Religious, Charitable, etc., Institutions and Community Chest

Department of the Treasury
Internal Revenue Service
RS
Tax Exempt and Government Entities
I
ExetnDt Ore:anizations Examinations
Release Number: 202321007
Release Date: 5/26/2023
UIL Code: 501.03-00
CERTIFIED MAIL - Return Receipt Requested Dear
Why we are sending you this letter
Date:
February 23, 2023
Taxpayer ID number (last 4 digits):
Form:
Tax periods ended:
Person to contact:
Name:
ID number:
Telephone:
Fax:
Lut day to file petition with United states
Tax Court:
May 24, 2023
This is a fmal detennination that you don't qualify for exemption from federal income tax under Internal Revenue Code (IRC) Section 501(a) as an organization described in IRC Section 50l(c)(3), effective . Your detennination letter dated , is revoked.
Our adverse detennination as to your exempt status was made for the following reasons: You have failed to produce documents to establish that you are operated exclusively for exempt pmposes within the meaning of IRC Section 501(c)(3), and that no part of your net earnings inure to the benefit of private shareholders or individuals. Also, you have failed to keep adequate books and records as required by IRC Section 6001 and the regulations thereunder.
Organizations that are not exempt under IRC Section 501 generally are required to file federal income tax returns and pay tax, where applicable. For further instructions, fonns and infonnation please visit IRS.gov.
Contributions to your organization are no longer deductible under IRC Section 170.
What you must do if you disagree with this determination If you want to contest our fmal detennination, you have 90 days from the date this detennination letter was mailed to you to file a petition or complaint in one of the three federal courts listed below.
How to file your action for declaratory judgment
If you decide to contest this detennination, you can file an action for declaratory judgment under the provisions of Section 7428 of the Code in either:
• The United States Tax Court,
• The United States Court of Federal Claims, or
• The United States District Court for the District of Columbia You must file a petition or complaint in one of these three courts within 90 days from the date we mailed this detennination letter to you. You can download a fillable petition or complaint form and get infonnation about filing at each respective court's website listed below or by contacting the Office of the Clerk of the Court at one of the addresses below. Be sure to include a copy of this letter and any attachments and the applicable filing fee with the petition or complaint. catalog Number 74808E You can eFile your completed U.S. Tax Court petition by following the instructions and user guides available on the Tax Court website at ustaxcourt.gov/dawson.html. You will need to register for a DAWSON account to do so. You may also file your petition at the address below:
United States Tax Court
400 Second Street, NW
Washington, DC 20217 ustaxcourt.gov
The websites of the U.S. Court of Federal Claims and the U.S. District Court for the District of Columbia contain instructions about how to file your completed complaint electronically. You may also file your complaint at one of the addresses below:
US Court of Federal Claims
717 Madison Place, NW
Washington, DC 20439 uscfc.uscourts.gov
US District Court for the District of Columbia
333 Constitution Avenue, NW
Washington, DC 20001 dcd.uscourts.gov
Processing of income tax returns and assessments of any taxes due will not be delayed if you file a petition for declaratory judgment under IRC Section 7428.
Information about the IRS Taxpayer Advocate Service
The IRS office whose phone number appears at the top of the notice can best address and access your tax information and help get you answers. However, you may be eligible for free help from the Taxpayer Advocate Service (TAS) if you can't resolve your tax problem with the IRS, or you believe an IRS procedure just isn't working as it should. T AS is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Contact your local Taxpayer Advocate Office at:
Internal Revenue Service
Or call TAS at 877-777-4778. For more information about TAS and your rights under the Taxpayer Bill of Rights, go to taxpayeradvocate.IRS.gov. Do not send your federal court pleading to the TAS address listed above.
Use the applicable federal court address provided earlier in the letter. Contacting TAS does not extend the time to file an action for declaratory judgment.
Where you can find more information
Enclosed are Publication 1, Your Rights as a Taxpayer, and Publication 594, The IRS Collection Process, for more comprehensive information.
