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PLR 202443024

Religious, Charitable, etc., Institutions and Community Chest

Official textIRS Written Determinations (PLR · TAM · CCA)irs.gov
Summarize

# ISSUE

Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer
Tax identification Number (last 4 digits) Year/Period ended Whether rax-exempt status should be revoked because it does not meet the requirements for exemption under section 501 (c)(3) of the Internal Revenue Code.

# FACTS

An examination was conducted of (“ ”) which included a review of the organizing documents; Form 1023 Application; h historical Forms - ; a review of the financial records submitted, and a review of information secured from sources other than the

# Background

Organizational and Exemption History (“ ”) was incorporated as a not-for-profit organization in the State of on , . The Articles of Incorporation included the purpose in Article ; the authority of , the in Article ; and the distributions in Article :
The Articles included the following purpose:

The corporation was formed for the following purposes from Article a) “To promote the interests of organizations devoted to scientific, educational, cnarhable, societal or public purposes which fall within the category of 501(c)(3) of the Internal Revenue Code of 954, as amended, inducing the , , and , and other , or interest or value, () as part of the , , or of the State of , or the ; ( ) as a site of a significant ; ( ) as identified with a person or persons who significantly contributed to the of the , or the ; ) an of the , , , or of the , or the ; ( ) as a of an type or ; ( ) as identified as the work of an or whose Form 886-A (May 2017) Explanations of Items or exhibit Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended has influenced the of ; and ( ) as of , , or which represent a significant b) To and and , , personal, tangible, or intangible, or any undivided interest therein, without limitation as to amount or value, by gift, grant, purchase, lease or otherwise, either absolutely or jointly with any other person, persons or corporation for any and all of the organizations described in subsection (a) of this section from its members, from the public and from all other sources available; to receive and maintain such funds and property and to expend the principal and income therefrom in furtherance of these purposes;

c) To , , or otherwise deal with all , and , to be used in furtherance of these purposes;

d) To wi:h other organizations, for profit and not for profit with individuals, and with governmental agencies in furtherance of these purposes;

e) To otherwise operate exclusively for charitable, scientific, educational, societal, or public purposes within the meaning of 501 (c)(3) of the Internal Revenue Code of 1954, as amended in the course of which operation: i. No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to, its members, directors, officers, or other persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth herein; ii. No substantial part of the activities of the corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of any candidate for public office except as authorized under the Internal Revenue Code; iii. Notwithstanding any other provisions of these articles, the corporation shall not carry or any other activities not permitted to be earned on (a) by a corporation exempt from federal income tax under 501(c)(3) of the Internal Revenue code of 1954 (or the corresponding provision of any future United States Internal Revenue Law) or (b) by a corporation, contributions to which are deductible under 170(c)(2) of the Internal Revenue Code of 1954 (or the corresponding provision of any future United States Internal Revenue Law).

Form 886-A
(May 2017)

Department of the Treasury - nternal Revenue Service Explanations of Items or exhibit Name of taxpayer Tax Identification Number (last 4 digits) Year/Perioc ended The powers vested in , the Is initial member from Article :

a) “Appoint all the directors of the corporation;

b) Nominate to the corporation’s board of directors all candidates for selection as the corporation’s president;

c) Approve expressly all amendments to the corporation’s articles of incorporation and bylaws before they become effective;

d) Approve the admission of additional members and the establishment of additional classes of members;

e) Approve the incurrence of debt by the corporation in excess of ($ );

f) Approve the annual budget of the corporation g) Approve operating policies established by the corporation; and h) Approve transfers of the corporation’s assets, in excess of $ to transferees.’ A statement that the Foundation would make qualifying distributions was induced in “Not later than the ( th) day of the ( rd) month after the close of the corporation’s taxable year in which the corporation receives contributions, the corporation will make qualifying distributions, as defined in Section 4942(g) of the Internal Revenue Code of 1954, as amended, without regard to paragraph ( ) thereof which are treated after the application of Sec:ion 4942(g)(3) of the Internal Revenue Code of 1954, as amended, as distributions out of corpus (in accordance with Section 4942(h) of the Internal Revenue Code of 1954, as amended, in an amount equal to one hundred percent (100%) of such contributions. The corporation shall maintain adequate records or other sufficient evidence showing that the qualifying distributions were appropriately made ” Form 1023 Application On , , the Internal Revenue Service ("IRS”) received Form 1023-Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code (Rev, Apri 1984). The application was signed by the Form 886-A (May 2017) Explanations of Items or exhibit Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended on According to Part - would be and by the information, there would be no and the ( ). The narrative description of the activities was “to from the and to provide and to , , and J and The made a contribution of stainedby , which the then contributed to the Per , Statement as to , line , the box was checked “ that the was a Exemption Letter The was issued an exemption letter on , granting exemption as a within the meaning of Section 509.a) of the Code as of the date the Form application was filed on , .In the letter, the IRS determined that the was an as defined in Section 4942(j)(3). (see Exhibit ) The was subsequently issued Letter as a on , . Attached to the letter was a which granted an extension to the -month filing period. The stated the was recognized as exempt under section 501 (c)(3) of the code from , , the date it was incorporated.

