CRA Charities Audit — Montreal CPA Firm Near You: Keep Registration Secure

A CRA Charities Audit (Registered Charity Review) is a formal examination conducted by the Canada Revenue Agency’s Charities Directorate to verify that your organization continues to meet the legal requirements for charitable registration. These audits focus on whether funds are used for charitable purposes, donation receipts are issued correctly, and political activities remain within allowable limits. Mackisen CPA Montreal provides full audit representation, governance correction, and compliance defense to help charities maintain their registration, reputation, and donor trust.

Legal Foundation

Law: Income Tax Act s. 149.1 — defines eligibility and ongoing requirements for charitable registration; CRA Policy CPS-024 — Registered Charities: Audits, Sanctions, and Revocations.
Jurisprudence: Human Life International in Canada Inc. v. M.N.R. (1998 FCA) — confirmed that charities must devote “substantially all” of their resources to charitable activities and maintain direct control over how funds are used domestically and abroad.

Learning insight: CRA doesn’t audit generosity — it audits governance.

Why CRA Audits Charities

The CRA Charities Directorate performs random and targeted audits to ensure registered organizations:

1. Operate exclusively for charitable purposes (relief of poverty, advancement of education, religion, or community benefit).

2. Keep proper books and records under Income Tax Act s. 230(2)(a).

3. Issue official donation receipts that meet form and content requirements.

4. Avoid ineligible or political activities beyond permitted limits (less than 10% of resources).

5. Maintain control over funds transferred to partners or affiliates.

Mackisen CPA Montreal helps charities demonstrate these conditions through documentation, policies, and transparent accounting practices.

Learning insight: Charitable status isn’t permanent — it’s a privilege renewed through every audit cycle.

What Mackisen CPA’s Charities Audit Defense Includes

• Comprehensive review of governance policies, board minutes, and compliance controls.

• Verification of donation receipts (official form, serial number, and eligible amount).

• Audit of foreign disbursements and grants to ensure direction and control.

• Reconciliation of administrative vs. program spending ratios.

• Preparation of T3010 annual return amendments if required.

• Communication with CRA auditors to clarify findings and negotiate compliance agreements.

Learning insight: A charity’s strength is transparency. When your records show clarity, your compliance shows credibility.

Common Triggers for CRA Charities Audits

• Inconsistent or incomplete T3010 filings.

• High administrative or fundraising costs relative to program expenditures.

• Excessive or repeated foreign transfers without documentation.

• Ineligible receipting (gifts-in-kind, split receipting errors).

• Anonymous complaints, media reports, or political involvement.

Mackisen CPA Montreal identifies these risk factors early and implements corrective strategies before they attract regulatory scrutiny.

Learning insight: CRA doesn’t need a reason to audit — just a red flag. Mackisen CPA removes the red before it becomes a flag.

How Mackisen CPA Manages Charity Audits

1. Conducts a pre-audit compliance review of all program and financial activities.

2. Prepares a documentation binder matching CRA’s Books and Records Checklist.

3. Analyzes fundraising ratios and administrative-cost allocations for reasonableness.

4. Drafts responses to CRA’s initial audit questionnaire with legal and accounting support.

5. Coordinates post-audit corrective actions to close the file with no revocation risk.

Learning insight: Charities that prepare before the audit often pass in a single review.

Penalties and Sanctions for Non-Compliance

• Suspension of Receipting Privileges: Up to one year for repeated receipting errors.

• Financial Penalties: 5%–10% of improperly receipted donations.

• Revocation of Status: Permanent loss of registration, with a revocation tax equal to 100% of remaining assets.

Learning insight: Every compliance dollar invested today prevents ten dollars in penalties tomorrow.

SEO Optimization and Learning Value

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Learning insight: CRA audits focus on trust — not faith. Mackisen CPA helps you prove that your organization earns it.

Real Client Success

• A Montréal foundation avoided revocation when Mackisen CPA provided evidence of direct control over foreign partners through board resolutions.

• A national education charity cleared a 3-year CRA audit after our team rebuilt donation-receipt records and corrected administrative allocations.

• A community organization reinstated receipting privileges when we resolved split-receipting and gift-in-kind compliance errors.

Learning insight: CRA doesn’t expect perfection — it expects proof. Mackisen CPA delivers both.

Why Mackisen CPA Montreal

Mackisen CPA Montreal has over 35 years of combined experience in charity and non-profit accounting, specializing in compliance with CRA and Revenu Québec regulations. Our bilingual team combines financial transparency, legal awareness, and audit readiness — helping organizations keep their charitable registration secure while optimizing governance systems for long-term sustainability.

Learning insight: Every registered charity has two missions — its cause and its compliance. Mackisen CPA ensures both succeed.