False Receipting
January 25, 2008
There is a growing concern from Canada Revenue Agency (CRA) regarding the discovery of false receipts when auditing individuals’ income tax returns. Some of the false receipts have been produced by the charities themselves, but the majority have been created by others without the charity even being aware of the scheme.
The Canadian Council of Christian Charities advises charities to take extra care with their official income tax receipts. Not only is it important to keep proper books and records of all donations that come in throughout the year, so that at year end, accurate receipts can be issued, but also that amounts can be verified if reviewed or audited by CRA.
It is equally important to maintain adequate internal controls to restrict access to the receipts and related software programs. All blank receipts should be kept in a fireproof safe or at a minimum, under lock and key in a secure storage room. Computer programs should be password protected with access restricted to those that are responsible for issuing the receipts.
As a charity, you may receive a call from CRA asking you for the name and amount on a particular receipt number. This is one way they determine if a taxpayer’s receipt is valid or not. We recommend that you provide the information requested. This will assist CRA deal with false receipts.
