CRA News 
May 2021 Charity & NFP Law Update
Published on May 27, 2021

By Ryan M. Prendergast


CRA No Longer Accepting Ontario Annual Information Returns

Ontario corporations that usually submit Form RC232, Corporations Information Act Annual Return for Ontario Not-for-Profit Corporations to the Canada Revenue Agency (“CRA”) when filing the T2 Corporation Income Tax Return or the T3010 Registered Charity Information Return will no longer be able to do so. According to an announcement published by the CRA on April 30, 2021, the Ontario Corporations Information Act annual returns, including Form RC232, will no longer be filed through the CRA as of May 15, 2021. While the CRA will continue to process T2 and T3010 annual returns, Service Ontario has indicated that corporations will be temporarily exempted from the Corporations Information Act annual return filing requirement as of May 15, 2021, if the return is due during this period until further notice is given.

CRA Warns Canadians About Tax Shelter Gifting Schemes

The CRA published a warning to Canadians on May 5, 2021, about involvement in tax shelter gifting arrangement schemes. The CRA provided a brief synopsis of tax schemes and tax shelter gifting arrangements, which promise to reduce the tax owed by a taxpayer and attempt to have tax benefits and deductions from a donation equal to or greater than their donation. Although some tax shelters offer legal ways to reduce taxes or increase tax credits, the CRA warned that simply having a CRA tax shelter identification number does not guarantee that their operation is legitimate.

The CRA warned that it is “keenly aware of, and routinely audits, gifting arrangements and tax shelters”, and where it finds an illegitimate or inflated amount on a donation receipt, a taxpayer’s claim for that amount on their tax return will not be allowed. Further, the CRA has generally reduced donation amounts from gifting arrangements to any legitimate cash donation amount; where a true gift has not been made, the donation claim is then reduced to zero. Finally, the CRA indicated that both participants in and promoters of illegitimate tax shelters and tax schemes may face serious consequences, including penalties, fines and imprisonment.


Read the May 2021 Charity & NFP Law Update