Arthur v. R. – TCC: Taxpayer disallowed charitable tax credits for a series of gifts over three taxation years

Bill Innes on Current Tax Cases

http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/108149/index.do New Window

Arthur v. The Queen
(February 19, 2015 – 2015 TCC 43).

Précis: CRA disallowed charitable donations claimed by the taxpayer in 2006, 2007 and 2008. The 2006 gift was alleged to be in part a gift in kind, which was not properly receipted, and an undocumented gift of cash. The 2007 gift was to a charity that had since had its registration revoked; its representative had fled Canada and was facing tax evasion charges. The 2008 gift was to an entity that had never been registered as a charity. The taxpayer did not provide any receipts for the alleged 2007 and 2008 gifts. Her appeals were dismissed.

Decision: The 2007 and 2008 appeals were dismissed because no receipts were submitted:

[23] It is a requirement under subsection 118.1(2) of the ITA that a receipt with the prescribed information be provided. This is a mandatory condition (see Sowah v. The Queen, 2013 TCC 297, 2013 DTC 1234, par. 16). A cash donation is permitted as long as it is recognized in an official receipt for income tax purposes.

[24] Without such a receipt, the appellant is precluded from claiming a charitable donation.

The 2006 appeal was dismissed because the taxpayer’s evidence was not credible:

[31] The respondent cast a doubt on the amount of the donation as in total (in‑kind donation and cash) it represented 16% of her reported net income, which is a rather large donation. One would expect a donor giving such a substantial amount to follow up and to keep adequate records supporting of that donation.

[32] Furthermore, the appellant did not rebut the Minister’s other allegation that Emelia did not receive any cash donations from the appellant (par. 7 e) of the Reply).

[33] As a matter of fact, Mr. Huenemoeder testified that Emelia did not have books and records sufficient to support the information filed on its T3010 charity information returns, with the result that its registration as a charitable organization was revoked.

[34] Considering the evidence as a whole, I conclude that the appellant has not shown on a balance of probabilities that she made a charitable donation in the total amount of $3,529 to Emilia in 2006, even though a receipt was provided which purported to show that she had done so.