013-3809(IT)I
BETWEEN:
STEPHEN OFORI-DARKO
DORIS OFORI-DARKO,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Paris J.
[1]
The appellants are
appealing the disallowance of the tax credits for charitable donations they
claimed in their 2006, 2007 and 2008 taxation years. Mr. Ofori-Darko claimed
donations to the Redemption Faith Ministries/Church (“Redemption”) of $3645,
$4516, and $4102 for those years respectively. Ms. Ofori-Darko claimed
donations of $10,815, $10,195 and $10,648 to the same organization for those
years respectively. The appeals were heard on common evidence.
[2]
The Minister of
National Revenue (the “Minister”) disallowed the credits on the basis that
neither appellant made any donations to Redemption in any of those years and
also because the charitable donation receipts issued to them by Redemption did
not contain the information required by Regulation 3501 (ITR)
necessary to prove the gift. A receipt setting out the prescribed information
is necessary in order to claim a tax credit for a charitable donation,
according to paragraph 118.1(2)(a) of the Income Tax Act. (ITA)
[3]
Redemption was in the
years in issue a registered charity. It operated a house of worship in
Etobicoke and according to the appellant was engaged in charitable activities
in Canada as well as Ghana. Mr. Ofori-Darko was the founder and pastor of
Redemption, and was also a director. Ms. Ofori-Darko was an assistant pastor
and a director.
[4]
The charitable
registration of Redemption was revoked in 2010 because the Minister could not
confirm the charitable activities of Redemption. The Canada Revenue Agency
(“CRA”) officer who oversaw the audit testified there were serious concerns
relating to overstated charitable donation receipts issued by Redemption. In
2005, Redemption issued receipts for donations totalling over $121,000. Only
$4234 was deposited in Redemption’s bank account that year. In 2006, Redemption
issued receipts for over $677,000 of donations. Only $7876 was deposited into
its bank account that year. The appellants did not challenge the evidence of
the CRA officer on this point.
[5]
As a result of the
audit findings, the CRA reviewed tax credits claimed by individuals in respect
of donations to Redemption.
[6]
The appellants claim
that they donated cash to Redemption during their attendance at Redemption’s
weekly church service. They say they put their donations into envelopes marked
with their name and put the envelopes in the collection basket. Mr. Ofori-Darko
said that a member of the church, Ms. Prudence Crankson, in the presence of
another member, opened the envelopes and recorded the cash donations in one of
two books. The first was for tithes, which represented a portion of the donor’s
earnings, and the second was for contributions other than tithes. (Apparently
the nature of the donation would be marked on the envelope by the donor.)
[7]
Mr. Ofori-Darko said
after the amount was recorded in Redemption’s books, he would take it and
deposit it into Redemption’s bank account. He produced a copy of the entries in
the tithe record book for 2006, 2007 and 2008. According to those entries, he
gave tithes of $2047 in 2006, $2738 in 2007 and $2346 in 2008, and Ms.
Ofori-Darko gave tithes of $3550 in 2006, $4740 in 2007 and $5240 in 2008. Mr.
Ofori-Darko said the remainder of his donations consisted of gifts in kind to
Redemption, in the form of new and used clothing and shoes which Redemption
shipped to Ghana and distributed to needy individuals. Ms. Ofori-Darko also
said she made donations of the same nature, and gave food for church activities
and paid parking fees while making hospital visits. She also said she made
additional cash contributions beyond the tithes shown in the tithe record book.
No records of any of the gifts in kind, expenses or other cash donations were
produced.
[8]
On the first issue, I
find that the appellants have not proved on a balance of probabilities that
they made the donations claimed. There was no proof offered to corroborate
their testimony that they made gifts in kind to Redemption and their testimony
alone was too vague to identify any specific goods that were donated or the
value which could be attributed to such goods. Similarly, the existence of cash
gifts given by Ms. Ofori-Darko in excess of those shown in the tithes record
were not corroborated.
[9]
I am also unable to
accept that the amounts shown in the tithes records are reliable. The person
who allegedly made the entries in the tithes record was not called as a
witness, and there was no evidence that she was unavailable. I conclude that
she was not called because her evidence would not have assisted the appellants.
More importantly however, the appellants did not provide bank records for
Redemption to show that deposits at least equal to the tithes allegedly
collected were made into Redemption’s bank account.
[10]
According to Mr.
Ofori-Darko, he deposited all of the cash collected into that account. The
evidence that was presented does not, in fact, support his testimony in this
regard. For the 2006 year, the tithe record shows total donations of $12406
whereas the CRA officer stated that only $7876 was deposited into Redemption’s
bank account that year. The appellants’ failure to produce the bank records for
Redemption for the years in issue leads me to again draw an inference that
those records would not have supported their position. The appellants as
directors of Redemption, ought to have been in a position to produce such
records.
[11]
Having found that the
appellants have not shown that the donations they claimed were in fact made, it
is not strictly necessary for me to decide the second issue concerning the
donation receipts issued to the appellants by Redemption. However, it would be
helpful to consider the submissions made on the point.
[12]
I would note for the
record, that Ms. Ofori-Darko produced only one receipt, for 2006, but I am
prepared to accept the evidence of Mr. Ofori-Darko, who prepared the receipts,
that the others issued to Ms. Ofori-Darko would have been in the same form as
his own receipts for 2007 and 2008.
[13]
I agree with the
respondent’s counsel that those receipts do not contain all of the information
required by subsection 3501(1) of the ITR. In particular, they do not
provide a breakdown of the donation between cash and gift in kind nor do they
give a description of gifts in kind that were allegedly donated.
[14]
Furthermore the
receipts do not show when the gifts in kind were received by Redemption or what
their fair market value was at that time. Finally the receipts fail to show the
locality or place of issuance of the receipt. As I indicated in the case of Afovia
et al. v. The Queen,
the information listed in subsection 3501(1) of the ITR, the information
listed in subsection 3501(1) of the ITR is mandatory for charitable
donation receipts, and therefore the receipts in these appeals are insufficient
to prove the making of a gift as provided for in paragraph 118.1(2)(a)
of the ITA.
[15]
For all of these
reasons, the appeals are dismissed.
Signed at Ottawa, Canada, this 17th day of February
2014.
“B.Paris”
CITATION: 2014 TCC 54
COURT FILE NO.: 2013-3652(IT)I
STYLE OF CAUSE: STEPHEN OFORI-DARKO AND HER MAJESTY THE QUEEN
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: January 29, 2014
REASONS FOR JUDGMENT BY: The
Honourable Justice B. Paris
DATE OF JUDGMENT: February 17, 2014
APPEARANCES:
|
For the
Appellants:
|
The Appellant themselves
|
|
Counsel for the
Respondent:
|
Marcel Prevost
|
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent: William F. Pentney
Deputy
Attorney General of Canada
Ottawa,
Canada
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