Historical Forms
The historical Forms filed for the previous years were reviewed. It was determined that a Form was not filed for the tax years ended , , and , .The Forms from , to , were inspected. A spreadsheet of the income, expenses and balance sheet was prepared from these documents and the following was determined:
INCOME
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended Sources of Funds From the fiscal years , through , , the derived income and net gain loss from sources it reported as ; and ; and net loss from of . All the were by . (see Exhibit for detail for each year) Contributions- cash The reported a total of $ in income on their Forms made a in each of the fiscal years and a return was filed for a total of $ Contributions- non-cash A total of $ in non-cash contributions was donated to . During the fiscal year ended , a valued at $ and a valued at $ was donated to . The internet was researched, and was determined to be an and a was a from the . (see Exhibit ) During the fiscal year ended , the received a contribution of valued at S Dividends and interest Dividend and interest income reported on Forms and , was derived from , The total interest income was $ from fiscal years ended held at Net gain (loss) from sale of assets Total losses of $( ) were reported on the . During the fiscal year ended , the reported a of$( ). Part of the Form identified the item sold was a that was purchased on and sold on . The loss was computed using the sales price of $ less the cost of $ . During the year ended , the reported a loss of $( Part of the Form reported the loss on an
EXPENSES
From the fiscal years through , the reported expenses for ; fees; other expenses and contributions. (see Exhibit for detail for each year) Form 886-A (May 2017) Explanations of Items or exhibit Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended Use of Funds The reported a total of $ in expenses on their Forms A total of $ in fees; $ in fees; $ in ocher expenses and $ in contributions. Contributions were made by the in of the years. Part section of the Form Foundation (see Exhibit ): reported the following recipients of contributions from the
• contributions to for a total of $
• contributions to for a total of $
• contribution to
• contributions to for a total of $
• contributions to for a total of $
• contribution to for $
BALANCE SHEET
From the fiscal years through , the reported assets that included cash, receivable from officers, directors, trustees etc, and other assets, (see Exhibit for detail for each year) Receivables from officers, directors trustees etc.
During the fiscal year trustees on the Form , the reported receivables from officers, directors, in the amount of $ During the fiscal year , the Form reported an asset of $ labeled as . Bank records submitted during the examination revealed that there was a out of the on , to in the amount of $ . Bank records also showed a deposit of $ into the account on , workpaper submitted during the examination described the payment as receipt of The Form instructions for Line -receivables due from officers, directors, trustees, and other disqualified persons loans requests additional information in an attached schedule for each loan that included the following:
1.
2.
3.
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer
Tax identification Number (last 4 digits) Year/Perioc ended 4.
5.
6.
7.
8.
9. , and
10.
Description and fair market value of the consideration furnished by the lender A schedule that included the above information about: with was not submitted with Forms filed for and Other assets The other assets consisted of ; ; ; ; : and The has been reported on the Form since . The was valued on the Form as $ on al Forms filed.
The and were donated during and have been valued at $ and $ respectively on the subsequent Forms The was purchased during the fiscal year endec loss the subsequent fiscal year ended and sold at a The Form for the year ended reported an investment in valued at $ . Bank records submitted during the examination revealed the wrote check# on to for .The workpapers for the year ended reported the amount as an . “he entire investment of $ was written off as a loss during the year ended . A google search for was conducted and no information could be found. An Search was conducted, and it was determined that was a domestic that involuntarily dissolved . The agent and manager listed was . (see Exhibit ) For more information on Bank Refund Due see above section- Receivables from officers, directors trustees etc.
Form 886-A or exhibit
Explanations of Items
(May 2017)
Tax identification Number (last 4 digits) Name of taxpayer were donated during The subsequent year the value dropped to $ No Liabilities were reported on the Forms Year/Period ended and valued at $ .The Forms under Examination An examination of the Forms filed by the fiscal years ended for the was initiated. The following and ; information was secured from a review of the filed Forms In response to Part , Line , was included on the Forms about the purpose is to “The . in its for the and entire cash balance is being held for future and to pay the the following statement purpose: the and . The of of the and expenses.”
