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APPENDIX V
Canadian Tax Provisions Dealing with Amateur and Professional Sports1
- The Income Tax Act allows for a deduction for any reasonable expense
incurred by a business for the purpose of earning income.
- This provision applies to all businesses, including professional sports
organizations.
- Examples of deductions by businesses include advertising in arenas,
or advertising in a game program to promote a product or service.
- Examples of deductions by a professional sports team include marketing
of team merchandise, or the advertising and promotion of team logo to generate
ticket and/or merchandise sales.
- Common specific examples of deductible expenses for businesses include
advertising on ice or floor surface at arenas, advertising on the rink
boards, advertising on the scoreboard, and advertising and promotion on
game programs
- The expense must be incurred for the purpose of earning income.
SUBJECT: INCOME TAX ACT
DATE: May 13, 1991
REFERENCE: Section 6 (subsection 2(3), sections 8, 115 and 212 and
paragraphs 18(1)(p) and 125(7)(d) and the definitions of "retirement
compensation arrangement" and "salary deferral arrangement"
in subsection 248(1))
Application
Summary
This bulletin deals with the taxation of Canadian resident athletes
and players (and prospective athletes and players) employed by professional
sports clubs, such as football, hockey and similar clubs that participate
in leagues having regularly scheduled games. In this bulletin, these individuals
are referred to as "players". The bulletin discusses the items
to be included in the income for tax purposes of such players and the timing
and manner of these inclusions, as well as the deductibility by these players
of certain expenses. The taxation of non-resident players is briefly discussed.
Finally, the bulletin explains the tax treatment applicable to players
who receive employment income through a corporation rather than from the
sports club directly.
Discussion and Interpretation
1. For tax purposes, a player's income from employment includes any
of the following items received in respect of employment:
(a) salaries, including income from personal service contracts (see
7 below),
(b) bonuses - for good performance, for allstar rating, for signing
contracts, etc.,
(c) fees - for promotional activities or other special services performed
on behalf of the club,
(d) living and travelling allowances (see 2 below),
(e) honoraria,
(f) payment for time lost from other employment,
(g) commuting expenses,
(h) free use of automobiles,
(i) awards - including cash and the fair market value of bonds, automobiles
and other merchandise
(j) payments made by a club on a player's behalf that would otherwise
be a non-deductible expense to the player, such as agents' fees, legal
fees, income taxes, fines, etc.,
(k) other benefits.
(a) Non-accountable allowances paid to players, including those paid
in the training and tryout period, are income to the player unless they
are exempt by virtue of:
(i) subparagraphs 6(1)(b)(vii) and (vii.1) (see the current versions
of IT-522 and IT-272 on the subject of travelling expenses for employees),
or
(ii) Subsection 6(6) (see also the current version of IT-91, Employment
at Special Work Sites).
Where a non-accountable allowance is income to a player, the player
may deduct reasonable expenses to the extent that the requirements of paragraph
8(1)(h) are met.
(b) Reimbursement of a player's properly vouchered travelling expenses
incurred for away-from-home games, or any other bona fide club business
away from the club's home base, is not considered to be income to the extent
that the expenses are reasonable in the circumstances. Similar expenses
paid directly by the club are also not considered to be income of the player.
However, amounts paid by the club in respect of the player (or reimbursed
to the player) for personal travelling, such as for personal vacations
or for family members, are considered to be income from the player's employment.
(c) The value of dining and dormitory facilities that are available
to all players during the training and tryout period are not regarded as
income to the players provided that the amounts are reasonable in the circumstances.
Where a player lives in the general location of the training and tryout
camp, and for personal reasons commutes daily from home, any allowance
paid to the player for travelling, meals, etc., will be considered to be
for personal living expenses and will be included in the player's income;
the employee will not be eligible to claim expenses pursuant to paragraph
8(1)(h) against this income.
Deferred Income
3. A contract of employment may state that part of the player's remuneration
will be payable on a deferred basis, referring either to a part of regular
salary, or to some special amount such as an annual bonus. Deferring (or
advancing) payments such as salary or bonus can affect the player's level
of income for tax purposes in a year. Because of the variety of arrangements
that may be made, each case must be considered separately, with due regard
to the terms of the employment contract and of any trust or other agreement
entered into by either party pursuant to that contract, including an employee
benefit plan. Plans or arrangements to defer the salary or wages of a professional
athlete for services as such with a team that participates in a league
having regularly scheduled games are exempted from the rules in the Act
applicable to a "salary deferral arrangement", as defined in
subsection 248(1). Such plans or arrangements will also be excluded from
the provisions in the Act applicable to a "retirement compensation
arrangement", as defined in subsection 248(1), provided, in the case
of a Canadian team, that the custodian of the plan or arrangement is a
trust company licensed to do business in Canada and carries on business
through a fixed place of business in Canada. In such cases, the plan or
arrangement is treated as an employee benefit plan (see the current version
of IT-502).
