REASONS
FOR JUDGMENT
Favreau J.
[1]
This is an appeal under the informal procedure
from a reassessment made by the Minister of National Revenue (the “Minister”) under the Income Tax Act, R.S.C.
1985 c. 1 (5th Supp.), as amended (the “Act”),
dated July 17, 2006 concerning the 2005 taxation year of the appellant.
[2]
The issue is whether the appellant is entitled
to a federal non-refundable tax credit in respect of charitable donations he allegedly
made in the amounts of $10,200 and $21 during the 2005 taxation year to the
Christ Apostolic Church International Miracle Centre (“Miracle”)
and to the Ontario Khalsa Darbar (“Khalsa”)
respectively.
[3]
In determining the appellant’s tax liability for
the 2005 taxation year, the Minister made the following assumptions of fact:
(a) the Appellant did not make any donations, either by cash or cheque
or gifts in kind, to any registered charity, during the 2005 taxation year;
(b) in particular, the Appellant did not voluntarily transfer any
property that he owned to Miracle in the 2005 taxation year;
(c) in particular, the Appellant did not voluntarily transfer any
property that he owned to Khalsa in the 2005 taxation year;
(d) the Appellant did not obtain or provide proof of any transfers of
property that he may have made to a registered charity in 2005 in the form of a
valid official and non-deficient donation receipt meeting all required
criteria;
(e) specifically, the purported Miracle receipt does not contain:
(i) the place or locality where it was issued;
(ii) the Appellant’s full address;
(iii) a statement that it is an official receipt for income tax
purposes; and
(iv) the specific dates that alleged cash payments were made;
(f) specifically, the purported Khalsa receipt does not contain:
(i)
the Appellant’s full address; and
(ii)
a valid charitable registration number;
(g) Miracle’s registered charitable donation number was revoked for
cause on October 13, 2007.
Other Material Facts
[4]
The Deputy Attorney General relies on the
following additional facts:
(a) the purported Miracle receipt does not contain the name and internet
website address of the CRA;
(b) the purported Khalsa receipt does not contain:
(i) the proper first and last name of the Appellant;
(ii) a statement that it is an official receipt for income
tax purposes;
(iii) the name and internet website address of the CRA; and
(iv) whether the date shown thereon is the date of the gift
and/or the date of issuance of the receipt.
[5]
The appellant, a postal worker, testified in
chief that he made cash donations at various times during 2005 to Miracle. The
donations were mainly made on Sundays at the worship services of the church.
During his testimony, the appellant did not provide any detail regarding his
donations but he said that he was giving $100 or $200 each time to help
children in Africa and India.
[6]
The appellant stated that he is married and has
three children for whom he was paying school fees. He also said that his family
was living in Mississauga in a house bought in 1992 for $250,000 and that he was
carrying a mortgage on the house. Two other dependants and two grand-parents
were also living with him and his family.
[7]
The appellant further stated that his earnings
for 2005 were between $50,000 and $55,000 and that he had a line of credit of $
70,000 with the Toronto-Dominion Bank that was used to pay the school fees.
[8]
The appellant also stated that his wife worked
on a part-time basis at a post-office in 2005 and that her net earnings for
that year were $36,296.87.
[9]
The appellant also confirmed that he is not
contesting the refusal of the $21 donation allgedly made to Khalsa.
[10]
During the cross-examination of the appellant,
the following documents were filed as evidence:
-
the appellant’s 2005 tax return with his T4
statement of remuneration for the 2005 taxation year and the receipts issued by
Miracle and Khalsa;
-
the appellant’s letter dated September 30, 2006,
addressed to the Chief of Appeals of the Sudbury office with his notice of
objection to the reassessment of his 2005 income tax return with a letter from
his church giving further details as to the breakdown of his donation for 2005
and with some copies of his bank statements to authenticate the cash donations;
and
-
an extract of the Canada Gazette Part 1 dated
October 13, 2007 announcing the revocation of the charitable registration of
the Christ Apostolic Church International Miracle Centre (Vineyard of Comfort),
North York, Ontario.
[11]
The relevant statutory provisions of the Income
Tax Act are as follows:
118.1(2) Proof
of gift – An eligible amount
of a gift shall not be included in the total charitable gifts, total Crown
gifts, total cultural gifts or total ecological gifts of an individual unless
the making of the gift is evidenced by filing with the Minister
(a) a receipt for the gift that contains prescribed information;
(b) in the case of a gift described in the definition
“total cultural gifts” in subsection (1), the certificate issued under
subsection 33(1) of the Cultural Property Export and Import Act; and
(c) in the case of a gift described in the definition
“total ecological gifts” in subsection (1), both certificates referred to in
that definition.