INCOME
Sources of Funds reported a total of $ in income for the fiscal year ended The income was donated There was no income for the fiscal year ended ended / / / / /
- -
-
Contributions-cash
Contributions-
Noncash
-
-
Interest
TOTAL
- and $ in interest. . The and no income for the fiscal year
TOTAL
-
-
-
-
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer
Tax identification Number (last 4 digits) Year/Period ended
EXPENSES
Use of Funds
The reported a total of $ in expenses for the fiscal year ended ; no expenses for the fiscal year ended and $ in expenses for the fiscal year ended . The expenses were $ in ; $ in fees and $ in fees. There were made in any of the years.
/ / / / / /
TOTAL
EXPENSES
Accounting fees
-
Other expenses
State fees -
Bank fees
- -
Contributions - - -
TOTAL
BALANCE SHEET
The
J
Balance Sheet reported assets that included , from , other notes receivable and other assets. The other assets consisted of and . No were reported on the Forms Receivables from officers, directors trustees etc.
During the fiscal year , the -eported receivables from officers, directors, trustees on the Form in the amount of $ The Form instructions for Line -receivables due from officers, directors, trustees, and other disqualified persons loans requests additional information in an attached schedule for each loan that included the following:
1.
2. www.irs.gov Form 886-A (Rev. 5-2017) Form 886-A (May 2017) Name of taxpayer 3.
4.
5.
6.
7.
8. , and
9. schedule e number or exhibit
Explanations of Items
Tax identification Number (last 4 digits) Year/Period ended Description andof the consideration furnished by the 10.
A schedule that included the above information about receivables with officers was not submitted with Forms filed for and Other notes and loans receivable During the fiscal year the amount of $ Other assets The other assets of reported other notes and loans receivable in , the ; ; ; are reported on all years at the same value in the historical Forms In addition to the ; an additional conation of that were donated during . The value of the coins rose from $ were donated during , to $ in The balance sheet for the ASSETS Cash non-interest Receivables from officers, directors, trustees Other notes and loans receivable Other assets in to $ in reported fixtures valued at $ / / / / / Form 886-A (May 2017) Explanations of Items or exhbit Name of taxpayer Tax Identification Number (last 4 digits) Year/Perioc ended
TOTAL
A further review revealed that significant sections of the had or was . This included: returns were either incomplete, • Part V Qualification under Section 4940(e) for deduced Tax on Net Investment Income.
Column (c) and (d) had
•
Part VI Excise Tax Based on Investment Income. Fields hac Part IX-A Summary of Direct Charitable Activities section contained Part IX-B Summary of Program Related Investments contained • Part X Minimum Investment Return section- Cash deemed herd for charitable use assets was the fair market value of total assets. Minimum investment return was • Part XI Distributable Amount section was • Part XII Qualifying Distributions section. Fields had • Part XIII Undistributed Income section was • Part XIV Private Operating Foundations section. The box for private operating foundation under section 4942(j)(3) was . The adjusted net income was for the current and prior years. The % of the adjusted net income was for the current and prior years. The value of assets and the value of assets qualifying order section 4942(j)(3)(B)(i) was • Part XV Supplementary Information Grants and Contributions Paid during the Year or Approved for Future Payment. This section contained ;
•
Part XVI-A Analysis of Income Producing Activities section included interest income of $ in and was for and ; and • Part XVI-B Relationship p of Activities to the Accomplishment of Exempt Purpose section stated interest was used to pay expenses of foundation for ; was for and Form 886-A (May 2017) Explanations of Items Schedule e number or exhibit Name of taxpayer Tax dentification Number (Iast 4 digits) Year/Period ended Forms Filed A Form was submitted by the ended and received by the Internal Revenue Service on reported acts of with for the fiscal year . The return ACT NO. DATE OF ACT DESCRIPTION AMOUNT INVOLVED 1 / / 2 / / 3 / / 4 / / 5 / / 6 / /
TOTAL
The following statement regarding the transactions was included on the Form “The to a during the tax year. These transactions are activities - and the dates they occurred are listed in Schedule . The funds were borrowed for a business activity operated by the . It is the intention to repay the amount , including , as soon as the funds are available. At the time the return was filed the did not have the funds available to However, is scheduled to be repaid in
Examination
Correspondence and responses to IDR’s An examination of the Foundation Forms for the fiscal years ended , and was initiated when Appointment Letter 3611, information Document Request No 01 (“IDR-01") and Publication 1 that was mailed out on . IDR-C1 requested such information as: organizing documents an interview; tour of residence and assets; documents and financial records (see Exhibit ).