4. Generally, however, the player should include deferred remuneration
in income for the year in which the player actually or constructively receives
it, rather than for the year in which it was earned but not received. Where
the year of inclusion in income is after the player has ceased to be employed
by a particular club, subsection 6(3) is applicable (see the current version
of IT-196).
Non-Residents
5. Where a player or former player is a non-resident or ceases to be
a resident of Canada and receives remuneration or deferred remuneration
on account of services performed in Canada for a Canadian club, the player
will be liable for tax on that income pursuant to subsection 2(3), as calculated
under section 115, except where the payment is one of those specified in
section 212 to which Part XIII is applicable (for example, a retiring allowance
or deferred profit sharing plan payments). Non-residents are also liable,
by virtue of paragraph 115(2)(c.1), for tax on payments received for agreeing
to enter into a contract for services to be performed in Canada (i.e. signing
bonuses), for undertaking not to enter into such a contract with another
party or as remuneration for duties or services to be performed in Canada,
if the amount so received is deductible by the payer in computing income
for Canadian income tax purposes. Consideration must also be given to the
various tax treaties Canada has with other countries.
Deductions from Income
6. Players employed by sports clubs are limited to the same deductions
from employment income as are available to any other employee by virtue
of section 8. For example, fines paid by players personally are not deductible.
Legal fees incurred in the negotiation of player contracts are also not
deductible since paragraph 8(1)(b) stipulates that to be deductible, the
fees must be incurred in collecting salary or wages owed by an employer
or former employer or, after 1989, paid to collect or establish a right
to such amounts.
Personal Services Business
7. Rather than employing a player directly, a sports club or organization
may retain the services of a corporation with which the player is in turn
engaged under a personal service contract. Income from such personal service
contracts may be reported by a corporation if the services are in fact
provided through the corporation and documentary evidence supports that
fact. Such income will be considered to be income from a personal services
business carried on by the corporation if it meets the definition of "personal
services business". If it does, such income is taxed at full corporate
rates. (If it does not, it may qualify for the small business deduction,
provided the corporation is a Canadian-controlled private corporation.)
Paragraph 125(7)(d) defines the expressions "personal services business"
and "incorporated employee". These definitions deal with situations
where a corporation has been interposed in what would normally constitute
an employee-employer relationship. As a general rule, a corporation will
be treated as carrying on a personal services business where a player:
(a) is, or is related to, a "specified shareholder" of the
corporation, as defined in subsection 248(1), or
(b) provides services to a person or partnership that, in the absence
of the corporation, would reasonably be regarded as the services of an
officer or employee of the person or partnership.
An exception is provided where the corporation employs, throughout the
year, more than five full-time employees or where the services are provided
to an "associated corporation". For a discussion of the terms
"personal services business" and "specified shareholder",
see the current version of IT-73. The meaning of "associated corporation"
is discussed in the current version of IT-64.
8. Paragraph 18(1)(p) restricts the deduction of expenses of a personal
services business of a corporation to:
(a) the remuneration and the cost of other benefits or allowances provided
to an "incorporated employee",
(b) certain expenses of the corporation associated with selling property
or negotiating contracts that are ordinarily deductible from employment
income, and
(c) amounts paid for legal expenses incurred by the corporation in collecting
amounts owing for services rendered.
Paragraph 18(1)(p) ensures that the use of a personal services corporation
does not permit the deduction of an expense which would not have been deductible
had the income been earned directly by the player.
Endorsements and Public Appearances
9. Notwithstanding the above, income from the player's personal endorsements
and public appearances negotiated between the player and third parties
is business income against which necessary and reasonable expenses may
be claimed. The contract may be structured to allow the income to be earned
either directly by the player as business income or by a corporation as
active business income subject to the small business deduction. Expenses
claimed against such income could include costs of negotiating these endorsements
and public appearance contracts, office expenses, travel expenses and accounting
fees. Such income earned by a corporation is not income from a personal
services business
Non-Profit Organizations
IT-496 February 18, 1983
REFERENCE: Paragraph 149(1)(l) (also paragraphs 110(8)(b) and (c),
and sections 149.1 and 168)
1. The purpose of this bulletin is to comment on some of the factors
that are considered when determining whether a club, society or association
is, in a particular taxation year, exempt from income tax pursuant to paragraph
149(1)(l), that is, qualified to be a tax-exempt non-profit organization.
