Not all charities are created equal

National Post

2013-10-16


With Thanksgiving behind us, we're about to enter the prime season of charitable giving, which will reach its peak in December as the deadline to get that donation tax credit for 2013 approaches.

But just because you made what you thought was a charitable donation to a good and worthy cause doesn't necessarily mean that you will be entitled to the a tax credit when it comes time to file your return next spring.

Take the recent decision of the Tax Court of Canada in which a taxpayer went to court challenging the Canada Revenue Agency which denied him the donation tax credit for a donation he made to the International Association of Scientologists (IAS).

The taxpayer was denied the credit for the nearly $25,000 which he contributed in 2011 on that grounds that the IAS was not a registered charity and therefore not considered a "qualified donee" under the Income Tax Act. This was despite the fact that the IAS was involved in various charitable activities, such as drug addiction education and treatment and disaster relief. As the court wrote, "There is no dispute that IAS conducts what are normally considered charitable or charitablelike activities but... IAS is not a registered Charity in Canada."

The donor tried to argue that his denial of the credit was a violation of section 15 of the Canadian Charter of Rights and Freedoms, which states that "every individual.. .has the right to the equal protection and equal benefit of the law without discrimination."

The court held that since the tax credit for contributions to a nonregistered charity "is not a benefit provided by.the Income Tax Act" section 15 of the Charter "cannot be infringed."

The Judge explained that the taxpayer chose to contribute to an organization that was not a registered charity instead of one that was a registered charity. As a result, "his personal choice does not mean he was denied the benefit of a law that only grants tax advantages for contributions made to registered charities."

You can find out whether the charity you wish to donate to is registered by visiting the CRA's website (www.cra-arc.gc.ca) and on the "Charities and giving" page, you can go to the "Charities Search" box where you can check to see if charity you want to give to has been registered.