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The Federal Court of Appeal has upheld a decision to revoke the Humane Society of Canada’s registration as a charitable organization, in part because it allegedly reimbursed its executive director for about $70,000 in personal expenses.
The court’s Nov. 17 decision is the latest development in a long-running legal dispute between the Canada Revenue Agency and the Toronto-based charitable organization, which was incorporated in 1993 and whose full legal name is the Humane Society of Canada for the Protection of Animals and the Environment.
Despite its name, the Humane Society of Canada is not the national voice for humane societies in this country. That distinction rests with the Canadian Federation of Humane Societies, which represents 52 societies and SPCAs across Canada. The Humane Society of Canada is not among its members.
20 HumaneThe dispute began in 2007, when the CRA did an audit of the humane society’s books for the 2006 taxation year.
According to the Federal Court decision, the audit found that a “large portion” of the society’s resources did not seem to have been devoted to charitable purposes.
It also found that the society reimbursed executive director Michael O’Sullivan for more than $250,000 in expenses, including about $70,000 that the CRA categorized as personal expenses.
Included in that amount, the court’s decision says, were “a large number of personal meal expenses, the cost of comic books purchased through PayPal, liquor purchases from the LCBO, grocery purchases, tickets to entertainment events in the UK and the USA, and expenses of Mr. O’Sullivan and his family at Disneyland.”
Moreover, the humane society’s books and records didn’t separate O’Sullivan’s personal expenditures from its charitable spending, and did not demonstrate a direct linkage between the society’s spending and its charitable activities, the audit found.
The minister of national revenue issued a notice of intention to revoke the humane society’s charitable status in 2010, a decision confirmed in 2013 by the CRA’s Appeals Directorate.
The Appeals Directorate cited three reasons for its decision: the humane society had failed to devote all of its resources to charitable activities; it had provided some of its income for the “personal benefit” of O’Sullivan; and it had failed to keep appropriate books and records.
In 2012, lawyers for the society confirmed that the society had “inadvertently” reimbursed O’Sullivan for about $22,000 in personal expenses, the appeal court’s decision says.
Despite that, the CRA Appeals Directorate “remained of the view that at least $69,343.81” of the reimbursements were personal expenses of O’Sullivan.
The Appeals Directorate also rejected the humane society’s assertion that the comic books purchased by O’Sullivan were “investment assets.”
At the appeal court hearing in May, the humane society’s lawyers argued that the minister could not legally revoke its charitable status and could only impose a penalty on the amount paid to O’Sullivan as personal benefits. That argument was summarily rejected by the court.
The panel of judges also examined each of the three reasons cited by the CRA’s Appeals Directorate and concluded that, based on those grounds, the revocation decision was reasonable.
The Citizen sought comment on the decision from the Humane Society of Canada’s lawyers in Vancouver, but received no response.
dbutler@ottawacitizen.com
twitter.com/ButlerDon
查看原文...
The court’s Nov. 17 decision is the latest development in a long-running legal dispute between the Canada Revenue Agency and the Toronto-based charitable organization, which was incorporated in 1993 and whose full legal name is the Humane Society of Canada for the Protection of Animals and the Environment.
Despite its name, the Humane Society of Canada is not the national voice for humane societies in this country. That distinction rests with the Canadian Federation of Humane Societies, which represents 52 societies and SPCAs across Canada. The Humane Society of Canada is not among its members.
20 HumaneThe dispute began in 2007, when the CRA did an audit of the humane society’s books for the 2006 taxation year.
According to the Federal Court decision, the audit found that a “large portion” of the society’s resources did not seem to have been devoted to charitable purposes.
It also found that the society reimbursed executive director Michael O’Sullivan for more than $250,000 in expenses, including about $70,000 that the CRA categorized as personal expenses.
Included in that amount, the court’s decision says, were “a large number of personal meal expenses, the cost of comic books purchased through PayPal, liquor purchases from the LCBO, grocery purchases, tickets to entertainment events in the UK and the USA, and expenses of Mr. O’Sullivan and his family at Disneyland.”
Moreover, the humane society’s books and records didn’t separate O’Sullivan’s personal expenditures from its charitable spending, and did not demonstrate a direct linkage between the society’s spending and its charitable activities, the audit found.
The minister of national revenue issued a notice of intention to revoke the humane society’s charitable status in 2010, a decision confirmed in 2013 by the CRA’s Appeals Directorate.
The Appeals Directorate cited three reasons for its decision: the humane society had failed to devote all of its resources to charitable activities; it had provided some of its income for the “personal benefit” of O’Sullivan; and it had failed to keep appropriate books and records.
In 2012, lawyers for the society confirmed that the society had “inadvertently” reimbursed O’Sullivan for about $22,000 in personal expenses, the appeal court’s decision says.
Despite that, the CRA Appeals Directorate “remained of the view that at least $69,343.81” of the reimbursements were personal expenses of O’Sullivan.
The Appeals Directorate also rejected the humane society’s assertion that the comic books purchased by O’Sullivan were “investment assets.”
At the appeal court hearing in May, the humane society’s lawyers argued that the minister could not legally revoke its charitable status and could only impose a penalty on the amount paid to O’Sullivan as personal benefits. That argument was summarily rejected by the court.
The panel of judges also examined each of the three reasons cited by the CRA’s Appeals Directorate and concluded that, based on those grounds, the revocation decision was reasonable.
The Citizen sought comment on the decision from the Humane Society of Canada’s lawyers in Vancouver, but received no response.
dbutler@ottawacitizen.com
twitter.com/ButlerDon
查看原文...