Although a particular organization is qualified to be tax exempt pursuant
to paragraph 149(1)(l), it may, pursuant to subsection 149(5), be subject
to tax on its property income and on certain taxable capital gains. For
the Department's interpretation of subsection 149(5), see IT-83R, "Non-profit
Organizations - Taxation of Income from Property". The Department
considers the expression "club, society or association", used
in paragraph 149(1)(l) (hereinafter referred to as an association) to be
wide enough to include an incorporated company.
2. In general terms, the conditions set out in paragraph 149(1)(l) that
an association must comply with to qualify for exemption are as follows:
(a) it must not, in the opinion of the Minister, be a charity;
(b) it must be organized exclusively for social welfare, civic improvement,
pleasure, recreation or any other purpose except profit;
(c) it must in fact be operated exclusively for the same purpose in
(b) for which it was organized or for any of the other purposes mentioned
in (b); and
(d) no part of its income may be paid, payable or otherwise made available
for the personal benefit of any proprietor, member or shareholder, except
in connection with the promotion of amateur athletics in Canada as described
in 13 below.
3. The fact that a proprietor, member or shareholder of an association
is a tax-exempt non-profit organization or a registered charity, will not
relieve the association of the necessity of complying with the above conditions.
In addition, the conditions to be complied with are neither waived nor
altered by the fact that most or all of the assets and facilities of the
association are leased to a tax-exempt organization or a registered charity.
Where the association maintains that certain of its activities are carried
on in trust for, or as agents for, another association, and the evidence
supports this position, these activities will affect the status of that
other association.
4. If, during a period in a particular year, an association is, in the
opinion of the Minister, a charity within the meaning assigned by subsection
149.1(1), then it cannot qualify in that period as a tax-exempt non-profit
organization. The Department considers this to be so whether or not it
was a registered charity as defined in paragraph 110(8)(c) and, if registered,
whether or not its registration has been revoked pursuant to section 168.
An organization that is a charity as defined in section 149.1 may be exempted
from tax only if it complies with one of the provisions in section 149.
To qualify for exemption under paragraph 149(1)(f), the charity must be
a "registered charity" as defined in paragraph 110(8)(c). For
further information concerning registration of a charity see Information
Circular 80-10, "Registered Charities".
5. To be tax-exempt an association must be both organized and operated
exclusively for social welfare, civic improvement, pleasure or recreation
or for any other purpose except profit. An association may also be organized
and operated exclusively for any combination of these purposes. To establish
the purpose for which an association was organized, the Department will
normally look to the instruments by which it was created. These instruments
may include letters patent, articles of incorporation, memoranda of agreement,
by-laws, articles and so on. In general terms, "social welfare"
means that which provides assistance for disadvantaged groups or for the
common good and general welfare of the people of the community. "Civic
improvement" includes the enhancement in value or quality of community
or civic life. An example would be an association that works for the advancement
of a community by encouraging the establishment of new industries.Under
the categories of social welfare and civic improvement care must be taken
to ensure that the purposes of the association are not those of a charity.
"Pleasure or recreation" means that which provides a state of
gratification or a means of refreshment or diversion. Examples are social
clubs, golf clubs, curling clubs, badminton clubs and so on that are organized
and operated to provide recreational facilities for the enjoyment of members
and their families. The final category of "any other purpose except
profit" is interpreted as a catch all for other associations that
are organized and operated for other than commercial or financial reasons.
6. "Any other purpose except profit" may be used to describe
the aims of an association whose activities are directed toward the general
improvement of conditions within one or more areas of business. An example
of this would be where an association was organized to advance the educational
standards within a particular industry or profession, to publicize, improve
and promote its objectives in a general way and to encourage the exchange
of relevant technical information. If the activities of such an organization
were consistent with these aims, then it would qualify for exemption provided
all other conditions of paragraph 149(1)(l) were complied with in the year.
