http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/99863/index.do
Lapointe v. The Queen (December 5, 2014 – 2014 TCC 356, Favreau J.).
Précis: The Court accepted the fact that the taxpayer and her husband donated $6,909 to a school in Haiti after the 2010 earthquake. However they donated the funds directly and were not issued a charitable receipt by the Canadian charity they had been working with. As a result the Court was forced to dismiss the taxpayer’s appeal.
Decision: This is an unusual decision in light of the spate of bogus charitable receipt cases that the Tax Court has dealt with in recent years. Here the court accepted that the appellant and her husband were engaged in charitable conduct and actually expended the funds at issue, $6,909, in the course of that conduct.
[4] In her Notice of Appeal and during her testimony, the appellant explained why she was unable to produce an official receipt entitling her to claim the amounts paid to or incurred on behalf of Action Canadienne Internationale de Bienfaisance (ACIB), a charitable organization duly registered with the Canada Revenue Agency (ACIB #885502 9843).
[5] Following the 2010 earthquake in Haiti, the appellant’s spouse, Paul D’Auteuil, a daycare teacher, went to Haiti as a volunteer to help build a camp for disaster victims about 60 kilometres north of Port-au-Prince. Mr. D’Auteuil’s services in Haiti were apparently rendered under the auspices of ACIB, since an official receipt for $10,882.86 was issued in his name for the 2010 taxation year.
[6] ACIB’s charitable activities focus solely on the mission of the École Mixte de la Foi de Montrouis in Haiti. Some 300 children attend this school. Yvette Levasseur is the founder and president of ACIB. The organization’s offices are located at 164 Fonteneau Street in Repentigny.
[7] The appellant and her spouse attended Église Le Contact at 380 Larochelle Street in Repentigny and apparently met Ms. Levasseur through this organization. Église Le Contact has provided financial support to the École Mixte de la Foi for several years.
[8] The relationship between Ms. Levasseur and the appellant and her spouse deteriorated in early 2011 because of numerous irregularities observed, that is, apparent theft, fraud, breach of trust and misappropriation of funds. For example, in February 2011, the appellant and her husband gave Ms. Levasseur one cheque for US$700 to buy school uniforms for the children, and another for US$500 for school fees for 20 children. The appellant and her spouse apparently noticed that Ms. Levasseur had used this money for other things without justification, and no receipts were produced for the purchases. As a result, the appellant and her spouse decided to remit the money directly to the school principal, Brutus Dieufort. Ms. Levasseur was aware of the actions of the appellant and her spouse, and assured them that tax receipts would be issued.
[9] In May 2011, the appellant and her spouse travelled to Haiti as executive members of ACIB with Ms. Levasseur. All of Ms. Levasseur’s travel expenses were covered by ACIB. During this trip, the principal of the École Mixte de la Foi gave the appellant and her spouse invoices for 900 new books purchased on his behalf or on behalf of the École Mixte de la Foi, but paid for by the appellant and her spouse.
[10] In addition to the donations for the purchase of textbooks, enrolment of students at the school and school uniforms, the appellant and her spouse paid for food and supplies for a year-end party for children and staff at the school, and for medicine. A portion of these donations were hand delivered to the principal of the École Mixte de la Foi, who issued receipts with the school’s official stamp.
[11] Since the appellant and her spouse had lost trust in the ACIB president, they reported the irregularities they had observed to the organization’s board of directors at a meeting in June 2011. Nothing was done, and Ms. Levasseur remained the organization’s president. However, in August 2011, Ms. Levasseur confirmed by email that she and the organization’s board of directors had agreed to issue Mr. D’Auteuil the tax receipts for 2011.
[12] Despite Ms. Levasseur’s promise to issue the tax receipts, she ultimately offered a receipt for only $2,326.25, far below the amount spent by the appellant and her husband on behalf of ACIB. In the end, because the appellant and her spouse did not accept the offer, no receipt was issued to the appellant and her spouse for donations to the organization for 2011.
Since ACIB refused to issue tax receipts, the Court’s hands were tied:
[17] I have no doubt whatever that the appellant and her spouse visited Haiti from May 25, 2011, to June 15, 2011, for humanitarian purposes. The airline tickets, receipts for accommodation and transportation in Haiti, calling card invoices and photographs taken at the Pierre Elliot Trudeau Airport demonstrate this beyond any doubt. The appellant and her spouse appear to be sincere, and I have every reason to believe that they actually did incur the expenses claimed for charitable purposes. That is not where the problem lies.
[18] The problem lies in the fact that the appellant did not provide any “official receipt” containing the information required under section 3501 of the Regulations. The purpose of the requirements set out in the Regulations is to avoid abuses of any kind. They are the minimum requirements for defining the authenticity of a gift that can qualify the taxpayer making it for a tax deduction. The Court has no discretion to disregard the requirements of the Regulations.
[19] In this case, the appellant has not proven that the receipts meet the minimal requirements of sections 3500 and 3501 of the Regulations, and therefore cannot be entitled to the donation tax credit at issue.