The Appellants, registered charities operating alternative Christian programs in public schools, applied under Rule 58 to determine whether program fees paid by parents were voluntary and whether parents received a benefit in return.
The Minister had levied penalties under s. 188.1(7) of the Income Tax Act, arguing the fees were not gifts and donation receipts should not have been issued.
The Tax Court held that the payment of fees was not voluntary, as it was a contractual condition of enrolment.
Furthermore, the parents received a benefit or consideration in return for the fees, as the payments secured the desired Christian education program for their children.