However, the association will probably not so qualify if it is primarily
involved, for example, in an activity that is directly connected with the
sales of members' goods or services and for such services a fee or commission
computed in relation to sales promoted. Such an association is normally
considered to be an extension of the members' sales organizations and will
be considered to be carrying on a normal commercial operation. "If
the fees and commissions charged are well beyond the needs of the association
and these earnings are accumulated and invested as described in 8 below
by the association, this would be another reason why the association would
not qualify as a non-profit organization exempt from tax.
7. The Department is of the view that an association is not operated
exclusively for non-profit purposes when its principal activity is the
carrying on of a trade or business. Some characteristics of an activity
that might be indicative that it is a trade or business are as follows:
(a) it is a trade or business in the ordinary meaning, that is, it is
operated in a normal commercial manner;
(b) its goods or services are not restricted to members and their guests;
(c) it is operated on a profit basis rather than a cost-recovery basis;
or
(d) it is operated in competition with taxable entities carrying on
the same trade or business.
8. An association may earn income in excess of its expenditures provided
the requirements of the Act are met. The excess may result from the activity
for which it was organized or from some other activity. However, if a material
part of the excess is accumulated each year and the balance of accumulated
excess at any time is greater than the association's reasonable needs to
carry on its non-profit activities (see 9 below), the Department will consider
profit to be one of the purposes for which the association was operated.
This will be particularly so where assets representing the accumulated
excess are used for purposes unrelated to its objects such as the following:
(a) long-term investments to produce property income,
(b) enlarging or expanding facilities used for normal commercial operations,
or
(c) loans to members, shareholders or non-exempt persons.
This may also be the case where the accumulated excess is invested in
a term deposit or guaranteed investment certificate that is regularly renewed
within a year and from year to year, whether or not the principal is adjusted
from time to time.
9. The amount of accumulated excess considered reasonable in relation
to the needs of an association to carry on its non-profit activities is
dependent on such things as the amount and pattern of receipts from various
sources such as membership fees, training course fees, exam fees and so
on. It is conceivable that there would be situations where an accumulation
equal to one year's reasonably anticipated expenditures on its non-profit
activities may not be considered excessive while in another situation an
accumulation equal to two months' reasonably anticipated expenditures would
be considered more than adequate. For example, a year-end accumulation
equal to the following year's anticipated expenditures would probably be
considered reasonable where an association carries out its "annual
fund drive" in the last month of its fiscal period in anticipation
of its non-profit activities planned for the following year. However, where
another association raises its funds on a regular basis throughout the
year, it may be difficult to justify a year-end accumulation in excess
of an amount equal to its expenditures for one or two months. It is noted
that where the present balance of accumulated excess is excessive or an
annual excess is regularly accumulated it may indicate that the association's
aims are two-fold, to earn profits and to carry out its non-profit purposes.
In such a case, the "operated exclusively" test in paragraph
149(1)(l) would not be met.
10. To qualify for exemption, an association must not only be organized
exclusively for non-profit purposes but it must in fact be operated in
accordance with these purposes in each year for which it seeks exemption
under paragraph 149(1)(l). A determination of whether an association was
operated exclusively for and in accordance with its non-profit purposes
in a particular taxation year must be based on the facts of each case which
can be obtained only by reviewing all of its activities for that year.
Such a determination cannot be made in advance of or during a particular
year but only after the end of the year. An association that qualifies
for exemption in a particular year may cease to qualify in a subsequent
year by failing to operate in accordance with one of the purposes specified
in paragraph 149(1)(l), by revising its objectives so that it is no longer
organized in accordance with that provision or by otherwise failing to
meet the requirements of that paragraph. See also IT-409, "Winding-up
of a Non-profit Organization", for the Department's interpretation,
in paragraph 3, as to where an association's tax-exempt status is lost
in this special situation.
11. To qualify for exemption pursuant to paragraph 149(1)(l), no part
of the income of an association, whether current or accumulated, may be
made available for the personal benefit of any proprietor, member or shareholder
of an association (hereinafter referred to as a member). An association
may fail to comply with this requirement in a variety of ways. Some of
these are as follows:
(a) the association distributed income during the year, either directly
or indirectly, to or for the personal benefit of any member;
(b) the association has the power at any time in the current or future
years to declare and pay dividends out of income; or
(c) the association in the case of a winding-up, dissolution or amalgamation
has the power to distribute income to a proprietor, member or shareholder.
The presence of any of the circumstances described in (a), (b) and (c)
would be conclusive evidence that income was payable or available for the
personal benefit of a member, subject to the comments in 12 and 13 below
and in 4 of IT-409 which deals with the distribution of taxable capital
gains to members. To avoid possible difficulties regarding (c), an association
may in its enabling documents provide that upon a winding-up, amalgamation
or dissolution all of its assets and accumulated income are to be transferred
to an organization with similar objects that qualifies for exemption pursuant
to paragraph 149(1)(f) or (l) of the Act.
