Decision Date: February 17, 2014
Link: Case Summary Document
Citation: [2014] TCC 54 (Tax Court of Canada, Paris J)
Acknowledgement:The Pemsel Case Foundation thanks The Australian Centre for Philanthropy and Nonprofit Studies for its contribution in the drafting of this Case Note.


In this Canadian case, the appellants were appealing the disallowance of tax credits for charitable donations they claimed in the 2006, 2007 and 2008 taxation years. Mr. Ofori-Darko claimed donations to the Redemption Faith Ministries/Church (Redemption) of $3645, $4516, and $4102 for those years respectively.  Ms Ofori-Darko claimed donations of $10,815, $10,195 and $10,648 to the same organisation for those years respectively.

Redemption was a registered charity at the time in question. It operated a house of worship in Etobicoke and according to the appellant was engaged in charitable activities in Canada as well as in Ghana. Mr. Ofori-Darko was the founder and pastor of Redemption, and was also a director. Ms Ofori-Darko was an assistant pastor and a director.

The charitable registration of Redemption was revoked in 2010 because the Minister of National Revenue (the Minister) could not confirm the charitable activities of Redemption. Investigation by the Canada Revenue Agency (CRA) revealed that in 2005 Redemption issued receipts for donations totalling over $121,000. However, only $4234 was deposited in Redemption’s bank account that year. In 2006, Redemption issued receipts for over $677,000 of donations, but only $7876 was deposited into its bank account.

The Minister disallowed the appellants’ claimed credits on the basis that neither appellant made any donations to Redemption in any of the relevant years and also because the charitable donation receipts issued to them by Redemption did not contain the information necessary to prove the gift required by Regulation 3501 of the Income Tax Regulations (ITR). A receipt setting out the prescribed information is necessary in order to claim a tax credit for a charitable donation: paragraph 118.1(2)(a) of the Income Tax Act (ITA).

The appellants’ evidence was that although they gave some cash (in the form of tithes) to Redemption in the relevant years, consisting of (for Mr. Ofori-Darko) $2047 in 2006, $2738 in 2007 and $2346 in 2008, and for Ms Ofori-Darko of $3550 in 2006, $4740 in 2007 and $5240 in 2008. The remainder of Mr. Ofori-Darko’s donations allegedly consisted of gifts in kind to Redemption, in the form of new and used clothing and shoes which Redemption shipped to Ghana and distributed to needy individuals. Ms Ofori-Darko also said she made donations in kind, gave food for church activities, paid parking fees while making hospital visits, and made additional cash contributions beyond the tithes shown in the tithe record book. However, no records of any of the gifts in kind, expenses or other cash donations were produced.

His Honour found that on the balance of probabilities no donations were made in the relevant years. There was insufficient evidence produced to support any other conclusion. The tithe books produced were held to be not reliable, and the bank records did not support the contention made by the appellants that they had banked all the tithes received in each year.

Although His Honour was satisfied that the appellants had made no donations at all to Redemption, he went on to consider the receipt question. He held that the receipts issued did not comply with the ITR in any way – they were incomplete and self-issued by Mr. Ofori-Darko for Ms Ofori-Darko.

Therefore, the appeal was dismissed.

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Implications of this case

Receipts issued for charitable donations in Canada must comply with the subsection 3501 (1) of the (federal) Income tax Regulations (ITR). In particular, they must provide a breakdown of the donation between cash and gift in kind and a description of any gifts in kind that were allegedly donated. The receipts in this case did not show this information, nor did they show when the gifts in kind were received by Redemption, the fair market value of the gifts at that time, or the locality or place of issuance of the receipt. As the information listed in subsection 3501(1) of the ITR is mandatory for charitable donation receipts, the receipts in these appeals were insufficient to prove the making of a gift as provided for in paragraph 118.1(2)(a) of the Income Tax Act.