The Canada Revenue Agency (CRA) has revoked the charitable registration of Jesus El Buen Pastor Spanish Pentecostal Church of Toronto, as its audit revealed its involvement in a tax shelter arrangement, according to the CRA.
The CRA’s audit focused on information that the church had devoted a significant portion of its resources to the promotion of the Insured Giving Donation Program tax shelter gifting arrangement. It concluded that from the beginning of 2006 to the end of 2007, it issued in excess of CAD18.5m (USD17m) in receipts for cash and non-cash gifts received through this tax shelter scheme.
It was the CRA’s position that the church operated for the non-charitable purpose of promoting a tax shelter arrangement and for the private benefit of the tax shelter promoters. It issued receipts for transactions that do not qualify as gifts; issued receipts otherwise than in accordance with the Income Tax Act and its Regulations; and failed to maintain sufficient books and records. The church's registration as a charity was therefore revoked.
The CRA reiterated that it regulates registered charities through the Income Tax Act and is committed to ensuring that charities operate in compliance with the law. Where a registered charity is found not to comply with its legal requirements, the CRA confirmed that it may apply monetary penalties or may suspend or revoke the charity’s status.
Furthermore, the CRA is reviewing all tax shelter-related donation arrangements (for example, schemes that typically promise donors tax receipts worth more than the actual amount of the donation), and said that it plans to audit every participating charity, promoter, and investor.
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