The audit concerned the activities of the organization during the period from 1 September 20 15 to 31 August 20 17. The organization acted as a conduit and forwarded funds to the identified intermediary according to the wishes of the donor.
Failure To Maintain Adequate Books and Records of Accounts Pursuant to subsection 230(2) of the Act, every registered charity
ODRs were issued for only 35 percent:24 of revenue during 2016 and 26 percent25 of revenue during 201726 • The organization was unable to confirm the source of the rest of its revenue, except for copies of three checks from the Allan and Susan Seidenfeld Charitable Foundation for a total of $30,000. The Organization had no documentation to support the existence of the $268,000 in investments, and these amounts were reported as expenses in the Organization's books and records and in its financial statements. For disbursements made to "individuals in need", the Organization maintained no supporting documentation to show that it had conducted a means test before disbursing those funds and no source documentation to demonstrate what the funds were to be used for.
Due to the lack of adequate books and records, we were unable to verify the accuracy of disbursements reported to the intensivists, or to determine whether the Organization maintained ongoing direction and control over the funds transferred to the agents and over the activities performed by the agents. . Under paragraph 168(1)(e) of the Act, a charity's registration can be revoked if it does not comply with or contravenes subsection 230(2) of the Act. The Organization's serious failure to comply with its requirement to keep adequate books and records, as described above, constitutes material non-compliance.
For this reason, it is our position that there are grounds for revoking the charitable status of the Organization under paragraph 168(l)(e) of the Act.
Issuing Receipts Not in Accordance with the Act i. Directed donations
The organization acknowledged that many of the funds it received and for which it issued an ODR were subject to donor instructions. As detailed in Section 2 above, the organization is unsure how Yeshivat Birkat Moshe used these funds. A certain donor or donors made a donation to the organization and ordered that the funds be directed to the distribution of funds to those in need.
An individual made donations of $1,350 and $1,650 to the organization and directed that these funds be sent to Bnei Akiva schools. It is our position that the Organization has issued receipts other than in accordance with the Act and the Regulations. Specifically, the Organization failed to comply with the requirements of sections 3500 and 3501 of the Regulations regarding issuing receipts only when permitted and ensuring that all required information is present.
For any of the above reasons there may be grounds for revoking the Organization's charitable status under paragraph 168(l)(d) of the Act.
Failure to File an Information Return as and When Required by the Act and/or its Regulations
In 2016, the organization did not report all gifts to qualified beneficiaries on Line 5050 - Total Amount of Gifts to All Qualified Beneficiaries. In 2016, the organization did not report all gifts to qualified donors on its farm Tl236, Qualified Donations/Amounts Provided to Other Organizations Worksheet. The organization has not included contact details on its form TF 725, Basic Information for Registered Charities.
For this reason, there may be grounds for revoking the organization's registered status in accordance with paragraph 168(1)~c) of the Act. In this case, the Director General of the Charities Directorate may issue a notice of intention to cancel the organization's registration in the manner described in subsection 168(1) of the Act. In addition, each such agent will be informed of its obligations under the Agreements to ensure that the Organization conducts its own activities in the foreign jurisdiction.
The organization has also requested that its charitable status be revoked if the CRA finds that the education letter or compliance agreement is not justified.
Failure to devote resources to charitable activities carried on by the Organization itself
The organization has announced that it has created an application form for assistance and implemented it in its process to provide financial assistance to individuals. We acknowledge the steps that the organization announced it will or has taken to comply with CRA guidelines. We then identified projects supported by the organization that were carried out during the audit period in Israeli settlements.
The organization was unable to provide any additional information regarding this individual's circumstances. As a result, we were unable to verify whether this activity contributed to the organization's purpose. Therefore, it was our view that the Organization donated its resources to unqualified recipients.
The Organization did not provide sufficient information or documentation to address this issue in its submissions.
