A recent Tax Court of Canada ("TCC")
decision, Promised Land Ministries v. The Queen
1, serves as a reminder to charities of the
importance of maintaining proper books and records. When a charity
fails to maintain proper books and records, it is not meeting its
responsibilities under the Income Tax Act (Canada) (the
"Act"). In a worst-case scenario, this
could cause the Canada Revenue Agency
("CRA") to suspend the charity's tax
receipting privileges and/or qualified donee status, or give notice
to the charity of its intention to revoke the charity's
registration.
This particular case involved a religious organization (the
"Charity") with activities in Canada and
overseas. In the case, the TCC upheld a decision of the Minister of
National Revenue (the "Minister") to
temporarily suspend the Charity's tax receipting privileges and
qualified donee status for one (1) year. The Minister's
decision was based on her finding that the Charity failed to
maintain proper books
