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Canada charity loses tax-exempt status

May 11, 2010

The Islamic group known as IRFAN has been stripped of its tax-exempt status for one year by Canada’s federal tax agency.  (Although the suspension hasn’t stopped IRFAN from soliciting donations through its website—it’s just that Ifran’s donors won’t receive a tax deduction for their contributions.)  IRFAN raises zakat among Canadian Muslims and transfers the revenues abroad and, at least in the past, helped fund Hamas.

IRFAN used to be known as the The Jerusalem Fund for Human Services which was affiliated with Union of Good, the network of charities formed by Yusuf al-Qaradawi to fund Hamas.  Union of Good affiliates have been designated by the U.S. Treasury Department for funding terrorism.

From the Jewish Tribune on Apr. 27:

OTTAWA – The Canada Revenue Agency (CRA) suspended the authority of the International Relief Fund for the Afflicted and Needy (IRFAN)-Canada to issue charity receipts on April 13. The suspension is to last one year. The CRA said in a press release that the charitable organization failed to comply with Income Tax Act requirements for book-keeping and audits.

“A charity that has been suspended has no authority to issue donation receipts for income tax purposes for gifts it may receive during its suspension,” said the government agency in its release. “Also, during the suspension, the charity is deemed not to be a qualified donee, prohibiting other registered charities from making gifts to it during that period.”

Based in Mississauga, IRFAN describes itself on its web site as an “international relief and humanitarian, non-profit, charitable organization, registered in Canada since 1998 and actively involved in the alleviation of human suffering.” It adds that it was established “to cope with the greater demands of the needy in the world.” It purports to help the poor in numerous countries including ‘Palestine,’ Lebanon, Afghanistan, Iraq, Algeria, Guyana, Sudan, Pakistan, South Asia, Niger, Albania, Algeria, Bosnia, Jordan, Sierra Leone and even Canada.

But there is more to the story, even if the federal government can’t discuss it.

“There is very little we can say about any particular taxpayer,” Caitlin Workman, a CRA spokesperson, explained to the Jewish Tribune. “The privacy laws in the Income Tax Act forbid us from saying much at all.”

Though IRFAN-Canada denies it, and though it launched a defamation lawsuit to clear its name, there have been allegations that the organization is a fundraising front for Hamas, including a 20004 report by the Israeli Intelligence and Terrorism Information Centre (IITIC).More recently, according to an article in the internet-based Global Muslim Brotherhood Daily Report, in May 2007, IRFAN-Canada “was named by US prosecutors as part of the Global Hamas financing mechanism in the Holy Land terrorism financing trial.”

But that is all separate from the CRA’s decision to suspend charitable status, says Naseer Syed, a Toronto-based lawyer for IRFAN. “That is not the issue at hand.”

Though he may be right in the narrow legal sense, a 24-page letter from CRA to IRFAN lawyer Terrance Carter, dated April 6, 2010, makes several references to the government’s continued concerns about IRFAN alleged ties to terrorist groups.

“I respect you as a journalist,” Syed said, “and I think it is important to be up front. The [IITIC] report is from 2004 and it was first raised in Canada by [now-Treasury Board President] Stockwell Day and the Canadian Coalition for Democracies at a press conference. There is a lawsuit that stemmed from the report and the statements.

“So our response to the report is stated in the statement of claim.” As the plaintiff in the $12-million suit, IRFAN called press conference statements that it was misleading and abusing the tax system “false and malicious.” Rumours are that the lawsuit will be settled soon.

Syed said there is no need to get back into discussions about those allegations, “and the fact that others are recycling that stuff is unfortunate.”

With respect to the charitable status suspension, Syed notes that “it is a relatively new power that the CRA has. Previously, their only power was revocation. They had a big hammer as opposed to a smaller hammer.” In other words, he notes, it is a big relief that their status was suspended and not revoked.

“But we were disappointed with the suspension,” he continues. “We disagree with some of the allegations in the suspension. Some of them are a matter of interpretation.

Reasonable people can disagree. And, of course, the third parties in other countries may be subject to different laws. We are cooperating with the CRA and trying to get duplicate documents from third parties.” He adds that this can be difficult.

“The audit continues,” said Syed, “and we hope to have the matter resolved soon in a positive way. That is the extent of the problem.”

One comment

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