layout: post title: Revenue Canada revokes New Hope institute’s charity status categories:
The organization, which according to its website “strives to bring hope to the people of the world,” was stripped of its charitable status on Tuesday following an audit of the 2005-2006 tax year.
That means New Hope can no longer issue donation receipts for income tax purposes and is no longer exempt from paying income tax (unless it becomes a non-profit organization).
The Canada Revenue Agency alleges that New Hope “has operated for the non-charitable purpose of promoting a tax shelter arrangement and for the private benefit of the tax shelter promoters.”
Its books weren’t maintained properly, receipts were issued for transactions that don’t qualify as gifts, and it undertook activities outside its corporate mandate, the agency alleges.
The institute issued receipts totaling more than $100 million for pharmaceuticals received through a tax shelter arrangement in 2005-2006, then immediately sent the pharmaceuticals to another charity also operating under a tax shelter, according to the agency.
“The charity’s records, however, fail to substantiate that the values recorded on the receipts were accurate or that the property was distributed for charitable purposes,” the revenue agency alleged in a news release.
“For its participation and tax-receipting abilities, the charity received a cash gift from another participating charity of $1.5 million. Of this amount, the charity paid $1 million to the tax shelter promoters as fundraising fees. The charity itself retained a meagre $500,000 from the total tax-receipted amount for use in its own activities.”
The Canada Revenue Agency is reviewing all tax shelter-related donation arrangements, with plans to audit every participating charity, promoter and investor.
New Hope Ministries Institute could not be reached for comment.