Replacing Donation Receipts
Kate Lazier, Toronto
From time to time a charitable tax receipt needs to be
replaced. The procedure for issuing
replacement receipts depends on whether the first receipt was lost, spoiled or
needs to be cancelled due to a return of the gift.
Lost
receipt
Where a donor has lost the first receipt issued, the
charity can issue a replacement receipt.
The replacement receipt must contain all the required
information for a receipt plus the
serial number of the lost receipt. The
replacement receipt should state that it "cancels and replaces the lost
receipt."
A charity must keep duplicate copies of the receipts
issued. The charity's copy of the
donor’s lost receipt should be kept and marked "cancelled." The charity should keep copies of the new and
old receipts in the charity's books and records. The CRA does not require a report of this
transaction.
Spoiled
receipt
Where there is a mistake on the first receipt issued
and therefore the first receipt is spoiled, a charity can issue a new
receipt. The charity should collect the
original receipt back from the donor and keep both copies (the donor’s and
charity’s) in its records. The original
receipts should be marked "cancelled".
The replacement receipt should state that it
"cancels and replaces the lost receipt." CRA does not require a
report of this transaction. However, the charity should keep the copies of the
spoiled and new receipt in the charity's books and records.
Returned
Gift
Under common law, it is rare that a charity can legally
return a gift. See our March
2011 newsletter for more on this topic.
However, if the charity does return a gift and the
gift is worth at least $50.00, then the charity has an obligation to report the
return of gift to CRA not later than 90 days after the property is returned.
Currently, there is no CRA form for this report. However, the Regulations to the Income Tax
Act state the information return shall include the following information:
- a detailed description of the property;
- the fair market value of the transferred
property at the time of the transfer;
- the date of which the property was
transferred;
- the name and address of the transferee of
the property including, in the case of an individual, their first name and
initial; and
- if the transferor of the property, or a
person not dealing at arm's length with the transferor, issued the original
receipt, then include the information contained in the original receipt.
The lawyers in the charities group at Miller Thomson
LLP can assist charities with issues around receipts and reporting to CRA.
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