CRA revokes Scarborough-based charity’s status

The Canada Revenue Agency (CRA) will revoke the registration of Marketplace Ministries International, a Scarborough-based charity. The notice of revocation will be published in the Canada Gazette with an effective date of March 16, 2013.

On January 31, 2013, and in accordance with subsection 168(1) of the Income Tax Act, the CRA issued a notice of intention to revoke the registration of Marketplace Ministries International as a charity. The letter stated, in part, that:

“Our audit revealed that the Organization has devoted a significant portion of its resources to the promotion of the Insured Giving Donation Program tax shelter gifting arrangement. Our audit has concluded that from January 1, 2009 to December 31, 2010, the Organization issued in excess of $23 million in receipts for cash and non-cash gifts received through this tax shelter arrangement.

“Of this amount, $19 million consisted of non-cash gifts that the Organization reports to have distributed as part of its own activities. However, the Organization’s records fail to substantiate that the property actually existed, that the property was in the Organization’s possession, that the values recorded on the receipts were accurate or that the property was distributed for charitable purposes.

“The remaining $3.9 million was reported as tax-receipted cash donations. Of this amount, the Organization directed $3.8 million to fundraising expenses and retained only $125,370 over the two years for use in its own charitable activities. The Organization’s earnings represent 3% of the gross cash donations received or 0.5% of the gross tax-receipted donations reported.

“It is our position that the Organization has operated for the non-charitable purpose of promoting a tax shelter arrangement and for the private benefit of the tax shelter promoters. The Organization has issued receipts for: transactions that do not qualify as gifts; issued receipts otherwise than in accordance with the Income Tax Act and its Regulations; failed to maintain sufficient books and records; and failed to file an accurate T3010, Registered Charity Information Return.”

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