Find tax forms or publications by visiting IRS.gov/forms or calling 800-TAX-FORM (800-829-3676). If you have questions, you can call the person shown at the top of this letter.
If you prefer to write, use the address shown at the top of this letter. Include your telephone number, the best time to call, and a copy of this letter.
Catalog Number 74808E
You may fax your documents to the fax number shown above, using either a fax machine or online fax service.
Protect yourself when sending digital data by understanding the fax service's privacy and security policies.
Keep the original letter for your records.
Enclosures:
Publication 1
Publication 594
Publication 892
Sincerely,
{~ ~~
-
~A.Brinkley
Director, Exempt Organizations Examlnatiom Catalog Number 74808E
Department of the Treasury
Internal Revenue Service
IRS Tax Exemot and Government Entitles
CERTIFIED MAIL - Return Receipt Requested Dear
Why you're receil'ing this letter
Date:
September 29, 2022
Taxpayer ID number:
Form:
Tax periods ended:
Person to contact:
Name:
ID number:
Telephone
Fax:
Address:
Manager's contact information:
Name:
ID number:
Telephone:
Response due date:
October31,2022
We enclosed a copy of our audit report, Form 886-A, Explanation ofltems, explaining that we propose to revoke your tax-exempt status as an organization described in Internal Revenue Code (IRC) Section 50l(c)(3).
If you agree
If you haven't ah·eady, please sign the enclosed Form 6018, Consent to Proposed Action, and return it to the contact person shown at the top of this letter. We'll issue a final adverse letter determining that you aren't an organization described in IRC Section 501(c)(3) for the periods above.
After we issue the final adverse determination letter, we'll announce that your organization is no longer eligible to receive tax deductible contributions under IRC Section 170.
If you disagree
1. Request a meeting or telephone conference with the manager shown at the top of this letter.
2. Send any infom1ation you want us to consider.
3. File a protest with the IRS Appeals Office. If you request a meeting with the manager or send additional infomiation as stated in I and 2, above, you'll still be able to file a protest with IRS Appeals Office after the meeting or after we consider the infomiation.
The IRS Appeals Office is independent of the Exempt Organizations division and resolves most disputes infomially. If you file a protest, the auditing agent may ask you to sign a consent to extend the period of limitations for assessing tax. This is to allow the IRS Appeals Office enough time to consider your case.
For your protest to be valid, it must contain certain specific information, including a statement of the facts, applicable law, and arguments in support of your position. For specific infomiation needed for a valid protest, refer to Publication 892, How to Appeal an IRS Detemrination on Tax-Exempt Status.
Catalog Number 34809F
Fast Track Mediation (FTM) referred to it1 Publication 3498, The Examination Process, generally doesn't apply now that we've issued this letter.
4. Request technical advice from the Office of Associate Chief Counsel (Tax Exempt Govermnent Entities) if you feel the issue hasn't been addressed in published precedent or has been treated inconsistently by the IRS.
If you're con.'>idering requesting teclmical advice, contact the person shown at the top of this letter. If you disagree with t11e technical advice decision, you will be able to appeal to the IRS Appeals Office, as explained above. A decision made in a technical advice memorandmn, however, generally is final and binding on Appeals.
H we don't hear from you
If you don't respond to this proposal within 30 calendar days from the date of this letter, we'll issue a final adverse determination letter.
Contacting the Taxpayer Advocate Office is a taxpayer right The Taxpayer Advocate Set. Vice (TAS) is an independent organization within the IRS that can help protect your taxpayer rights. TAS can offer you help if your tax problem is causing a hardship, or you've tried but haven't been able to resolve your problem with the IRS. If you qualify for TAS assistance, which is always free, TAS will do everything possible to help you. Visit www.taxpayeradvocate.irs.gov or call 877-777-4778.
Additional information
You can get any of the fonns and publications mentioned in this letter by visiting our website at www.irs.gov/fonns-pubs or by calling 800-TAX-FORM (800-829-3676).
If you have questions, you can contact the person shown at the top of this letter.
Enclosures:
Form886-A
Form 6018
Fo1m4621-A
Publications 892 & 3498-A
State lnfonnation
Sinc,erely,
=¥;$:~ .. , ,.=·,:> for L;~ A. Brinkley
Di.rector, Exempt Organizations Exam;nations
Catalog Number 34809F
Form 886A
Name of Taxpayer
Date of Notice:
Department of the Treasury - Internal Revenue Service
Ex lanation of Items

