CRA Releases Guidance On Ineligible Individual Rules

On August 27, the Canada Revenue Agency (CRA) released CG-024, a Guidance outlining CRA's interpretation and intended enforcement approach to the rules in the Income Tax Act (Canada) surrounding ineligible individuals.

The ineligible individual rules were introduced in the 2011 Federal Budget and became effective as of January 1, 2012. The rules are complicated, but provide, in essence, that the presence of an "ineligible individual" on the board or senior management of a charity, or in a position to control or manage the organization, is grounds on which CRA may revoke the registration of an registered charity or Registered Canadian Amateur Athletic Association (RCAAA) or refuse to register an applicant for charitable or RCAAA registration. The rules also authorize CRA to suspend the receipting privileges of a charity or RCAAA. Since the rules were introduced, there has been considerable speculation in the sector about how CRA will apply the rules. This