LNCDA charity status revoked after 33 years
It was a somber roomful at the Little Narrows Community Centre the evening of Dec. 18 as the Executive Committee for Little Narrows Community Development Association (LNCDA) broke some disappointing news to local residents.
Calvin Macinnis (President), Brenda Macneil (Vice President), Georgina Macleod (Secretary), and Johnny Angus Matheson (Treasurer) informed the roughly twenty gathered that the Canada Revenue Agency (CRA) revoked LNCDA’S status as a charitable organization (effective Mar. 3, 2014) for failing to file its taxes. LNCDA last filed a tax return in 2011. Macneil read aloud CRA correspondence outlining the consequences of failing to file and the remaining steps the association must now take to avoid sheriff seizure and sale of the LNCDA assets. Assets include the Little Narrows Community Centre and the Iona Fire Department substation.
“We have absolutely nothing. The next time we want to have a benefit, or we want to have a Christmas social, or whatever, we have absolutely nothing. That’s the situation we're in right now. That's terrible. It's devastating that we've come to this point. I don't see that there is a way out. But we need to know where we're going to go from here,” said one local resident turning to others in the room for input.
A charitable organization whose status is revoked must pay a revocation tax equal to 100% of the value of all remaining assets unless they apply for, and regain, charitable status. When the LNCDA re-applied, they learned their mandate fell outside the CRA’S four eligibility categories - relieving poverty, advancing education, advancing religion, or other purposes benefiting the community (see the Government of Canada’s “General requirements for charitable registration”, issued Nov. 2, 2012). The association is now left with only one choice: pay the revocation tax of $214,033 or donate the property to an eligible organization that would keep the property in the charitable sector.
The executive committee believes the property value is lower than the revocation tax evaluated by the CRA. The group has enlisted the help of Paul Harvey of Estmere to arrange for a reassessment, and is awaiting results.
For now, assets appear safe from sheriff seizure as long as the executive committee demonstrates progress toward donating the association’s assets to eligible organizations. Macneil is tasked with checking in with CRA on a monthly basis. The executive also plans to reach out to their elected representatives in a last-ditch effort to reverse the process.
The LNCDA became a registered charity on Jan. 1, 1981. According to the association’s 2011 Registered Charity Information Return, its programming includes operating a year-round community centre, providing recreational facilities, beach, tennis, basketball court & boat launch, operating a year-round first response fire and rescue shelter, and conducting a fund raising activities.