# Issues

Schedule No. or
Exhibit
Year/Period Ended
Whether (the organization), which qualified for exemption from Federal income tax under Section 501 (c)(3) of the Internal Revenue Code, should be revoked due to its failure to respond and produce records?
Facts: applied for tax-exempt status by filing the , on 501 (c)(3) on , and was granted tax-exempt status as a , with an effective date of An organization exempt under 501 (c)(3) needs to be organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary or educational purposes and to foster national and amatuer sports competition.
The organization was selected for audit to ensure that the activities and operations align with their approved exempt status.
The organization failed to respond to the Internal Revenue Service attempts to obtain information to perform an audit of for the tax year The organization has not filed a and series return for the tax years The for the president, list the phone number of of Per the website, it lists the organization as active but has not filed an annual report since it's organization. A copy is attached from the state website.
• Correspondence for the audit was as follows: o with attachments, was mailed to the organization on , with a response date of . This letter was not return by the post office as being undeliverable. o with attachments, was mailed certified to on , with a response date , Article Number . Per the Form 886-A(Rev.4-68) tracking, this was picked up at the on
Department of the Treasury - Internal Revenue Service Form 886A Department of the Treasury - Internal Revenue Service
Ex lanation of Items
Name of Taxpayer
Schedule No. or
Exhibit
Year/Period Ended at pm. The return receipt was received back at the Internal Revenue Service whose date stamp cannot be read. o , was mailed to , on , with a response date of . This letter was forwarded on to the organization's new address and shows as being received and signed for on Letter sent certified with certificate number: tracking service shows certified letter received on o with copy of and , to the other attachments was mailed to the organization on new address of with certified number:
It was sent certified
Tracking report indicates certified was received on o with copy of , , and , , and enclosed. Letter was addressed to the organization's current address with a certified certificate attached. The certified number is: tracking service shows it being delivered on o was sent to organization for them to complete the compilation of material requested be sent in. A copy of the was included with the letter since it had not been addressed yet. The letter was sent to the new address but was not sent certified.
• Telephone contact for the audit was as follows: o , Tax Compliance Officer (TCO) called the phone number listed on the and for for the President of and received Left a message for an officer of the organization to return my phone call. o , based on information received in a prior contact attempt, I called the president at and the Director, and left a voice message to call me back as soon as possible. o , called the phone number listed on and for the President of as well as the Director's number and received a voice message for numbers. Left a message for the president and the director to return my
Form 886-A(Rev.4-68)
Department of the Treasury - Internal Revenue Service Form 886A Name of Taxpayer phone call.
Department of the Treasury - Internal Revenue Service
Ex lanation of Items
Schedule No. or
Exhibit
Year/Period Ended o , I called the president, and he did pick up the phone call and told me they moved, along with the organization and he gave me their new address as . He asked that I send a letter to him requesting the information again which I said I would do so. I called the director to let her know we would be sending along with the to their new address and asked her to call me back. o , I called the president and the director and left a message to inform them I tracked their and saw it was delivered to their new address and signed for on I asked to give me a call as soon as it was possible. o , I called the president and the director and left a voice message to both to call me back otherwise I would be proceeding with revocation procedures. o , Upon receiving the with attachments the President of the organization called and aske me what we needed from them. I informed him everything requested was in the Form 4564 that was delivered with the sent to them shortly after was issued. o , I received a call from , who said she was of the directors of the organization. She asked if they still had time to send in the information I had request to avoid revocation. I told her if they sent me the information that was on the it would be helpful in completing the examination. She said they would try and get the information to me.

