Canadian Tax Adviser, January 26,2016.Dave Magdalinski, Edmonton, Enterprise Tax.The CRA has announced its review of registered charities' political activities has found substantial compliance with the rules regarding charities' involvement in political activities. As a result, the CRA has said it will conclude its political activities audit program once the remaining audits have been finalized.
The CRA's January 20, 2016 announcement also stated that it will be publishing an annual report on its activities as part of its commitment to provide the public with information on the regulation of charities.
The 2012 federal budget noted that a charity is allowed to engage in political activity as long as the activities represent a limited portion of its revenues, are non-partisan, and are ancillary and incidental to its charitable purposes and activities. Finance stated that it was concerned that charities were exceeding these limitations. Further, the government noted that there was no requirement for a charity to disclose the extent to which it receives funding from foreign sources for political activities. The budget proposed to provide the CRA with additional enforcement tools.
As a result, CRA revised Guide T4033, "Completing the Registered Charity Information Return", to require charities to provide more details about their political activities. The CRA also released revised Form T3010, "Registered Charity Information Return". Finally, the CRA sent a nine-page questionnaire out to charities, asking for information about their political and foreign activities, among other things.
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