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer Tax Identification Number (last 4 digits, Year/Period ended There was no response to Appointment Letter 3611, so on the phone number from Part Vll-A the books are in care was called and there was a message that the mailbox was full and cannot accept messages at This time. Then the phone number from Par B-Telephone number was called and there was a message that the number had been disconnected.
On , a cover letter with a copy of Letter 3611, IDR-CT, and Publication 1 was mailed to by . The response due date was . On the status of the was checked on the Attempted delivery of the letter was and a notice was left.— If this item is unclaimed by then it will be returned to sender. The was subsequently returned to the Internal Revenue Service.
The preparer of the return, , was contacted on in order to secure contact information for the . On a Form 2848- Power of Attorney was submitted. On a copy of the initial audit letter of Letter 3611, IDR-01, and Publication 1 was faxed under the cove- of Letter 3597 to On , the following documents were received by fax from , with pages:
• A fax cover sheet dated
- A letter from with a list of items requested in the order shown in the IDR and a note as to if they exist, are in the process of obtaining or are attached. The response to the request for minutes was none, (see Exhibit ) A copy of Letter 3611 and IDR-01 dated • L Bank checking account statements and cancelled checks for through • Bank -day CD account statements for through • Bank -month CD account statements for through
• workpapers of trial balance, journal entries and cash analysis for tax years ; ; and
• Form 8283 Noncash Charitable Contributions for for
- - . of
- FMV- $
•
Invoice from & , carted - - for the preparation of exempt organization tax return in the amount of $ • Cashier’s check paid to the order of & dated - - for $ • Invoice from & , caned - - for the preparation of the Forms , ard Annual Report for the Form 886-A (May 2017) Explanations of Items or exhibit Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended ; and for research of self-dealing and preparation of Forms for in the amount of $
• Email from to cc - Re:
- sated - - was thanked for the of ($ face value denomination) with a value of $ to the . Signed by The response to IDR-01 was reviewed and determined to be incomplete.
The bank statements submitted were reviewed and the following transactions were noted for the during the fiscal year to .There was a total of $ transferred out the bank accounts. An invoice was submitted from & for the payment of $ , . for preparation of the return. No documentation was submitted for the transfers to Date Transaction Amount / / ( ) / / ( ) / / ( ) / / ( ) / / ( ) / / ( ) / / ( )
TOTAL
____ ( )
The bank statements were reviewed and there was no financial activity noted curing through The bank statements submitted were reviewed and the following transactions were noted for the during the fiscal year to . There was a total of $ transferred out the bank accounts. An invoice was submitted from & for the payment of $ , for services provided. No documentation was submitted for the transfer to , ; but the workpapers for the fiscal year ended , identified the $ as a . Also, no documentation was submitted for check # to ; and for check # to . The Secretary of State Form 886-A (May 2017) Explanations of Items or exhibit Name of taxpayer Tax identification Number (last 4 digits) Year/Period ended website was reviewed, and was determined to be a (“ ”). The state records also identified as the member and registered agent. The bank statements also showed a wire transfer into the checking account by on in the amount of $ Date Transaction Amount / / () / / / / ( ) / / () / / / / / / () / / ( )
TOTAL
On , a was held with , . It was discussed that was out of town and the difficulties with getting documentation. Discussed the fac: that the amount was not reported on the Form stated that , researched the issue and found some exclusion to making if you had no was informed that follow-up Information Document: Requests will be faxed to the next day.
In a follow-up to the incomplete response to IDR-01, Cover letter 5464 with Information Document Requests 02-Follow up to IDR-01 and 02 Amount were faxed to on (see Exhibit ). The response due date was . Attached to the cover letter was the following:
• Information Document Request 02- Follow up to IDR-01. Section A- items missing from IDR-01 and Section B- additional documents based on the review of the documents submitted.
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended • Information Document Request- 02 Amount. Stated was not an and was required to make . Section A-bank statements and cancelled checks; and appraisals and other valuations of the property for fiscal years ended , , , and . Section B- Documentation of what was relied upon in the determination that the foundation qualified for an exception to the requirement On , faxes were received from One of pages with the following documents in response to IDR-02- Follow up to IDR-01:
• A fax cover sheet dated
• A letter from dated
• Only for
•
A copy of Fax Transmission Cover Sheet from IRS to dated
