The organization failed to demonstrate that the amounts it paid were fair market value and reasonable. The organization did not provide complete records that would allow the CRA to verify the organization's gross receipts. Some individuals, although listed as directors, were not involved in the management of the organization.
Finally, the audit revealed that the Organization failed to exercise due care in submitting its information returns. The Canada Revenue Agency's (CRA) audit revealed that the Organization does not comply with the requirements set out in the Act. On 15 December 2011, I would like to inform you that, in terms of subsection 168(1) of the Act, I propose to revoke the registration of the Organisation.
Registered charities must comply with the Act, failing which the registered status of the organization may be revoked in the manner described in section 168 of the Act. Most of the money raised went to the fundraiser, which misrepresented to donors the total amount the organization would receive. As discussed above, our conclusion is that fundraising is a secondary goal of the organization.
Therefore, the Organization has failed to allocate its resources for its charitable activities and purposes, in violation of the law.
Undue Benefit
Yonter represented that MTC is no longer in business, and the Organization has also ceased operations. Organization has not undertaken any other methods of raising funds nor has it engaged any other third party fundraisers to raise funds on its behalf. Yonter also stated that he does not intend to fundraise in Canada or in the United States under the Organization's name, and that the recent registration of the name "Cancer Survivors' Fund of Canada" as an entity in the state of Texas has done to protect the name from use. .. is reasonable or not disproportionate compared to the public benefit to be achieved in all the circumstances.
If the activities carried out by a registered charity grant. a private benefit that does not meet these criteria will be considered unnecessary. A charHy who provides an improper private benefit, does not use air of his resources for charitable purposes, and may be refused registration, liable to a fine under the Act or have his registered status revoked. The audit revealed that the Organization entered into an agreement with a third-party fundraiser, Millennium Teleservices of Canada, through which the fundraiser received more than 90%- of the funds raised from dc>nol"$. The fundraising fees did not arise directly from the pursuit of the organization's purposes, and were not ancillary or incidental.
On the contrary, the organization's pursuit of its charitable purpose in providing scholarships was minor and disproportionate in comparison. There was no evidence that the excessive fees were unavoidable and necessary to secure. The organization had determined the fair market value of the services it had received and that the amounts it paid for such services were reasonable.
The CRA's view is that the payments to the third-party fundraiser were excessive and did not support the charitable purposes of the organization and that it was. Based on these duties, it appears that the operation of the organization was carried out by a private company. Yonter, who stated that he managed the organization and performed most of the tasks related to its operations.
Additionally, the Organization failed to provide adequate documentation to confirm that SMY Advisers LLC provided any services to the Organization for the consulting fees it received and that fair market value amounts were paid.
Failure to Maintain Adequate Books and Records
At the time of this letter, the Organization's corporate annual filing was overdue for - the 2011 fiscal period. Failure to maintain the Organization's corporate status may result in the organization being dissolved and consequently registered. Yonter was asked whether the organization is a "resident" in Canada or whether it has a presence in Canada.
In its application for incorporation, the Directors confirmed that the Organization's head office would be located in Vancouver, British Columbia. Contrary to these assurances, the organization used the address of a mailing company that offers private mailbox rentals, mail forwarding and re-mailing. The Organization's Board of Directors did not hold regular meetings to discuss and make decisions regarding the Organization's activities.
Director Brenda Lawson, who is the organization's only Canadian director, stated that she was not involved in the organization's operations or any decision-making. Working in such a way does not show that the board has exercised due care and that the direct management acted independently in the best interests of the organization. The fundraising arrangement with Millennium Teleservices of Canada did not include a condition that the organization receive donor information.
As such, we are unable to verify the amounts reported for fundraising income and expenses, which raises serious concerns about the operations of the Organization. It was proposed that all funds raised for the Organization be placed in a lockbox bank account at th in Toronto, Ontario.· According. Jersey automatically transferred 90% of all funds deposited to the fundraiser, with only 10% transferred to the Organization's Bank account in Toronto, Ontario.
No documentation was provided regarding the lockbox account to enable us to verify the gross income of the Organization. We reviewed the official do.nation receipt template that would have been used if the Organization had issued any official donation receipts. The official donation receipts would not have complied if the Organization had issued any donation receipts using the template.
15 - Internet website
B where
34;net amount of assets" of a charitable foundation at any time means the amount determined by the formula. A is the then fair market value of all property owned by the foundation. B is the sum of all amounts of each of which is the amount of debt or any other liability of the foundation at that time; .
34. Net value" of property owned by a charitable trust, as of the day of its transfer, means the amount determined by the formula. Any taxpayer liable to tax under this Part (other than a charity liable to tax under section 188 , paragraph (1) for a tax year, on or before the day on or before which the taxpayer is liable to pay tax, or would be liable if tax had been payable by the taxpayer under Part I for that year, is required to file a return of income or an information return under Part I for the year. (a) lodge with the Minister a return for the year in the prescribed form and containing the prescribed information, without notice or request; Every taxpayer liable to pay tax under subsection 188 (1.1) for a taxable year shall, on or before the day falling one year after the end of the taxable year, and without notice or requirement, file a return for the taxable year, in prescribed form and containing prescribed information and (ii) both an information return as a public information return for the taxable year, each in the form prescribed for the purposes of subsection and. (b) estimate in the return referred to in subparagraph (a)(i) the amount of tax payable by the taxpayer under subsection 188(1.1) for the tax year; And.
If, during the one-year period beginning immediately after the end of the person's tax year, the Minister has assessed the person in relation to the person's tax liability under subsection 188(1.1) for that tax year, he has not reassessed the person's tax liability after that period and that liability exceeds $1,000, this liability shall be reduced by the aggregate amount at any time. i) the sum of all amounts for each.
