Charity and NFP Legislation

Charities play a crucial role in society, channeling resources to noble causes and making a positive impact. However, like any organization, charities may face audits by the Canada Revenue Agency (CRA) to ensure compliance with regulations. In this blog post, we explore the options available to charities during and after an audit, shedding light on the transparency measures in place and the statistics surrounding audit outcomes.

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‍Recourse During and After an Audit:

‍When a charity undergoes an audit, it has the opportunity to make representations to the CRA. These representations may include providing additional information, explaining disagreements with the CRA's position, or proposing changes to address concerns. The CRA thoroughly considers the charity's responses before making a determination on compliance outcomes.

If the CRA decides to impose sanctions, annul, or revoke the charity's registration, it communicates this decision through a registered mail letter. In response to such a letter, the charity can file a written objection within 90 days with the Appeals Intake Centre, providing reasons for the objection and presenting all relevant facts. The Appeals Branch reviews the objection fairly, and if the charity disagrees with the decision, it can further appeal to the Federal Court of Appeal or the Tax Court of Canada.

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‍Public Availability of Audit Information:

‍Charities are not exempt from public scrutiny when it comes to certain aspects of audit outcomes. Despite the general confidentiality rules, the CRA can release information about charities in specific situations. When a charity's registration is revoked or annulled, or when sanctions are imposed, the CRA publishes this information in the List of charities. The CRA can also release copies of the letters outlining the reasons for its decisions, ensuring transparency in its actions.

Charities undergoing audits should be aware of the recourse available to them during and after the process. The transparency measures implemented by the CRA, such as public disclosure of certain information, aim to ensure accountability and uphold the integrity of the charitable sector. By understanding the outcomes of audits, charities can work towards compliance and continue their vital contributions to the community.