• workpapers for computation of Line 1 c- of all other assets from Part Return.
Copy of Letter 3597, Letter 5464, IDR-02 and DR-03 dated A second fax of pages with the following documents in response to IDR-02- Follow-up to IDR-01:
• A fax cover sheet dated
• Facsimile cover sheet dated
•
Copy of the front and back of Check # to Copy of the front and back of Check # to The response to 02-Follow up to IDR-01 and 02 Distributable Amount was reviewed and determined to be incomplete.
The following subsequent correspondence was between the IRS, and the Date Mailed Correspondence Mailed to: Due date / / Letter 5464, IDR -02 and IDR -03(corrected number) N/A / / Letter 3597, Letter 5464, IDR -02 and IDR -03(corrected number) N/A Form 886-A or exhibit Explanations of Items [May 2017) Tax Identification Number (last 4 digits) Name of taxpayer Letter 3609 Consent Request, Form 872 For Income and Excise tax IRC 4940 (3 copies), Form 872 for Excise taxes IRC 4942, 4944 and 4945 (3 copies) and Publication 1035 to request / / extension of the statute of limitations.
Letter 3597, Letter 3600 Consent Request, Form 872 For Income and Excise tax IRC 4940 (3 copies), Form 872 for Excise taxes IRC 4942, 4944 and 4945 (3 copies) and Publication 1035 / / to request extension of the statute of limitations.
Letter 3600 Consent Request, Form 872 (updated revision) For Income and Excise tax IRC 4940 (3 copies), Form 872 (updated revision) for Excise taxes IRC 4942, 4944 and 4945 (3 copies) and Publication 1035 to request / / extension of the statute of limitations.
Letter 3597, Letter 3600 Consent Request, Form 872 (updated revision) For Income and Excise tax IRC 4940 (3 copies), Form 872 (updated -evision) for Excise taxes IRC 4942 4944 and 4945 (3 copies) and Publication 1035 / / to request extension of the statute of limitations.
Letter 3599 Consent Follow up, Publication / / 1035 Letter 3599 Consent Follow up, Publication / / 1035 Signed Forms 872; workpapers of trial balance, journal entries, and cash analysis for / / and Letter 5077-D IDR Delinquency Notice, IDR-C2 / / and 1DR-C3.- Certified Mail Letter 3597, Letter 5077-D IDR Delinquency / / Notice, IDR-02 and I DR-03.- Certified Mail Letter 5077-A Pre-Summons Notice and IDR-02 / / and IDR-03-Certified Mail.
Letter 3597, Letter 5077-A Pre-Summons Notice / / and IDR-02 and IDR-03-Certified Mail.
Catalog Number 20810W www.irs.gov
Year/Period ended
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer Tax identification Number (last 4 digits) Year/Period ended / / Letter 3598 Transmittal of Signed consent, Signed Form 872 For Income and Excise tax IRC 4940, Signed Form 872 for Excise taxes IRC 4942, 4944 and 4945 / / Letter 3597, Letter 3598 Transmittal of Signed consent, Signed Form 872 For Income and Excise tax IRC 4940, Signed Form 872 for Excise taxes IRC 4942, 4944 and 4945 / / workpapers of trial balance, journa entries, and cash analysis for and / / Letter 3164- Third Party Contact / / Letter 3597 and Letter 3164- Third Party Contact / / Bank statements for and As of the last information submitted, the response to IDR-02 and IDR-03 was still incomplete and , did not submit to an interview about the activities of Activities The internet was searched for activities and there was and record a website or any mention of activities conducted by .The referred to in purpose or the Form was researched. The is the designed by in (see Exhibit ). According to the property tax information for was the owner of the . (see Exhibit ) The was researched on the website and under accessibility was identified as (see Exhibit ). The website included a list of , and the was not included on the list (see Exhibit ).
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended On , an Initial examination report was issued was issued that proposed the revocation of exempt status under IRC 501 (c)(3). No written position was submitted that addressed the proposed revocation.
Subsequently, the examination continued, and additional Information Document Requests were issued.
Information provided after initial examination report On , Information Document Request No 4 (“IDR-04”)- Activities and Operations was issued to request documentation of the activities and operations of Also, Information Document Request No 5 (“IDR-05”)- Balance Sheet was issued to request documentation of the Balance Sheet assets of and a purchased by The response due date was On , the following documents dated were received in response to I DR-04:
• Newspaper/Book articles and of the Handwritten proposal pages for
• Partial brochure for
• Handwritten mission statement and statemem of purpose Bylaws of
• Correspondence- requests to view ; thank you letters: requests to the ; and in books.
Also received on , were documents in response to DR-05 were:
• loan agreements that outlined the terms of the agreements between and for loans that totaled $ . The documents submitted indicated Form 886-A or exhibit Explanations of Items (May 2017) Name of taxpayer that the purpose of the to Tax Identification Number (last 4 digits) Year/Perioc ended were for “ signed the agreements as both the / / / /
DATE
BORROWER
AMOUNT
DELIVERY
METHOD
% interest, montns maximum; %
