This letter is about the audit of the books and records of the Biosphere Conservatidin Foundation (the Organization) conducted by the Canada Revenue Agency (CRA). A preponderance of the Organization's efforts and resources is devoted to providing resources to the unskilled. The legislative intent conveyed by the phrase "carried on by the organization itself" in paragraph 149.1(1)(a) of the Act requires a charity to be actively engaged in its charitable activities.
The Organization demonstrated this by having and issuing tax receipts for donations on behalf of the agent. Under paragraph 168(1)(b) of the Act, the Minister can revoke the Organization's registration because it has not met the requirements of the Act. For this reason, it appears that there may be grounds for revoking the charitable status of the Organization.
As noted above, each principal-agent agreement also provided that the Organization could retain between 2.5% and 4.5% of the funds received from the agent. It is also our opinion that the Organization has not proved that it carries out its own charitable activities in accordance with the provisions of the law. In fact, it appears that the organization simply acts as a conduit that funds the various agents' programs.
For this reason, it appears to us that there may be grounds for revoking the charitable status of the Organization under paragraph 168(1)(b) of the Act.
Failure to Issue Donation Receipts in Accordance with the Act
These donors are directed to write a check to the Organization for the desired donation amount The Organization. In 2012, the Organization sent $183,828 to the same entity representing 115% of the funds raised for the non-qualified beneficiary in that year. It is our position that the Organization has issued receipts other than in accordance with the Act and its Regulations.
The organization was unable to provide all the SRS it issued during the audit period. Donations received by the organization did not match the amount reported on the T3010 Information Report, its financial statements or general ledger. In the audit period, the revenues for 2012 according to the table of the organization and. customizing the entries that were available for our review. did not reconcile the revenue amounts recorded on the T3010 Information Statement or in the financial statements.
According to information provided during the audit review, the organization has held minimal board meetings throughout the year. It is our position that the organization has failed to comply with and violated Section 230 of the Act. For this reason alone, there may be grounds to revoke the Organization's registered status.
It is the responsibility of the Organization to ensure that the information provided in its returns, schedules and statements is factual and complete in all respects. In response to question C3 of the 2013 form T3010, the organization indicated that it transferred funds to qualified beneficiaries. The organization recorded these gifts to qualified donors on line 4890, fair market value of all donated property used in charitable activities of the T3010 Information Return instead of line 5050.
On line C11 of Form T3010 for 2012, the organization indicated that it received gifts in kind for which a tax receipt was issued. However, the Organization did not enter an amount on line 580 representing the total amount of taxes on gifts in kind received. The statute of the organization states that there are at least three directors in the board of directors.
For this reason, there may be grounds for revoking the charitable status of the Organization. Directorate may give notice of its intention to revoke the registration of the Organization by issuing a notice of intention in the manner described in subsection 168(1) of the Act.
APPENDIX "A"
Biosphere Conservation Foundation Comments on Representations of June 14, 2016
However, no other evidence was provided that regular reports or updates were provided to the Organization. The Organization's representations questioned the graph on page 9 of the AFL, citing that the discrepancy between funds received and refunded was due to the fact that only one year's figures were used. The organization provided two excel tables during the audit which summarized the money received for 2012 and 2013.
Funding of public interest litigation is not a charitable activity nor is it an activity for which the organization was registered. The organization claimed to support an educational campaign in the same geographic location as the work, but it lacked the man. Although this statement may be true, as a registered charity the organization must demonstrate that it participated in the project and had control over its funds.
As set out in the AFL there are many components involved in making sure that there is proper direction and control of any agent acting on behalf of the Organisation. The Organization will review the agent's report and if satisfied, the Organization will reimburse any reasonable expenses. However, since the agreement with the Organization was only signed on 1 August 2013, it appears to be a pre-existing agreement.
This pit is located in As explained in the AFL, the organization's cooperation with - was similar to and. To clarify, in AFL, CRA did not state that the organization "gave" funds - instead, we stated that the audit showed that the organization lent approx. In its statements, the organization did not address the $20,000 loan, but instead explained actions related to other funds received from the canceled.
The Organization also said it did not want the "choose into action" because it could not afford to take any litigation action. In its representations, the Organization suggests that the transfer of the beneficial interests itself in the Deed of Gift is sufficient to reflect the legal ownership of the assets (an Account and the e-account) from EBF to the Organization. As such, it remains our view that the Organization has failed to exercise the required control over its charitable assets.
Failure to Issue Donation Receipts in Accordance with the Act
The conflicting statements in the affidavits do not reveal whether the assets were sold or invested.
Failure to Maintain Adequate Books and Records
Failure to File an Accurate T3010, Registered Charity Information Return
Conclusion
APPENDIX "B"
Relevant Provisions of the Income Tax Act Section 149.1 Qualified Donees
149.1 (2) Revocation of registration of charitable organization
149.1(3) Revocation of registration of public foundation
149.1 (4) Revocation of registration of private foundation
149.1 (4.1) Revocation of registration of registered charity
Section 168
Revocation of Registration of Certain Organizations and Associations 168(1) Notice of intention to revoke registration
168(2) Revocation of Registration
168(4) Objection to proposal or designation
172(3) Appeal from refusal to register, revocation of registration, etc
(11) to the administrator of a registered pension scheme that the Minister proposes to withdraw its registration. f.1) refuses to accept a change to a registered pension scheme. g) refuses to accept a pension fund for registration within the meaning of this law. (h) refuse to accept a pooled pension scheme for registration for the purposes of this Act or, in accordance with subsection 147.5(24), notify the administrator of a pooled registered pension scheme that the Minister proposes to withdraw its registration, or (1) refuse to do so to accept a change to a pooled registered pension scheme.
180(1) Appeals to Federal Court of Appeal
Section 188: Revocation tax
188(1) Deemed year-end on notice of revocation
188(1.1) Revocation tax
188(1.2) Winding-up period
188(1.3) Eligible donee
188(2) Shared liability - revocation tax
188(2.1) Non-application of reyocation tax
188(3) Transfer of property tax
188(4) Transfer of property tax
188(5) Definitions In this section,
189(6) Taxpayer to file return and pay tax
189(6.1) Revoked charity to file returns
189 (6.2) Reduction of revocation tax liability
189(6.3) Reduction of liability for penalties
189 (7) Minister may assess