Under s 149(12) of the Income Tax Act (Canada), certain not-for-profits (“NPOs”, ie entities exempt from tax under s 149(1)(l)) must file a T1044 information return. An NPO must file the T1044 if
(a) the total of all amounts each of which is a taxable dividend or an amount received or receivable by the person as, on account of, in lieu of or in satisfaction of, interest, rentals or royalties in the period exceeds $10,000;
(b) at the end of the person’s preceding fiscal period the total assets of the person (determined in accordance with generally accepted accounting principles) exceeded $200,000; or
(c) an information return was required to be filed under this subsection by the person for a preceding fiscal period.
An NPO that does not meet the conditions in paragraphs (a) or (b) above in a year will be caught by (c) in that year if (a) or (b) applied in any previous year (even if the NPO did not file a T1044 as required).
An NPO that fails to file a T1044 within six months of the end of a fiscal period is subject to a penalty for that period of $25 per day that the return is late to a maximum of $2,500.
The CRA will not apply the penalty for the first time an NPO fails to file. This policy might not apply to multiple failures to file, however. In that case, or if the “get out of jail free card” has already been used, then the NPO should consider a voluntary disclosure.
Summary of Amy G. Gibson Saab, “Late Not-for-Profit Returns (Form T1044)” Canadian Tax Focus 4:2 (May 2014).
