A volunteer fire department near Truro is grappling with a massive bill from the Canada Revenue Agency after forgetting to file the proper paperwork as a registered charity.

More than 30 volunteers keep Brookfield Volunteer Fire Department running. But Fire Chief Rod Nielsen said even the most dedicated volunteers make mistakes.

"It all began in 2008 when our treasurer was very ill and we lapsed on our returns, our annual returns," he explained. "The rules for eligibility to be a charitable organization had changed and we didn't fit the formula."

Nielsen said they received a notice from the Canada Revenue Agency giving them two options: hand over all of the department's assets to a registered charity in good standing or give a percentage of the assets to the revenue agency. That amounts to about $555,000.

Former fire chief Mike Watson said that’s the unit's entire operating budget for a year.

"They'll lose the fire department, I would guess. They said they would seize assets, probably the assets don't add up to $500,000," said Watson.

Others in the small town just outside of Truro are shocked to hear about the troubles.

"I realize that the government has to take a stand but I think it's pretty disgusting that they couldn't have worked with them when they first found out about it," said Carole Phee.

The idea that the volunteer fire department is no longer considered a charity is also puzzling to some.

"People are volunteering their time and all their money is going into their equipment and the things they need to put out fires," said Cindy Hall.

Payment is due March 21, but Nielsen says they haven't given up hope. They're applying once again to have their status as a charity reinstated.

The Canada Revenue Agency wouldn't comment citing privacy reasons, except to confirm that the volunteer fire department did lose its charitable status after failing to file the necessary returns.