# Law

Internal Revenue Code (IRC) §501 (c)(3) of the Code provides that an organization organized and operated exclusively for charitable or educational purposes is exempt from Federal income tax, provided no part of its net earnings inures to the benefit of any private shareholder or individual.
IRC §511 of the Internal Revenue Code imposes a tax at corporate rates under section 11 on the unrelated business taxable income of certain tax-exempt organizations.
IRC §6001 of the Code provides that every person liable for any tax imposed by this title, or for the collection thereof, shall keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time prescribe. Whenever in the judgment of the Secretary it is necessary, he may require any person, by notice served upon such person or by regulations, to make such returns,
Form 886-A(Rev.4-68)
Department of the Treasury - Internal Revenue Service Form886A Department of the Treasury - Internal Revenue Service
Ex lanation of Items
Name of Taxpayer
Schedule No. or
Exhibit
Year/Period Ended render such statements, or keep such records, as the Secretary deems sufficient to show whether or not such person is liable for tax under this title.
IRC §6033(a)(1) of the Code provides, except as provided in section 6033(a)(2), every organization exempt from tax under section 501 (a) shall file an annual return, stating specifically the items of gross income, receipts and disbursements, and such other information for the purposes of carrying out the internal revenue laws as the Secretary may by forms or regulations prescribe, and keep such records, render under oath such statements, make such other returns, and comply with such rules and regulations as the Secretary may from time to time prescribe.
Treasury Regulations (Regulation) 1.501(c)(3)-1 In order to be exempt under §501 (c)(3) the organization must be both organized and operated exclusively for one or more of the purposes specified in the section. (religious, charitable, scientific, testing for public safety, literary or educational).
Regulation §1.501 (c)(3)-1 (a)(1) of the regulations states that in order to be exempt as an organization described in section 501 (c)(3), an organization must be both organized and operated exclusively for one or more of the purposes specified in such section. If an organization fails to meet either the organizational test or the operational test, it is not exempt.
Regulation 1.501 (c)(3)-1 (c)(1) of the regulations provides that an organization will not be regarded as "operated exclusively" for one or more exempt purposes described in section 501 (c)(3) of the Code if more than an insubstantial part of its activities is not in furtherance of a 501 (c)(3) purpose. Accordingly, the organization does not qualify for exemption under section 501 (c)(3) of the Code.
Regulation §1.6001-1 (c) of the Code provides that such permanent books and records as are required by paragraph (a) of this section with respect to the tax imposed by section 511 on unrelated business income of certain exempt organizations, every organization exempt from tax under section 501 (a) shall keep such permanent books of account or records, including inventories, as are sufficient to show specifically the items of gross income, receipts and disbursements. Such organizations shall also keep such books and records as are required to substantiate the information required by section 6033. See section 6033 and§§ 1.6033-1 through 1.6033-3.
Regulation §1.6001-1 (e) of the Code provides that the books or records required by this section shall be kept at all time available for inspection by authorized internal revenue officers or employees, and shall be retained as long as the contents thereof may be material in the administration of any internal revenue law.
Regulation §1.6033-1 (h)(2) of the regulations provides that every organization which has established its right to exemption from tax, whether or not it is required to file an annual Form 886-A{Rev.4-68)
Department of the Treasury - Internal Revenue Service Form 886A Department of the Treasury - Internal Revenue Service
Ex lanation of Items
Name of Taxpayer
Schedule No. or
Exhibit
Year/Period Ended return of information, shall submit such additional information as may be required by the district director for the purpose of enabling him to inquire further into its exempt status and to administer the provisions of subchapter F (section 501 and the following), chapter 1 of the Code and section 6033.
Regulation §1.61-1 of the regulations provides that Gross income means all income from whatever source derived, unless excluded by law. Gross income includes income realized in any form, whether in money, property, or services. Income may be realized, therefore, in the form of services, meals, accommodations, stock, or other property, as well as in cash.
Rev. Ru/. 59-95, 1959-1 C.B. 627, concerns an exempt organization that was requested to produce a financial statement and statement of its operations for a certain year. However, its records were so incomplete that the organization was unable to furnish such statements. The Service held that the failure or inability to file the required information return or otherwise to comply with the provisions of section 6033 of the Code and the regulations which implement it, may result in the termination of the exempt status of an organization previously held exempt, on the grounds that the organization has not established that it is observing the conditions required for the continuation of exempt status.
Organization's Position
Taxpayer's position is unknown at this time.
Government's Position
Based on the above facts, the organization did not respond to verify that they are organized and operated exclusively for one or more of the purposes specified in IRC Section 501 (c)(3). If an organization fails to meet either the organizational test or the operational test, it is not exempt.
In accordance with the above-cited provisions of the Code and regulations under sections 6001 and 6033, organizations recognized as exempt from federal income tax must meet certain reporting requirements. These requirements relate to the filing of a complete and accurate annual information (and other required federal tax forms) and the retention of records sufficient to determine whether such entity is operated for the purposes for which it was granted tax-exempt status and to determine its liability for any unrelated business income tax.
Section 1.6033-1 (h)(2) of the regulations specifically state that exempt organizations shall submit additional information for the purpose on enabling the Internal Revenue Service to inquire further into its exempt status.
Using the rationale that was developed in Revenue Ruling 59-95, the Organization's
Form 886-.Acaev.4-68)
Department of the Treaswy - Internal Revenue Service Form 886A Department of the Treasury - Internal Revenue Service
Ex lanation of Items
Name of Taxpayer
Schedule No. or
Exhibit
Year/Period Ended failure to provide requested information should result in the termination of exempt status.

# Conclusion

Based on the foregoing reasons, the organization does not qualify for exemption under section 501 (c)(3) and its tax-exempt status should be revoked.
It is the IRS's position that the organization failed to establish that it meets the reporting requirements under IRC §§ 6001 and 6033 to be recognized as exempt from federal income tax under IRC § 501 (c)(3). Furthermore, the organization has not established that it is observing the conditions required for the continuation of its exempt status or that it is organized and operated exclusively for an exempt purpose. Accordingly, the organization's exempt status is revoked effective Form 1120, U.S. Corporation Income Tax Return, should be filed for the tax periods after
Form 886-A(Rev.4-68)
Department of the Treasury - Internal Revenue Service _Page: -6- ,,.