First Reference company logo

Inside Internal Controls

News and discussion on implementing risk management

machine cogs image

Author Archive - Drache Aptowitzer LLP

Drache Aptowitzer LLP is one of Canada’s foremost experts in the law related to charities and non-profit organizations. Their team of bloggers is led by Adam Aptowitzer LLB. He is a lawyer practicing in the areas of charity and tax law. He is a member of both the bars of Alberta and Ontario. He has been speaking and writing on the topic of charity law for several years and been published in numerous publications including the Canadian Taxpayer, the Canadian Fundraiser and the Not-for-Profit News and has been cited as an expert in many publications including the National Post. Read more here

Charities and not-for-profits: Beware the usual rules

Charities and not-for-profits are obviously subject to a layer of laws that are related to their special status. Often overlooked though, is that they are equally subject to the same rules and regulations as other economic actors. Indeed, sometimes there are linkages between these two worlds making the need for good legal awareness that much more critical.

 

, , , ,

Church and religious organizations: Maybe Adam and Eve could have appealed their sentence

We are often contacted by charities seeking to insulate themselves from potential legal action by disgruntled former members of their organization. This typically results from situations where the individual has been kicked out of the organization for specific misconduct. Although, for the most part, these disputes result in acrimonious name calling from time to time, these matters are litigated. A recent decision of the Alberta Court of Appeal is one circumstance where an irate former member of the Jehovah’s Witnesses took the matter to Court.

 

, ,

Expanded Employer Health Tax exemption for charities with multiple locations

As of January 1, 2017, the Employer Health Tax rules specific to charities have undergone a significant change that will benefit certain charities with multiple locations: If a registered charity has more than one “qualifying campus”, it can claim an Employer Health Tax exemption amount for each one of them separately.

 

, , , , , , ,

Political activities: Consultations may have side effects

As our readers know, the new government has taken steps to revamp the restrictions on political activities by charities, by dismantling the political activities audit program and by promising a new approach following consultation with the public and members of the charities industry. It is important, however, to note that the changes may not only effect the charity realm as Nova Scotia Community Interest Corporations have similar restrictions.

 

, , , , , , , , , , ,

Political activities law: Charity brings new Charter challenge

When the Liberals came into power last year, the new Minister of National Revenue announced that she was putting a halt to the “political activities” audit of charities that the previous administration had been conducting for the past few years. In practice, this meant that the charities in line to be audited under the program were given a reprieve, but those that were already in the course of being audited were not. One of the latter charities, Canada Without Poverty, is now bringing a constitutional challenge against the political activities law.

 

, , , , , , , ,

CRA provision misuse: The right to remain silent

Practically every tax professional in the country has had to deal with the situation which arises when the Canada Revenue Agency (CRA) bases its reassessing position on the basis of an oral comment to the CRA. The difficulty is that there is no proof the comment was made or it may have been the result of a misunderstanding between the parties. In our practice we had one instance where a comment by an official of a charity to the CRA served as basis for reassessing over a thousand taxpayers. While the official admitted to having made the comment the fact was that the CRA auditor had misunderstood the context in which it was made.

 

, , , , , , , ,

Observing the impossible law

That charities are subject to laws that cannot be obeyed is symptomatic of several problems. In part this can be traced back to the federal government’s lack of constitutional jurisdiction in legislating in this area (a topic we have written about many times). But the role of the courts in ensuring that laws meet the principles of natural justice has become muddied with the long record of losses by charities at the Federal Court of Appeal. However, the solution to this particular problem—including some of the more problematic parts of the political activities tests may be simpler than redrafting the constitutional division of powers.

 

, , , , , , , , ,

Israeli arrests provide lessons for Canadian charities

For most Canadians and Canadian Charities the Anti-Terrorism rules are a red herring to be reviewed only in the rarest of situations, if at all. However, recent events in Israel provide some motivation for Canadian Charities doing work abroad to take a closer look at these rules. According to international news reports the Israeli authorities have arrested the Gazan head of an international Christian charity on the allegation that he was funneling international aid donations to Hamas.

 

, , , , , ,

Even in the face of disaster, charities should not stray from their purposes

Whether it is assisting Syrian refugees to settle in Canada or helping those fleeing from floods and fires, the goodwill of the people and charities in Canada always make headlines. In times of disaster, it seems many charities want to raise money and get on the bandwagon to help those in need. Although this may be a laudable goal for charities that want to show their benevolence, sometimes it could simply get them into trouble.

 

, , , , , , , , , , , , ,

On modernizing the definition of “charity”

Canadian charity law, being largely based on that of the United Kingdom, traces its roots directly back to the preamble of the English Charitable Uses Act of 1601, known as the “Statute of Elizabeth I”. Although the Statute itself was repealed in the 19th century, the preamble was legally preserved and still forms the basis of the line of case law running right to the modern day that defines what is legally charitable.

 

, , , , , , , ,

Separate but together: A property tax lesson

Next to the ability to issue charitable donation tax receipts a break in property taxes is likely the next most popular reason for seeking registered status. Of course, the considerations on this issue vary from province to province as the exemption from property tax is a matter of provincial jurisdiction. But the commonalities both of charity operations and of the various property tax regimes make decisions relating to the property tax of a charity in one province germane to those operating in another.

 

, , , , , , , , ,

Like pornography – The Court will know major T3010 inaccuracies when it sees them

In most cases the application of law is conceptually simple the law is transgressed and a punishment applies. Unfortunately, in the charity world nothing is simple. When a charity is found to have transgressed the law the Charities Directorate may decide on a range of options. One widely used mechanism is the Compliance Agreement (a “CA”) in which the Directorate identifies the offence and the charity promises not to do it anymore. If (and when) the Directorate audits again it almost always moves directly to revocation if the charity is again (or still) offending in the same way.

 

, , , , , , , , , ,

Directors’ responsibilities – Heightened awareness and standard

While directors’ fiduciary obligations in the for profit sector has been the subject of considerable academic writing and, indeed, lawsuits, the principles that inform directors conduct and responsibility in that sector apply equally to the not for profit sector. We can expect to see a growing trend by which directors of not for profit organizations […]

 

, , , , , ,

Donation tax rules: Now things are getting ridiculous

People always complain about the tax laws being way too complex but you know things are bad when even the tax lawyers are losing track of the most fundamental elements of the law. And what could be a more fundamental element of income tax then knowing the right percentage to apply to a given transaction […]

 

, , , , , , , , ,

Previous Posts Next posts