As the end of another year approaches, it is timely for charities to be reminded of common mistakes that occur when filing their annual T3010B Registered Charity Information Returns. The Return must be filed within six months after a charity’s fiscal year end. The Canada Revenue Agency provides on its website a list of common mistakes made when filing the T3010B Return. Charities should strive to avoid these mistakes, as they can cause processing delays, missing returns and incorrect disbursement quota calculations.
In addition to the T3010B Return, charities must also attach Form TF725 Registered Charities Basic Information Sheet, and Form T1235 Directors/Trustees and Like Officials Worksheet. If the charity has made gifts to qualified donees, the charity must also attach Form T1236 Qualified Donees Worksheet/Amounts Provided to Other Organizations. A private foundation that at any time in the year held greater than 2% of any share class of a corporation must attach a separate Form T2081 Excess Business Holdings Worksheet for Private Foundations for each such class of shares.
The most common mistakes when filing the Return include the following:
- The Return is mailed to an address other than the Charities Directorate. The correct address for filing a Return is: Charities Directorate Canada Revenue Agency Ottawa, Ontario K1A 0L5;
- The Return is filed on the wrong form – all charities with fiscal year ending on or after January 1, 2009 should be using the T3010B Return;
- The financial statements are not attached or do not have the same fiscal year end as the T3010B Return;
- Form TF725 Registered Charity Basic Information Sheet is not attached;
- Fundraising activities of the charity are not described in Section C2 of the T3010B Return;
- Director/trustee dates of birth are missing from Form T1235 Directors/Trustees and Like Officials Worksheet;
- Directors/trustees’ arm’s length status is missing from Form T1235;
- Directors/trustees’ postal codes are missing from Form T1235;
- Qualified Donees’ BN/Registation numbers are missing from Form T1236;
- The Certification area in Section E of the T3010B Return is not signed.
To report financial information, charities can complete Section D or Schedule 6, depending on the criteria set out on the T3010B Return. Common mistakes where the charity has completed Section D include:
- lines 4500 to 4650 do not add up to the amount on line 4700;
- lines 4860 to 4920 do not add up to the amount on line 4950;
- there is no entry on line 5000 for charitable program expenditures. If the charity has completed Schedule 6, common mistakes include:
- lines 4500, 4510 to 4580, and 4600 to 4650 do not add up to the amount on line 4700;
- lines 4950, 5050, 5060 and 5070 do not add up to the amount on line 5100;
- there are entries on lines 5500 to 5520 when the charity has not been granted permission to accumulate funds;
- there are no entries on line 5900 and 5910 when required.
CRA has published Guide T4033B Completing the Registered Charity Information Return to assist charities in completing the Return properly. In addition, the CRA website includes detailed instruction on completing the Return, along with sample completed Returns for guidance.