Failure to maintain adequate books and records
For example, the transfer of property or other assets of a charity to a person who does not do business with the charity directly or who is the beneficiary of the transfer for a special reason. The nature of the Organization's activities carried out during the review period in the Israeli settlements was not a factor in our decision to propose revoking the Organization's charitable status. Therefore, our view remains that the organization has failed to comply with the requirements of subsection 149.1(1) of the Act to devote all of its funds to charitable activities carried out by the organization itself.
Therefore, it is our view that there are grounds for revoking the Organization's charitable status under paragraph 168(1)(b) of the Act. Subsection 230(2) of the Act requires registered charities to keep adequate books and records of account, at an address in Canada registered with the CRA, containing information in such a form as will enable the Minister to determine whether there is reason to for revoking its registration according to the law. Failure to keep adequate books and records in accordance with the requirements of the Act is in itself sufficient reason for the CRA to revoke an organisation's charity registration.
As such, our position remains that the organization does not meet the requirements of subsection 230(2) of the Act.
Issuance of official donation receipts not in accordance with the Act
In addition, the organization announced that there will be no further loans or advances without arm's length. However, that does not allay our concerns about the serious non-compliance to date with the requirement to keep adequate books and records. The Act further requires a charity's records to contain such information so that the CRA can determine whether the charity's activities continue to be charitable in law.
The Organization's representations offered commitments to comply with the Act, but did not provide any documentation to enable us to verify that the Organization had addressed the inadequacies found in its ODRs and/or with its reception practices . Accordingly, the Organization's representations have not alleviated our concerns and our position remains that it has issued receipts that are not in accordance with the Act. For this reason, it is our position that there are grounds for revoking the charitable status of the Organization under paragraph 168(l)(d) of the Act.
Failure to file a return with information as and when required by law and/or its regulations.
Failure to file an information return as and when required by the Act and/or its Regulations
For the reasons explained above and in our letter of 21 November 2018, with the exception of activities carried out during the audit period in Israeli settlements, it is the CRA's view that the organization has not met the requirements for registration as a charity as outlined in the Act PCS. and 149.1, subsection As such, the organization should have its registration as a charity revoked under subsection 168(1) of the Act.
APPENDIXB
The Minister may give notice by registered post to a person described in any of paragraphs (a) to (c) of the definition of "qualified donee" in subsection 149.1(1) that the Minister proposes to cancel its registration if the person. a) apply in writing to the Minister for cancellation of registration; An appeal to the Federal Court of Appeal under subsection 172(3) may be made by filing a notice of appeal with the court within 30 days of. a) the day on which the Minister notifies a person under subsection 165(3) of his action in relation to a notice of objection filed under subsections 168(4.(2) to (4.1) and 168(1) or is in pursuant to subsection 7(1) of the Charities Registration (Security Information) Act has determined that the certificate served in relation to the charity pursuant to subsection 5(1) of that Act is reasonable on the basis of the available information and evidence. a) shall the tax year of the charity which would otherwise include that day is deemed to end on the end of that day;
A is the sum of all amounts that each is. a) the fair market value of any property belonging to the charity at the end of the relevant tax year. B is the sum of all amounts (other than the amount of an expense for which a deduction has been made in computing the income for the settlement period under paragraph (c) of the description of A) which each is. a) a debt from the charity which is outstanding at the end of the relevant tax year. The person who, after the expiry of 120 days before the end of the tax year for a charitable organisation, which pursuant to subsection charity for the tax payable under subsection (1.1) of the charity for that tax year in an amount not exceeding the sum of all grants, each of which is the amount by which the fair market value of such property on the time when it was received by the person exceeds the consideration given by the person for the property.
B is the sum of all amounts, each of which is the amount of a debt owed by the fund or any other obligation of the fund at that time. Any taxpayer who is liable for tax pursuant to subsection 188, subsection 1.1, for a tax year, must, no later than the day that is one year from the end of the tax year and without notice or demand, (a) file a notice with the Minister. . i) a statement for the tax year, in prescribed form and containing prescribed information, and. ii) both an information statement and a public information statement for the tax year, each in the form prescribed for the purposes of subsection 149 .1. If, in the one-year period that begins immediately after the end of a tax year for a person, the minister has employed the person for the person's tax liability pursuant to subsection
