NFP Q&A: CRA’s Requirements On Keeping Records

With the end of a calendar or fiscal year, organizations may be tempted to throw away some of their documents.  Wait!  Before doing so, organizations need to consider record-keeping requirements.  I asked my colleague Camille Jordaan to provide a reminder on some of these record-keeping rules in terms of records of interest to the Canada Revenue Agency ("CRA").

Question:  Why should organizations not start shredding their paper documents or deleting their electronic documents?
Camille:  Organizations are required by law to keep certain records.  For example, the Income Tax Act (Canada) generally requires records and supporting documents required to determine one's tax obligations and entitlements to be kept for a period of at least six years from the end of the taxation year to which the records and documents relate.  There could be penalties or other consequences for failing to keep adequate records.