As part of a review of all tax shelter-related donation arrangements, the Canada Revenue Agency has revoked the charitable registration of the Pinnacle Foundation, a Vancouver-area charity, the agency announced on Monday.

The CRA issued a notice of intent to revoke the charitable registration in early October because the primary activity of the charity appeared to be “issuing tax receipts in support of the donation arrangement and in amounts supplied by the donation arrangement promoters.”

According to the Web site of the Pinnacle Foundation, it aims to assist social and cultural institutions in health and fitness, education and the arts; to provide Canadian communities with the necessary support to meet new challenges; and to encourage and promote generosity and voluntary action.

CRA found that no charitable activities had been conducted by the foundation before or after its participation, aside from the gifting of approximately $18,000 to qualified donees. The charity’s directors advised CRA that no further activities are planned.

As a result of the charity’s participation in the donation arrangement, it has received minimal rental income from the timeshare units. It received $20,253 in rental income in 2004 and gifted approximately $18,000 to qualified donees in 2005 despite issuing official donation receipts for cash and property in excess of $6.7 million.

A charity that has had its charitable status revoked can no longer issue donation receipts for income tax purposes and is no longer a qualified donee under the Income Tax Act. The charity is no longer exempt from income tax, unless it qualifies as a non-profit organization, and it may be subject to a tax equal to the full value of its remaining assets.

The CRA is reviewing all tax shelter-related donation arrangements, including schemes that promise donors tax receipts worth more than the actual amount of the donation. It plans to audit every participating charity, promoter, and investor.

Earlier this month, the agency revoked the charitable registration of the Choson Kallah Fund of Toronto on similar grounds: for “operating primarily or collaterally for the purpose of furthering a tax shelter donation arrangement.”