The CRA has revoked the status of two more charities that had participated in tax shelters.
One of them, the Millenium Charitable Foundation, applied unsuccessfully to the Federal Court of Appeal “for an order prohibiting the Minister from publishing the Notice of Intent to Revoke in the Canada Gazette until the rights of objection and appeal of the Foundation under the ITA have been fully exercised and exhausted” (see Millennium Charitable Foundation v. M.N.R., 2008 FCA 414).
The Foundation, among other things, tried to argue that, if the revocation proceeded, it would be unable to pursue its objection to the revocation because of the tax levied on de-registered charities under Part V of the Act. The Court called these concerns “speculative”:
Indeed, there may be any number of ways in which the Foundation’s future litigation costs could be financed. For example, additional donations might be received, existing funding (which is in the range of $0.5 million to $1.7 million) might be utilized to prepay such costs or the Crown might apply its “administrative policy” of extending the deadline for payment of any Part V tax assessed against the Foundation until all rights of objection and appeal against the proposed revocation have been exhausted. Suffice it to say that the present uncertainty with respect to the financing of the Foundation’s future litigation costs falls well short of the clear and compelling evidence that is required to establish that the Foundation will suffer irreparable harm if its status as a registered charity is revoked.