Balloon payment interest
TERMS month by , or maximum earlier PAYOFF DATE Funding Funding and / / / / / / / / % interest % per % yr interest, % int yearly, yearly annum, Balloon Balloon payment or Balloon Balloon payment Principal + payment of payment both Principal interest and Interest up to years, No later than No later than -year note, / / no prepayment penalty Funding Funding Funding Negative negative cash negative cash negative cash from from PURPOSE cash flow negative cash negative cash from from from from projects- , and and Form 886-A (May 2017) Name of taxpayer 1
COLLATERAL
SIGNATURE OF
BORROWER
SIGNATURE
FOR
President or exhibit
Explanations of Items
Tax identification Number (last 4 digits) Year/Period ended 1 1 1 J 1 1 1 j President President President President President INTEREST --
PAYMENTS
/ /
/ /
PAYOFF DATE
PAYOFF
AMOUNT
• One
- -
-
-
/ / / /
None
None
None
None and the fora that totaled $ that outlined the terms of the agreement between the purpose of the to
DATE
BORROWER
AMOUNT
DELIVERY METHOD . The document submitted indicated that , was to fund a move to / / or Wire to Property Owner-Form 886-A (Rev- 5-2017) Form 886-A (May 2017) Name of taxpayer
TERMS
PAYOFF DATE
PURPOSE
COLLATERAL schedule number or exhibit Explanations of Items Tax identification Number (last 4 digits) Year/Period ended % per annum, until , which has been payment of approx receives $ awarded. Interest yearly.
/ / No prepayment penalty year note- extension possible; wishes to move to as soon as , guaranteed full is paid in full.
None
SIGNATURE OF BORROWER
SIGNATURE FOR LENDER
INTEREST PAYMENTS
PAYOFF DATE
PAYOFF AMOUNT , President
Interest payments-
$ ,
None
None
Documentation of Check # to and Check # to
• for$ , dated for $ , dated documents for the purchase of the fixture signed by The , : , document stated the following:
"To record the payment of$, to
Of: for the purchase
Purchased on Behalf of the
Individually. by
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended Payment of $ , to of$ , on Today's date.
Balance of $ to be paid as payment in full. to be securely stored in the The , , document stated the following:
“On this date, we make a final Payment for of to This final Payment is $ , . , payable from Check # • Additional documentation submitted was information about the from the in , ; ; and a description from the . Also submitted was a letter dated from that certified the was purchased by on , , for $ , . .
On , , Information Document Request Nc 6 ("IDR-06”)- Activities and Operations follow up was issued to request documentation of activities conducted by during the years under examination from , , to , . Also Information Document Request No 7 (“IDR-07”)- Balance Sheet follow up was issued to request additional information regarding questions about the , documentation of the of the and payment of the , The response due date was On , the following documents were received in response to IDR-C6 (see Exhibit ):
• for
• Emails regarding in , one in and one in Also received on , , were the following statements that provided clarification on the listed in the terms of the with and -see Exhibit ).
• - “The identified in these were not intended to be . They were identified only to show to repay the . The assets shown in these notes were for the expressed purpose of showing sufficiency of assets to Form 886-A (May 2017) Explanations of Items or exhibit Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended . The intent was to show the had the ability to . The financial condition of was not impaired as the has been • -“The payment was noted to snow ability to the The financial condition of was not impaired as the has been No documentation of the was proviced. No documentation was provided of any actions taken when the was not paid in and In addition, in response to IDR-07 the following documentation was submitted of payments made on made by • On , submitted bank statements through , that that reported the of and made to checking account by by and deposit. No documention that was submitted. A statement was provided that management has determined the outstanding is $ . . The will be paid in days.” The bank statements also reported repayments of and made to by
• On , bank statements were submitted that showed the payment by and the final payment for made in to checking account submitted a bank statement on , , that showed a deposit of the made by to checking account by on Date Description Amount Principal Purpose of Interest payment / / / / Deposit / / Deposit / / Deposit / / / / Catalog Number 20810W www.irs.gov Form 886-A or exhibit Explanations of Items (May 2017) Name of taxpayer Deposit Transfer from / / / / Deposit / /
TOTAL
Tour ,a of the
On , , an by
Tax identification Number (last 4 digits) Year/Period ended was provided to Revenue Agent: ir the who assisted it was one of the greatest According to style. such as the of the such as a also was asked to show shown to the Revenue Agent: of . A was conducted and the both the and in the / and from replica listed on the balance sheet. The following was ; and by ; were stored against the
- was a in the
•
- located under the
•
-stored in
•
• - The the at the bank stored in box with in

