The Canada Revenue Agency
revokes the charitable status of International Charity Association Network
The Canada Revenue Agency (CRA)
has revoked the registered charity status of International Charity Association
Network (ICAN) effective August 9, 2008.
On December 3, 2007, the
Minister of National Revenue issued a notice of intent to revoke the charitable
registration of ICAN, in accordance with subsection 168(2) of the Income Tax
Act. ICAN filed a motion with the Federal Court of Appeal seeking an extended
period before revocation, which was subsequently dismissed. In its decision, the
Court stated, in part, that:
I have reached no
conclusion as whether the Minister's allegations are true, except those that are
undisputed. However, if they are true, it is arguable that they provide a prima
facie justification for the Minister's decision to revoke ICAN's registration. I
will mention some of the Minister's allegations to illustrate this point.
The Minister alleges that
in 2006, ICAN issued charitable donation receipts totaling approximately $464
million. ICAN does not dispute that allegation. The Minister alleges that is
almost five times the total charitable donation receipts issued by United Way of
Greater Toronto in the same year, although ICAN had only 16 employees in
Ontario, compared to 165 full-time and 43 part-time employees of United Way of
Greater Toronto. The Minister also alleges that ICAN failed to provide the
auditor with evidence that it has carried on its charitable activities on the
scale on which claims to operate. In addition, the Minister alleges that ICAN
has actively participated in tax shelter schemes that resulted in ICAN receiving
property for which tax receipts were issued in amounts far in excess of the
value of the property. . . .
The Minister takes the
position, properly in my view, that the public has a legitimate interest in the
integrity of the charitable sector. It is reasonable for the Minister to
safeguard that integrity by carefully scrutinizing tax shelter schemes involving
charitable donations of property and, where there are reasonable grounds to
believe that the property has been overvalued, by taking appropriate corrective
The notice of intent to
revoke and other letters relating to the grounds for revocation are available to
the public on request by calling 1-800-267-2384.
A charity that has had its
charitable status revoked can no longer issue donation receipts for income tax
purposes. The charity is no longer exempt from income tax, unless it qualifies
as a non-profit organization, and it may be subject to a tax equal to the full
value of its remaining assets.
Registered charities in
Canada perform valuable work in our communities, and Canadians support this work
in many ways. The CRA 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 may apply monetary penalties or may suspend or revoke the charity's
status under the Act.
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 it plans to audit every participating charity, promoter, and investor. For
more information about tax shelters, visit the CRA's Tax alert Web page at