[12]
The relevant provisions of the Income Tax
Regulations (the “Regulations”) are as follows:
3501. Contents of
Receipts – (1) Every official receipt issued by a registered
organization shall contain a statement that it is an official receipt for income tax purposes, and shall
show clearly, in such a manner that it cannot readily be altered,
(a) the name
and address in Canada of the organization as recorded with the Minister;
(b) the
registration number assigned by the Minister to the organization;
(c) the
serial number of the receipt;
(d) the place
or locality where the receipt is issued;
(e) where the
gift is a cash gift, the date on which or the year during which the gift was
received;
(e.1) where
the gift is of property other than cash
(i) the date on which the gift
was received;
(ii) a brief description of the
property, and
(iii) the name and address of
the appraiser of the property if an appraisal is done;
(f) the date on which the receipt was issued;
(g) the name
and address of the donor including, in the case of an individual, the
individual’s first name and initial;
(h) the
amount that is
(i) the amount of a cash gift, or
(ii) if the gift is of property
other than cash, the amount that is the fair market value of the property at
the time that the gift is made;
(h.1) a description of the advantage, if any, in respect of
the gift and the amount of that advantage;
(h.2) the
eligible amount of the gift;
(i) the
signature, as provided in subsection (2) or (3), of a responsible individual
who has been authorized by the organization to acknowledge gifts; and
(j) the name
and Internet website of the Canada Revenue Agency.
Analysis
[13]
I have concluded that the receipts provided by
the appellant do not contain all the information required by the Regulations,
and, for this reason alone, the appeal must be dismissed. I have also concluded
that, even if the receipts conformed to the Regulations, the appellant
failed to prove, on a balance of probabilities, that he made the donations at
issue.
[14]
The receipt from Miracle that was attached to
his 2005 tax return was filed as evidence in Court. The alleged Miracle receipt
did not conform to the Regulations in that it did not contain the
prescribed following information:
(i) the place or locality where it was issued (paragraph
3501(1)(d);
(ii) the full address of the appellant (paragraph 3501(1)(g);
(iii)
a statement that it is an official receipt for
income tax purposes (subsection 3501(1));
(iv)
the specific dates on which the alleged cash
payments were made (paragraph 3501(1)(e); and
(v)
the name and the Internet website address of the
Canada Revenue Agency (paragraph 3501(1)(j);
[15]
Since the receipt provided to the appellant by
Miracle did not contain all the required information, it did not meet the
requirements of subsection 118.1(2) of the Income Tax Act, and for
this reason, the appellant’s claim for charitable gift credit cannot be
allowed.
[16]
The onus is on the appellant to prove that he
made the alleged donations to Miracle. The standard of proof to be applied is
on a balance of probabilities. This means that he must show that it is more
probable than not that he made the donations at issue. In my view, the
appellant did not meet this standard of proof.
[17]
The evidence submitted by the appellant that he
had made the donations at issue was his testimony, the incomplete receipt, the
letter dated September 25, 2006 from Miracle providing a detailed breakdown of
how the donations were made in 2005 and the CIBC bankbook history of the
appellant’s bank account for 2005. No information concerning the TD bank line
of credit was provided.
[18]
The evidence presented by the appellant fell
short of showing that he made the alleged donations to Miracle. His testimony
was vague and unreliable. It is as if he had no connection with the charitable
organization. He did not know from where the organization operated or how the
money given, was spent for charitable purposes except in very general terms. He
stated that he was introduced to Miracle by a person who was renting a basement
in the neighbourhood in 2004 while he was suffering from depression. The name
of that person was not disclosed nor was called as a witness to corroborate the
evidence.
[19]
The appellant’s testimony was particularly
deficient because he could not remember the exact amounts given on specific
dates and the nature of the church’s programs towards which his cash donations
were applied.
[20]
The letter dated September 25, 2006 from Miracle
provided a detailed breakdown on how the donations were made by the appellant
in 2005. The programs that were financed by the appellant were as follows:
|
Programs
|
Amounts
$
|
Number of days on which contributions
were made
|
Average contribution per day
$
|
|
-
tithes
-
offering
-
building funds
-
special donations
|
3,730.00
1,270.00
5,000.00
200.00
|
17
44
20
2
|
219.41
28.86
250.00
100.00
|
|
Total
|
10,200.00
|
|
|
[21]
The information provided by the above-mentioned
letter cannot be relied upon for two reasons:
(a) the charity number appearing on the letterhead of Miracle is
different from the charity number appearing on the receipt issued to the
appellant; and
(b) the financial secretary of Miracle who signed the letter was not
called as a witness to explain how the information was gathered and why the
charity numbers of the organization appearing on the documents were different.
[22]
The banking documents submitted by the appellant
are not useful because no reconciliation can be made between the amounts
withdrawn from his bank account and the cash donations he made.
[23]
In analyzing the appellant’s ability to make the
alleged cash donations, I am led to believe that the amounts are substantial in
comparison to his after-tax disposable income for the 2005 taxation year. The
cash donations of $10,200 represented more than 25% of his after-tax disposable
income for that year.
[24]
The appellant also failed to establish that he
received financial support from other family members living with him or that he
made withdrawals on his TD line of credit to make the alleged cash donations.
[25]
For all the above reasons, I find that the
appellant has failed to prove, on a balance of probabilities, that he made the
donations at issue.
[26]
The appeal is dismissed.
Signed at Ottawa,
Canada, this 6th day of October 2016.
“Réal Favreau”
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