12. It is the Department's view that certain types of payments made
directly to members, or indirectly for their benefit, will not, in and
by themselves, disqualify an association from being exempted from tax pursuant
to paragraph 149(1)(l). This view applies to payments such as salaries,
wages, fees or honorariums for services rendered to the association, provided
the amounts paid are reasonable and in line with those paid in arm's length
situations for similar services. It also applies to payments made to employees
or members of the association to assist them in covering their expenses
to attend various conventions and meetings as delegates on behalf of the
association, provided attendance at such conventions and meetings is to
further the aims and objectives of the association. In addition, the Department
considers the campaign expenditures of a political party, but not the payments
to a candidate other than reimbursement of reasonable expenses, which will
often result in an indirect benefit for a candidate, are not the type of
personal benefit contemplated by paragraph 149(1)(l) that would cause the
party to be denied exemption under that paragraph.
13. Without disqualifying itself under paragraph 149(1)(l), an association
may distribute income to or for the benefit of any member that was an association
the main purpose and function of which was the promotion of amateur athletics
in Canada. This provision will normally be of particular advantage to a
registered Canadian amateur athletic association that receives amounts
from contributors who claim a paragraph 110(1)(a) deduction for contributions
made to it. To obtain registration, on application to the Minister of National
Revenue pursuant to paragraph 110(8)(b), an association must be both resident
and established in Canada as a non-profit tax-exempt organization according
to paragraph 149(1)(l), and its main purpose and function must be the promotion
of amateur athletics in Canada on a nationwide basis.
14. An association that is tax-exempt pursuant to paragraph 149(1)(l)
is not required to file an annual income tax return unless, in any particular
year, it is a corporation, its income as a deemed trust (per subsection
149(5)) exceeds $500, or the Minister has demanded a return be filed. Although
an association may not be required to file an annual income tax return,
it must still comply with the other requirements of the Income Tax Act.
For example, where such things as salaries and wages are paid, the association
must comply with the withholding and remittance requirements as well as
the requirements concerning the preparation of T4 and other forms.
SPECIAL RELEASE
Non-profit Organizations
IT-496 June 16, 1989
Application
The purpose of this Special Release is to revise Interpretation Bulletin
IT-496 dated February 18, 1983, to make certain changes in paragraphs 4
and 13 as a result of Tax Reform and to clarify paragraph 14. The changes
in paragraphs 4 and 13 reflect the amendments to the Act under which the
tax relief in respect of donations made by individuals is changed, for
1988 and subsequent taxation years, from a deduction in computing taxable
income to a tax credit determined by formula as well as certain related
amendments. Revised paragraph 14 clarifies the circumstances under which
a tax-exempt association is required to file an annual income tax return.
Minor changes have also been made to paragraphs 1 and 4 to update references
to other Interpretation Bulletins and Information Circulars.
Bulletin Revisions
1. In paragraph 1 the reference to IT-83R, "Non-profit Organizations
- Taxation of Income from Property" is replaced by the reference "IT-83R2,
`Non-profit Organizations - Taxation of Income from Property'".
2. To reflect amendments to the law resulting from Tax Reform paragraphs
4 and 13 are replaced by the following:
"4. If, during a period in a particular year, an association is,
in the opinion of the Minister, a charity within the meaning assigned by
subsection 149.1(1), then it cannot qualify in that period as a tax-exempt
non-profit organization. The Department considers this to be so whether
or not it was, before or during that period, a "registered charity"
as defined in subsection 248(1) (formerly defined in paragraph 110(8)(c)
for taxation years before 1988) and, if registered, whether or not its
registration has been revoked at any point pursuant to section 168.
Although an organization that is a charity as defined in subsection
149.1(1) will not be exempted from tax by paragraph 149(1)(l), an exemption
from tax will be available under paragraph 149(1)(f) if the charity is
a registered charity. For further information concerning the registration
of a charity, see the current version of Information Circular 80-10, "Registered
Charities".
"13. Without disqualifying itself under paragraph 149(1)(l), an
association may distribute income to or for the benefit of any member that
is an association the main purpose and function of which is the promotion
of amateur athletics in Canada. This provision will normally be of particular
advantage to a registered Canadian amateur athletic association that receives
gifts from:
(a) corporations that are thereby entitled to a deduction in computing
taxable income under paragraph 110.1(1)(a), or
(b) individuals who, as a result, are entitled to a deduction in computing
tax payable determined by the formula in subsection 118.1(3).
