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Saturday, February 21, 2009

Hamilton church loses charitable status but denies CRA allegations; are other churches at risk?

In January, the Western Standard raised the issue of charitable status for churches with a post entitled “Charitable status is not a tax subsidy; churches should be governed by the Bible, not the Charter.”

In a column written for Freedom Press, author and Liberty 100 nominee Dr. Michael Wagner makes the case that churches could come under increasing pressure to comply with Charter values and not Christian values if they hope to keep their charitable tax status.

This week, the Canada Revenue Agency (CRA) revoked the charitable registration of the Dominion Christian Centre of Canada, a Hamilton-area charity, not for Charter violations, but failing to comply with tax laws.

On December 30, 2008, the CRA, on behalf of the Minister of National Revenue, issued a notice of intention to revoke the charitable registration of the Dominion Christian Centre of Canada, in accordance with subsection 168(1) of the Income Tax Act. The letter stated, in part, that:

Our audit revealed serious issues of non-compliance. In particular, it was found that the Charity's assets have been misused for the private benefit of members, directors, donors and employees, and that the Charity has issued official donation receipts containing incorrect or false information.

The Dominion Christian Centre is denying the CRA allegations and is calling the move a test of faith.

Early last week, the opening page of the Dominion Christian Centre websitr refuted the specific allegations made by the CRA. Today, the site contains only a general statement about the allegations with a commitment to address questions on Sunday at 10:00 AM during service hours. The media page of the website is also not working and appears to have been removed.

The church is still accepting donations online, however, but these donations are no longer tax deductable according to the CRA.

A charity that has had its charitable status revoked can no longer issue donation receipts for income tax purposes and is no longer a qualified donee under the Income Tax Act. The organization is no longer exempt from income tax, unless it qualifies as a non-profit organization, and it may be subject to a tax equal to the full value of its remaining assets.

As for a general observation about charitable status for churches, it is a broadly held view among libertarians that churches and other private charities should be allowed to take an increasingly larger roll in providing welfare services currently delivered by the state. A system of private welfare is superior to the welfare state and the church is uniquely positioned to carry out these charitable works as long as its non-profit and charitable status remains in place.

As for the Dominion Christian Centre case in particular, judgement should be withheld until the organization has been given a chance to defend itself tomorrow. Whatever happens, and even if mistakes were made, it is likely the Centre has provided a greater public service than the CRA.

And as for the CRA, it was reported on February 9th that the CRA issued $3 million in paycheque to almost 2000 people no longer on the government payroll. This practice of paying former employees has been happening since 1999. You might think a tax agency with a record of sloppy accounting would be more charitable with their audits of religious institutions. Think again.

Posted by Matthew Johnston

Posted by westernstandard on February 21, 2009 | Permalink


Some so-called religious, charitable organizations provide money to known terrorist groups. Some disown their male offspring. Many are discriminatory. Some religions feel they are a self-governing political entity beholden only to their own God. Which rule would a religion break to be taxed by 'another' political entity?

Posted by: dewp | 2009-02-21 5:02:34 PM

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