# LAW

Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended Internal Revenue Code section 501(c)(3) exempts from federal income tax corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation (except as otherwise provided in subsection (h)). and which does net participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candicate for public office.
Internal Revenue Code section 6001 Every person iable 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, render such statements, or keep such records, as tine Secretary deems sufficient to show whether or not such person is i able for tax under this title.
Internal Revenue Code section 6033 (a)(1) Organizations required to file- In general. Except as provided in paragraph (3), every organization exempt from taxation under section 50" (a) shall file an annual return, stating specifically the items of gross income, receipts, and disbursements, and such other information for the purpose of carrying out the internal revenue laws as the Secretary may by forms or regulations prescribe, and shall keep such records, render under cath such statements, make such other returns, and comply with such rules and regulations as the Secretary may from time to time prescribe.
Treasury Regulations section 1.501(c)(3)- 1(a)(1) Organizational and operational tests. 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.
Treasury Regulations section 1.501(c)(3)-1 (b)(1)(i) Organizational test—In general. An organization is organized exclusively for one or more exempt purposes only if its articles of organization (referred to in this section as its articles) as defined in subparagraph (2) of this paragraph:

(a) Limit the purposes of such organization to one or more exempt purposes; and Form 886-A (May 2017) Department of the Treasury - lnternal Revenue Sendee Explanations of Items or exhibit Name of taxpayer Tax identification Number (last 4 digits) Year/Period ended

(b) Do not expressly empower the organization to engage, otherwise than as an insubstantial part of its activities, in activities which in themselves are not in furtherance of one or more exempt purposes.
Treasury Regulations section 1.501 (c)(3)-1 (b)(1 )(iii) Ar organization is not organized exclusively for one or more exempt purposes if its articles expressly empower it to carry on, otherwise than as an insubstantial part of its activities, activities which are not if furtherance of one or more exempt purposes, even though such organization is, by the terms of such articles, created for a purpose that is no broader than the purposes specified in section 501(c)(3). Thus, an organization that is empowered by its articles to engage in a manufacturing business, or to engage in the operation of a social club does not meet the organizational test regardless of the fact that its articles may state that such organization is created for charitable purposes within the meaning of section 501(c)(3) of the Code.
Treasury Regulations section 1.501(c)(3)- 1(b)(4) Distribution of assets on dissolution. An organization is not organized exclusively for one or more exempt purposes unless its assets are dedicated to an exempt purpose. An organization's assets will be considered dedicated to an exempt purpose, for example, if, upon dissolution, such assets would, by reason of a provision in the organization's articles or by operation of law, be distributed for one or more exempt purposes, or to the Federal Government, or to a State or local government, for a public purpose, or would be distributed by a court to another organization to be used in such manner as in the judgment of the court will best accomplish the general purposes for which the dissolved organization was organized. However, an organization does not meet the organizational test if its articles or the law of the State in which it was created provide that its assets would, upon d solution, be distributed to its members or shareholders.
Treasury Regulations section 1.501(c)(3)- 1(c)(1) Operational test—Primary activities. An organization will be regarded as operated exclusively for one or more exempt purposes only if it engages primarily in activities which accomplish one or more of such exempt purposes specified in section 501(c)(3). An organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt purpose.
Treasury Regulations section 1.501(c)(3)-1 (d)(1)(i) Exempt purposes- In general. An organization may be exempt as an organization described in section 501(o)(3) if it is organized and operated exclusively for one or more of the following purposes:

(a) Religious,

(b) Charitable,

(c) Scientific,

(d) Testing for public safety,

(e) Literary,
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer Tax identification Number (last 4 digits) Year/Period ended

