Compliance Continuum

The Charities Directorate is responsible for monitoring the operations of registered charities in Canada to make sure they comply with the requirements of the Income Tax Act.

Generally, education is our first approach to compliance. Outreach initiatives such as our information sessions, publications, and Web site provide the guidance that charities need to be compliant. In addition, we respond to questions from individual charities by telephone or in writing. Informed donors are partners in ensuring compliance in the sector. Public education helps donors make wise decisions about the charities to which they give.

Audits are an important tool in ensuring compliance. Generally, we use a series of progressive compliance measures. In less serious cases of non-compliance, we use education letters or compliance agreements. In more serious cases, we may impose a monetary penalty, suspend a charity's tax-receipting privileges, or revoke a charity's registered status. Although revocation is generally the last resort, the Income Tax Act allows revocation at any time where appropriate to the circumstances.

Objections and appeals

A charity may feel that we have misinterpreted the facts or not applied the law correctly when making a decision on an application, imposing a sanction, or proposing revocation of charitable status. If so, the charity can file an objection to the Canada Revenue Agency's Appeals Branch. If the charity disagrees with the decision of the Branch concerning the objection, the charity can appeal to the courts.

Related topics

• Appeals
• Guidelines for Applying the New Sanctions

References

• Pamphlet T4118, Auditing Charities