(For taxation years before 1988, individuals and corporations contributing
to registered Canadian amateur athletic associations were entitled to a
deduction under former paragraph 110(1)(a) in computing taxable income.)
To obtain registration, on application to the Minister of National Revenue
as required by the definition of a registered Canadian amateur athletic
association in subsection 248(1) (former paragraph 110(8)(b) for taxation
years before 1988), an association must be both resident and created under
a law in Canada, and must be a non-profit tax-exempt organization described
in paragraph 149(1)(l), whose main purpose and function is the promotion
of amateur athletics in Canada on a nationwide basis."
"14. An association that is tax-exempt pursuant to paragraph 149(1)(l)
is required to file an annual income tax return for each particular year
in which
(a) it is a corporation, or
(b) its income as a deemed trust (per subsection 149(5)) exceeds $500,
or for any particular year in respect of which the Minister has demanded
that it file a return. In the circumstances where an association is not
required to file an annual income tax return, it must still comply with
the other requirements of the Act.
For example, where amounts such as salaries and wages are paid, the
association must comply with the withholding and remittance requirements
as well as the requirements concerning the preparation of T4 and other
forms."
SUBJECT: CANADIAN AMATEUR ATHLETIC
ASSOCIATIONS RECEIPTS - ISSUING POLICY
POLICY PURPOSE:
POLICY
1. The payment by the donor must meet the common-law requirements of
a gift, i.e., it must be a voluntary transfer of property without consideration.
2. In light of paragraph 168(1)(f) of the Income Tax Act, the gift must
be made to the RCAAA, without any implied or express condition or understanding
that it be transferred to a local club or other issued beneficiary2.
3. There can be an agreement whereby the local club raising the funds
receives back a percentage of the funds raised as financing for the club's
activities that are consistent with two RCAAA's over-all purpose, but because
of s. (168)(f) of the Act (see note 9), the specific percentage returned
to the local club must not form part of any solicitation for funds by the
local club, or any agreement with a prospective donor.
4. A significant amount of the monies raised should be retained by the
RCAAA for its own use, for contingencies or to re-distribute to other clubs.
An administration fee basically covering the expenses of receiving the
monies and issuing the receipts is not considered a significant amount
and would tend to indicate that the RCAAA is merely acting as a conduit
for a local club's own purposes.
5. The RCAAA should maintain significant accountability and control
over the issuance of receipts and the amount of funds raised. It is unacceptable
for an RCAAA to "lend" its registration number to a member club.
6. A local club that receives "percentage" funding should
account to the RCAAA and must enable Revenue Canada to verify whether receipts
are issued according to the Act and this policy3.
In light of the widespread practice of soliciting contributions from parents
whose children receive direct support from the clubs, an RCAAA should require
as part of its granting policy, that accounting from local clubs include
the names of all those athletes who receive subsidized training. If during
the course of an investigation the Department uncovers any substantial
abuse at the local level under paragraph (1) above, the RCAAA will be deemed
to have failed meeting the requirements of paragraph 166(1)(s) and subsection
230(2) of the Act unless it demonstrated to the Department's satisfaction
that it had proper mechanisms in place to reasonably ensure the proper
issuance of receipts.
7. Receipt-issuing should, if required, be delegated to a subordinate
body at the provincial level only. It should not be sub-delegated by a
provincial level association to member-clubs without the RCAAA's consent.
The RCAAA must maintain direction and control over the receipt-issuing
policies.
1 Supplied
by Revenue Canada.
2 S. 168(1)
(f) of the Act states that the Minister may propose the revocation
of a registered Canadian amateur athletic association where the association
". . . accepts a gift or donation the granting of which was expressly
or impliedly conditional on the association making a gift or donation to
another person, club, society or association".
3 Subsection
230(2) I.T.A.: "Every (. . .) registered Canadian amateur athletic
association shall keep records and books of account at an address in Canada
recorded with the Minister or designated by the Minister containing:a)
Information in such form as will enable the Minister to determine whether
there are any grounds for the revocation of its registration under this
Act;b) A duplicate of each receipt containing prescribed information for
a donation received by it; andc) Other information in such form as will
enable the Minister to verify the donations to it for which a deduction
or tax credit is available under this Act.