Regulation 3501 - Contents of Receipts

Cases

Canada v. Castro, 2015 DTC 5113 [at 6266], 2015 FCA 225, rev'g sub nom. David v. The Queen, 2014 DTC 1111 [at 3236], 2014 TCC 117

inflated charitable receipt was invalid

The taxpayers received charitable receipts for 10 times the amount of contributions, paid in cash, made by them to a registered charity. Woods J had allowed charitable credits for the amount of the cash donations made (see summary sub nom David).

After finding that the inflated receipt was not - in itself - a benefit that would vitiate a gift (see summary under s. 118.1(1) - total charitable gifts), Scott JA allowed the Minister's appeal on the basis that the receipts did not comply with Reg. 3501(1)(h) as they did not show the amount of the cash gifts and that Reg. 3501(6)(b) applied, which deems a receipt to be spoiled if it incorrectly records the amount of the cash gifts.

Jurisprudence (e.g. Mitchell) that "allowed for some flexibility on the basis that all the information was, in any event, readily available to the Minister" (para. 76) was not applicable, as such information was not so available here and Reg. 3501(6) unambiguously and specifically requires that a receipt accurately record the cash donation (paras. 78-80).

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts inflated charitable receipt not a "benefit" vitiating a gift (donative intent issue not properly raised) 175
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(2) inflated charitable receipt was invalid 193
Tax Topics - Income Tax Act - Section 248 - Subsection 248(32) inflated charitable receipt not an "advantage" 124
Tax Topics - Statutory Interpretation - Interpretation Act - Section 16 Regs read in context of enabling legislation 82
Tax Topics - Statutory Interpretation - Interpretation Act - Section 32 inflated charitable receipt not an "advantage" 124

See Also

Guobadia v. The Queen, 2016 TCC 182 (Informal Procedure)

receipts invalid for showing inflated amounts

The taxpayer was disallowed her claims for several charitable donations for the 2007 and 2008 taxation years for which she may have actually given approximately 10% of the purported cash donation amounts. The registration of two of the charities had since been revoked for issuing inflated receipts.

Smith J found that the receipts were invalid, stating (at paras 31, 32 and 45):

… [A] receipt is a written document delivered in exchange for the receipt of money, goods or services, reflecting the actual amount of money or the fair market value of the property or services received.

It follows that a document, though it bears the title “receipt” or “charitable receipt” …, may not be treated or accepted as such if it does not accurately reflect the money paid or the fair market value of the property or services actually provided in exchange.

… [A]lthough the donation receipts in question are described as “official receipts” …, they are not in fact receipts as that term is ordinarily understood.

Smith J went on to find that the “receipts” in any event did not satisfy the requirements of Reg. 3501, finding that the receipt from one charity was “deficient since the name of the issuer is incomplete, it does not contain the location where it was issued, it does not show the Appellant’s address or the date of issue and finally, it does not indicate that that the amount was received in cash.” (para 47) “The receipt issued by [the second charity] is equally deficient in that it does not indicate the proper registered name of the charity or the date of issue nor the location where it was issued.” (para 48) “The receipt issued by [the third charity]… clearly indicates that the Appellant made a cash donation… when her evidence was that she made the bulk of the donation by cheque. … In any event, …it was an inflated donation receipt and on that basis, …invalid.” (para 49)

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(2) inflated cash receipt not a “receipt” 191

Shahbazi v. The Queen, 2016 TCC 129 (Informal Procedure)

property description mandatory

In denying charitable credits for large donations of household goods, where the tax receipts did not contain any description of the donated property, Woods J stated (at para. 19):

Even if some flexibility in interpreting the necessary requirements is appropriate, it is not possible in my view to completely overlook the requirement that a tax receipt for a donation of non-cash property must contain a brief description of the property donated.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(2) description of property mandatory 127

Ofori-Darko v. The Queen, 2014 DTC 1074, 2014 TCC 54 (Informal Procedure)

FMV and date missing for receipts for in kind gifts

Receipts which did not show when gifts in kind were received by the registered charity (a church) or their fair market value at that time, and which did not provide a breakdown between cash and in-kind gifts, were rejected.

Administrative Policy

IT-110R2 "Deductible Gifts and Official Donation Receipts"

Subsection 3501(1)

Paragraph 3501(1)(h)

See Also

Murji v. The Queen, 2018 TCC 7 (Informal Procedure)

the cash portion of a donation made to a charity was reduced by the fees paid by it to the tax shelter promoter

Taxpayers participated in a purported gifting tax shelter in which, in addition to making cash donations to participating charities, they were to receive a donation of shares from a non-resident philanthropist (later discovered to be fictitious) and then donated those shares (which the evidence indicated were worthless but which were treated by the promoter as having a value of up to 12 times that of the cash donation) to the charity. Typically, 90% of their cash donations were paid by the charities to the promoter as fees. Under pressure from CRA, the charities issued revised charitable receipts which showed only the net cash actually retained by the charities as the donation amounts (i.e., the receipt amounts were reduced by almost 99%), and CRA assessed to only allow the revised receipt amounts for charitable credit purposes.

Favreau J affirmed that the cash donation amount of the taxpayer was only the net amount (e.g., in the case of Mr. Murji, $1,800 rather than $18,000) on the basis that after Mr. Murji deposited $18,000 with the promoter (“as consideration for participating in the gifting arrangement”), the promoter then “transferred only $1,800 to On Guard [the charity] by depositing $18,000 in On Guard’s bank account and invoicing On Guard for $16,200” (para. 56).

On this basis, the original charitable receipts did not satisfy the requirement of Reg. 3501(1)(h)(i) that a receipt specify the amount of the cash donation.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts no intent to impoverish 230
Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(1) - Tax Shelter charitable gifting arrangements with high promised credits was a tax shelter 180