CANADA REVOKES CHARITABLE STATUS OF TRAS

The Canada Revenue Agency (CRA) responsible for administering tax laws for the Government of Canada and for most provinces and territories announced that it has revoked the charitable registration of Ottawa-area charity, Tamil Refugee-Aid Society (TRAS), as of July 17, 2010.

The agency has issued a notice last month of its intention to revoke the charitable registration of the Society saying that on the basis of an audit conducted, it has concluded that the Society has ceased to comply with the requirements of the Income Tax Act for its continued registration.

The CRA stated that in that the charity failed to maintain adequate control and direction over the use of its funds; improperly issued tax receipts on behalf of third parties; and provided funding to non-qualified donees outside Canada.

Once its registration revoked, a charity cannot issue donation receipts for income tax purposes and is no longer a qualified donee under the Income Tax Act. The organization is no longer exempt from income tax, unless it qualifies as a non-profit organization, and it may be subject to a tax equal to the full value of its remaining assets, CRA says.