The audit initially concerned the operations of the Organization for the period from 1 May 2004 to 30 April 2006. It is therefore our position that the Organization failed to operate exclusively for charitable purposes. While the Organization's charitable purpose is to make gifts to qualified beneficiaries, it is our position that the transfer of the - shares by the Organization to.
In light of the above information, we believe that the organization has failed to operate solely for charitable purposes, in accordance with the requirements of the law.
Nature of the property and use by the taxpayer. iv). For the purposes of applying paragraph 149.1 (3)(a) of the Act, it is our view that. As such, it is our view that the organization carried on business for the purposes of paragraph 149.1 (3)(a) of the Act.
In light of the above, it is our position that the Organization has been running a business that is not a related business.
Failure to Accept Valid Gifts in Accordance with the Act
As such, there appear to be sufficient grounds to revoke the organization's registration under section 149.1(3)(a) of the Act. As such, the property that the Organization would have received in any event did not qualify as a gift under section 118.1 of the Act. We therefore believe that the organization has failed to issue donation receipts in accordance with the law.
We believe that the Organization has issued receipts for transactions that do not legally qualify as gifts.
Failure to Maintain Adequate Books and Records
For this reason, there are grounds for revoking the organization's charitable status under Article 168(1)(d) of the Act. The organization has not considered our position and is in violation of Section 230 of the Act. For this reason alone, there may be grounds for revoking the Organization's registered status under subsection 168(1)(e) of the Act.
The remainder of the purchase price was to be paid by way of a promissory note.
J APPENDIXC
- you repeatedly use the "purportedly" when describing transactions that were the subject of your audit and that are also mentioned in the Crown's
- we submit that it is not reasonable or correct to assume that when a husband and wife are each entitled to claim an exemption for capital gains
- we submit that it is not correct to say that Theanon does not appear to have received any benefit from its participation in the transactions when,
- we submit that the value of shares can be legitimately reduced to a nominal amount if assets of a corporation are sold, tax is paid and
We are not aware of any overarching policy or any stated purpose and spirit of the provisions of the ITA that would prevent a data subject. Referring to the comments under the heading "Purpose and Activities of the Organization," we note that it is incorrect to suggest that a preponderance of Theanon's efforts and resources were spent participating in various tax planning arrangements. This is the same result in terms of the value of the shares that would occur if the company donated its assets, paid taxes and paid dividends to its shareholder.
We submit that the introduction of the rules on the award of undue benefits indicates that Parliament intended to narrow down the situations in which undue benefits threaten the status of a registered charity. We submit that Theanon paid nothing more than a reasonable amount for any of the shares in question. We argue that a detailed analysis of the transactions is not relevant or reasonable because the donation of approximately 16 million llm> shares occurred well before the start of Theanon's audit period.
In any case, we submit that it is impoverished as a result of the donation of shares, as is evident from your description of the documents and transactions. We submit that, when viewed from an overall perspective, the transactions resulted in a significant benefit to the registered charities and the fact that other taxpayers may have received collateral benefits that were not depleted or derived from the charities is not in itself a reason . to suggest that the registration of any of the registered charities should be revoked or that they were involved in any improper activity. Typically, a registered charity, a publicly traded company and a promoter arrange transactions so that a donor receives company shares and donates them to the registered charity.
To our knowledge, the CRA has never questioned these arrangements or suggested that the registered charity is merely acting as a conduit or conduit between the donor and the ultimate purchaser of the shares. In Theanon's transactions, we submit that all transfers that were characterized as gifts were legally gifts and should be recognized as such at common law and for ITA purposes.
Independent World Television Foundation
Carrying on an Unrelated Business
We have considered your representations submitted in relation to the unrelated business that the Organization has carried on; however, we do not feel that we have been provided with any new information and as a result we remain of the view that the Organization is operating a business that is not considered a related business. Furthermore, to be considered a related business, the business activity must be clearly subordinate to the overall charitable programming carried out by a charitable organization. In the absence of any significant charitable activity undertaken by the Organization, its business activities do not meet this test.
The potential to turn a profit was evidenced in the sale and purchase agreement signed with the seller, the Sea to Sky Foundation. A sample of lots reviewed and reported on the BCAA site shows that the fair market value of each lot is $147,500; The Organization reported a large profit from the sale of four lots in fiscal year 2009. The existence of profits in previous years was evidenced by the fact that the Organization sold four lots in fiscal year 2009, earning a profit of $1.8 million.
CRA is unable to verify the number of lots sold since 2009 as it is outside our audit period. However, it is reasonable to conclude that the Organization will have to enter into repeated and regular sales transactions in the years to come in order to fully realize the profit it intended to generate from all 56 lots. The expertise and experience of the persons or organizations that have entered into an agreement with the Organization to market and sell the lots are qualified real estate advisors and developers who have been in business for over 30 years.
The agreement suggested that the actions involved in the marketing and sale of such a large number of lots should have some continuity and regularity in order to constitute a successful business for years to come. Please note that our position is based on the issues and concerns revealed during the audit period, not on a forward-looking basis, and giving the business as well as the assets to a qualified receiver does not change our conclusion that the organization has engaged in an independent enterprise for which it can be revoked.
Issuing Official Donation Receipts Not in Accordance with the Act
Failure to Maintain Adequate Books and Records
For example, we found no Board minutes or plan documents relating to the DPL and 570129 BC Ltd share transactions. None of the documentation indicated that the invoices were for expenses incurred by or on behalf of the Organization. The books and records provided during and after the audit did not link any of the travel destinations to.
Under subsection 149.1 (3) of the Act, the Minister may revoke the registration of the registered charity in the manner described in section 168(1)(e) of the Act because the registered charity has failed to comply with or contravened any of sections 230 to 231.5 of the Act. It is our view that the organization breached section 230 of the Act for failing to maintain complete records to verify the information in its registered charity information and accounts. For this reason, there is reason to revoke the organisation's charitable status under section 168(1)(e) of the Act.
If on any day the Minister gives notice of an intention to withdraw a taxpayer's registration as a registered charity under any of subsections 149.1(2) to (4.1) and 168(1) or if this is determined on under subsection 7(1) of the Charities Registration (Security. Information) Act, that a certificate served in respect of the charity under subsection 5(1) of that Act is reasonable on the basis of the information available and evidence. (a) the charity's tax year that would otherwise have included that day is deemed to end at the end of that day; A is the total of all amounts, each of which is. (a) the fair market value of any property of the charity at the end of that tax year, (b) the amount of any appropriation (within the meaning conferred by subsection (2) in respect of any property transferred to another person in the 120 day period ending at the end of that tax year, or (c) the income of the charity for the liquidation period, including gifts received by the charity from whatever source during that period and any income that would be calculated on on the basis of paragraph 3 as if that period were a tax year; And.
A person who receives property from a charitable organization after a time that is 120 days before the end of the charitable institution's taxable year that is deemed to be completed under subsection (1) is jointly and severally liable with the charity for the tax paid by the charitable institution in subject to subsection (1.1) for that taxable year for an amount not exceeding the aggregate of all appropriations, of which any amount by which the fair market value of such property at the time it was received by the person exceeds the compensation, which a person gives in relation to property. Subsections (1) and (1.1) do not apply to a charity in relation to a notice of intention to cancel given under any of subsections 149.1 (2) to (4.1) and 168(1) if the Minister cancels the intention and so notify the charity or if a) during the one-year period beginning immediately after the charitable institution's taxation year, which is otherwise considered closed in accordance with subsection (1), the minister has registered the charitable organization as a charitable organization, private foundation or public foundation; and.
B where
B Where