Transcript

Hi. Welcome to the CRA's Non-compliance issues and how to avoid them webcast. This is a webcast that was originally aired in May of 2011. The webcast is no longer live. If you have any questions, we encourage you to call the 1-800-267-2384 Client Assistance telephone line and they'd be happy to answer any questions for you. Thank you very much and enjoy the webcast.

The first slide I would like to bring your attention to is our compliance approach. The compliance approach, first and foremost, it's the mandate of the Charities Directorate to enhance compliance with the provisions of the Income Tax Act Legislation administered by the Canada Revenue Agency. o encourage and assist charities to comply with the requirements of the legislation through a balanced program of education, service, and responsible enforcement.

First and foremost, what we try to do is to facilitate voluntary compliance. Second, we want to assist charities comply wherever and whenever possible; and third, we're trying to enforce compliance through penalties and sanctions, whenever necessary. So, that's the compliance approach.

Moving on to our next slide, the compliance tools that we have available. General approach, in keeping with the voluntary compliance approach that I mentioned, I can tell you that all the audits that were completed in the 2009-2010 fiscal period, the majority, that is 65%, resulted in either no change required, by the charity or minor non-compliance issues that were addressed through what we call education letters.

22% resulted in something that I call compliance agreements. This is a formal agreement signed between the CRA and the charity and this agreement outlines the non-compliance issues and remedial actions the charities agree to undertake in order to get themselves back on track.

Only 6% of the audits conducted for 2009-2010 fiscal period resulted in revocation. Where an audit reveals serious non-compliance, such as serious breaches of the core requirements of the Income Tax Act or the Criminal Code or a deliberate or repeat offense, it is likely to result in revocation. And then the remaining 7% are closed for other reasons like voluntary revocation or annulment.

Moving on, then, to our next slide, this is discovering non-compliance. The non-compliance is exposed primarily through audits, the audits that we conduct. However, the Charities Directorate works closely with other areas of the CRA, including the tax centers, where there are many receding issues that are often identified. We'll talk more about the receding issues later on in the presentation. Also, you'll note that the media sometimes exposes compliance issues. Sometimes they do this knowingly. Sometimes they do this unknowingly and the CRA is able to pick up on that. We also may receive leads from the public via our Charities Compliance Division electronic mailbox. This mailbox is available on our website. So, if you wanted to log in to our website, you can log in to the charities compliance electronic mailbox and you can identify concerns that you may have and send that in to us and we do take those matters seriously.

Moving to the next slide, continuing on with discovering non-compliance, we have here, as I mentioned, I take part in the Charities Information Sessions and also at those sessions and also our toll free client assistance line, sometimes reveals areas of confusion, or misapplication of the requirements of charities. So, this is another area that we see non-compliance and we try to address.

So, what I'm going to do in the presentation is over the next – throughout the presentation, the next slides, I'm going to go through many of the concerns or the most common concerns, or issues that we see as a result of non-compliance. These are not listed in order of severity or frequency, but these are the most common issues that we've seen throughout the sector.