CHARITABLE RECEIPTS

I have had several inquiries over the past few weeks regarding the new Canada Revenue Agency (the "Agency") requirements for charitable receipts. To answer these questions and generally inform the Aptlaw.com newsletter readership, I have decided to send out this bulletin. As usual, please feel free to distribute this bulletin to anyone who may be able to make use of it.

The apparent purpose of these new requirements is to instill greater integrity into Canada 's charitable donation regime and thereby to increase Canadians' confidence in their charities.

In the past, receipts issued by registered charities were required to contain the following information where applicable:

The name and Canadian address of the organization;
The organization's Canada Revenue Agency registration number;
The receipt's serial number;
The place where the receipt was issued;
If the donation is a cash donation, the day or year during which the donation was received;
The day on which the receipt was issued (if different from the day on which the donation was received);
The name and address of the donor (for an individual include his or her first name and initial);
The value of the donation on the date it was made;
The signature of an individual authorized by the organization to acknowledge donations, (where a charity generates its official receipts automatically, the receipts may bear a facsimile signature).; and
If the donation is a gift other than cash:

The day on which the donation was received,
A brief description of the property, and
The name and address of the property appraiser if an appraisal was done;

As a result of the recent amendments to the Income Tax Act, official receipts issued by a registered charity after 2004 must include all the information listed above, as well as:

The name of the Canada Revenue Agency; and
The Agency's website, http://www.cra.gc.ca/charities.html .

If a registered charity uses preprinted receipts from previous years that do not include this new information, the Agency requires that it be added to the receipt (for example by stamp or through the lost and almost forgotten art of handwriting).

The Agency has stated that it will not penalize registered charities that do not include the requisite information in 2005. However, registered charities which do not include this information in the future leave themselves open to a penalty of 5% of the eligible amount stated on the receipts for a first offense, and a 10% penalty on the eligible amount of the receipts on the second offense. Obviously, it is in a charity's best interests to comply with the law proactively and make the necessary changes to its receipts for the 2005 taxation year.

If you have any questions or concerns please feel free to contact me.

Yours truly,

Adam Aptowitzer