Canadian Muslim Charity Takes CRA to Court

Canadian Muslim Charity Takes CRA to Court

MAC is a registered charity and a national not-for-profit organization that operates a network of schools, mosques, student programs, community centers. It describes itself as the largest Muslim charity in Canada. It has a multimillion-dollar annual budget derived from tax deductible donations. MAC

 In 2015, the Canada Revenue Agency commenced an audit of MAC covering the period from July 1, 2012, to June 30, 2015. On March 17, 2021, the CRA issued a 151-page Administrative Fairness Letter to MAC. According to the CRA, the purpose of the AFL was to describe the areas of MAC’s noncompliance with certain legislative and common law requirements applicable to registered charities.

The CRA stated that its preliminary audit findings established sufficient grounds to revoke the MAC’s charity registration under s. 168(1) of the Income Tax Act, and to impose penalties totaling $1,312,542.[1]

CRA provided:

over 500 pages of emails referred to in the AFL and collected from MAC during the audit process;

summary of emails it obtained from MAC that purportedly connected MAC with the Syrian Muslim Brotherhood

the CRA’s assessment of the personal online activities of some of MAC’s members;

financial information relating to schools operated by MAC, costs for MAC’s Eid celebrations, and information found on MAC’s T3010 registered charity information return

MAC’s position

MAC submits that the CRA has undertaken the audit in a manner that infringes the Charter. The main work product of the audit to date is the AFL, which, MAC argues, trades in common anti-Muslim stereotypes and manifests the very discriminatory lens through which the entire audit has been conducted. MAC submits that the CRA makes unproven and untested allegations (which may be retracted in the future) that MAC and certain of its members are affiliated with potential terrorist entities that are subject to foreign control or influence. Further, MAC argues that the CRA makes improper and erroneous assertions in the AFL that are demeaning to the practice of Islam.

Attorney General of Canada’s position

The Attorney General notes that, as part of its Charter challenge and in numerous statements to the media, MAC has made serious allegations about the conduct of the CRA. Court proceedings are presumptively open and the public and the media should be able to see not only MAC’s allegations and the parties’ positions, but also the full content of the AFL.