Shahbazi v. R. - TCC: Court rejects receipts for charitable donations in kind

Shahbazi v. R. - TCC:  Court rejects receipts for charitable donations in kind

http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/144646/index.do

Shahbazi v. The Queen (May 25, 2016 – 2016 TCC 129, Woods J.).

Précis:   Mr. Shahbazi claimed to have made gifts in kind to charities in 2006 ($20,000) and 2007 ($15,000) which CRA denied and he appealed to the Tax Court.  The Tax Court rejected the appeal on the basis that the receipts were deficient, i.e., they did not describe the property in kind which was allegedly donated.  There was no order as to costs since this was an informal procedure appeal.

Decision:    The Court rejected the appeal on the basis that the two receipts relied upon by Mr. Shahbazi were deficient:

[15]        The prescribed information that is relevant in this appeal is set out in subsection 3501(1) of the Income Tax Regulations. The Crown takes the position that the tax receipts fail to comply with this provision in three ways.

(a)    First, the receipts do not contain both the date that the donation was made and the date that the receipts were issued.

(b)    Second, the receipts do not contain a brief description of the property, as required for non-cash donations.

(c)     Third, the receipts do not contain the name and address of the appraiser, which is required when the property is appraised.

[16]        It is clear from the tax receipts that were entered into evidence that these requirements are not satisfied.

[17]        It is sufficient to focus only on the second requirement above that the tax receipts contain a brief description of the property donated. The tax receipts in this case do not contain any description of the property donated, and do not even mention that the donations are in property and not cash. This is a clear failure to comply with one of the necessary requirements to claim the tax credits.

The Court also rejected counsel’s suggestion that the 2006 appeal should be allowed simply because the Minister’s reply did not name the charity in question, International Farm and Relief Mission:

[23]        Although the Reply does not mention the International Farm charity by name, the Reply does raises the issue as to whether donations were made to any registered charity in the 2006 and 2007 taxation years and whether proper tax receipts were issued by any registered charity. This is clear in the Reply from the statement of facts and grounds relied on.

[24]        Accordingly, I conclude that the failure of the Reply to mention the name, International Farm and Relief Mission, is not grounds to allow the appeal for the 2006 taxation year.

There was no order as to costs since this was an informal procedure appeal.