(f) Educational, or

(g) Prevention of cruelty to children or animals.
Treasury Regulations section 1.501(c)(3)-1 (d)(1 )(ii) An organization is not organized or operated exclusively for one or more of the purposes specified in subdivision (i) of this subparagraph unless it serves a public rather than a private interest Thus, to meet the requirement of this subdivision, it is necessary for an organization to establish mat it is not organized or operated for the benefit of private interests such as designated individuals, the creator or his family, shareholders of the organization, or persons controlled, directly or indirectly, by such private interests.
Private foundations are generally divided into two types: private operating foundations (as defined in Internal Revenue Code section 4942(j)(3)) and private non-operating foundations. Among other things, Internal Revenue Code sections 4942(a)(1) and 4942(b) provide that operating foundations are not subject to the initial and additional taxes under internal Revenue Code section 4942 for failure to distribute income.
Treasury Regulations sections 53.4942(b)(1) and (2) provide that, in order to qualify as an operating foundation, a private foundation must satisfy an income test and one of the following tests: the assets test, the endowment test, or the support test.
Treasury Regulations section 1.6001-1(a) In genera . Except as provided in paragraph (b) of this section, any person subject to tax under Subtitle A of the Code (including a qualified State individual income tax which is treated pursuant to section 6361(a) as if it were imposed by chapter 1 of Subtitle A), or any person required to file a return of information with respect to income, shall keep such permanent books of account or recorcs, including inventories, as are sufficient to establish the amount of gross income, deductions, credits, or other matters required to be shown by such person in any return of such tax or information.
Treasury Regulations section 1.6001-1(c) Exempt organizations. In addition to 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 snow 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.
Treasury Regulations section 1.6001-1(e) Retention of records. The books or records required by this section shall be kept at all times available for inspection by authorized internal revenue officers or employees, and shall be retained so long as the contents thereof may become material in the administration of any internal revenue law.
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended Treasury Regulations section 1.6033-2(i)(2) Every organization which is exempt from tax, whether or not it is required to file an annual information return, shall submit such additional information as may be required by the Internal Revenue Service for the purpose of inquiring into its exempt status and administering the provisions of subchapter F (section 501 and following), chapter 1 of subtitle A of the Code, section 6033, and chapter 42 of subtitle D of the Code. See section 6001 and § 1.6001-1 with respect to the authority of the district directors or directors of service centers to require such additional information and with respect to the books of account or records to be kept by such organizations.
In Rev. Rul. 58-617, 1958-2 CB 260, (Jan. 01, 1958) Rulings and determi nations letters granting exemption from federal income tax to an organization described in section 501(a) of the Internal Revenue Code of 1954. to which contributions are deductible by donors in computing their taxable income in the manner and to the extent provided by section 170 of the Code, are effective only so long as there are no material changes in the character of the organization, the purposes for which it was organized, or its methods of operation. Failure to comply with this requirement may result in serious consequences to the organization for the reason that the ruling or determination letter holding the organization exempt may be revoked retroactively to the date of the changes affecting its exempt status, depending upon the circumstances involved, and subject to die limitations on retroactivity of revocation found in section 503 of the Code.
In Rev. Rul. 59-95, 1959-1 C.B. 627, an exempt organization 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 furnisn 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 heic exempt, on the grounds that the organization has not established that it is observing the conditions required for the continuation of exempt status.
In Rev. Rul. 67-5, 1967-1 C.B. 123, a foundation controlled by the creator's family is operated to enable the creator and his family to engage in financial activities which are beneficial to them, but detrimental to the foundation. This has resulted in the foundation's ownership of non-income- producing assets which prevent its carrying on a chantable program commensurate in scope with its financial resources. Held, the foundation is operated for a substantial non-exempt purpose and serves the private interests of the creator and his family, and therefore is not entitled to exemption from Federal income tax under section 501(c)(3) of the Internal Revenue Code of 1954 In Rev. Rul. 74-600, 1974-2 C.B. 385, the placing of paintings owned by a private foundation in the residence of a substantia contributor, a disqualified person, constitutes an act of self-dealing under section 4941(d)(1)(E) of the Code.
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer Tax Identification Number (last 4 digits, Year/Period ended In Better Bus. Bureau v. United States, 326 U.S. 279 (1945), the United States Supreme Court held that for an organization to qualify for tax exempt status, the organization must be exclusively devoted to an exempt purpose and the presence of a single nonexempt purpose, if substantial in nature, will destroy the exemption regardless of the number or importance of truly exempt purposes.
In Community Education Foundation v. Commissioner, T.C. Memo 2016-223, the Tax Court held that Community Education Foundation, no longer qualified for exemption from Federal income tax under section 501 (a) because it did not meet the operational test requirements for a section 501(c)(3) organization. Specifically, the organization over time die not meaningfully organize or allocate resources to any of its activities mentioned in its application for exemption.
In Salvation Navy v. Commissioner, T.C. Memo 2002-275 (2002), the court found that one of the reasons why the organization did not qualify for exemption from federal income tax was because it could not provide that its net earnings would not inure to the benefit of a private individual which was its founder.
In Greg R. Vinikoor v. Commissioner, T.C. Memo. 1998-152, the Tax Court held that whether a financial transaction constitutes a loan depends on all the facts and circumstances, including whether (1) there was a promissory note or other evidence of indebtedness; (2) interest was charged; (3) there was security or collateral; (4) there was a fixed maturity date; (5) a demand for repayment was made; (6) any actua repayment was made; (7) the transferee had the ability to repay; (8) any records maintained by the transferor and/or the transferee reflected the transaction as a loan; and (9) the manner n which the transaction was reported for Federal tax purposes.
In Old Dominion Box Co., Inc. v. United States, 477 F_2d 340 (4th Cir. 1973) the Court said operating for the benefit of private parties who are nor members of a charitable class constitutes such a substantial nonexempt purpose.
In Leon A. Beeghly v Commissioner, 35 T.C. 490 (1960), provided that where an exempt organization engages in a transaction with a related interest and there is a purpose to benefit the private interest rather than the organization, exemption may be lost even though the transaction ultimately proves profitable for the exempt organization.
TAXPAYER’S POSITION
No formal written position has been provided to the initial report issued Form 886-A (May 2017) Explanations of Items or exhibit Name of taxpayer Tax identification Number (last 4 digits) Year/Period ended Activities In response to IDR-06 and the request for documented on of activities during the years under examination the following statements were provided in writing (see Exhibit ):
3. Documentation of such as of:he and the use of the for . This includes but is no: limited to , , etc.
"During the period under audit there were of the . We have enclosed and related to the at the decreased materially after the of in of which took place in the . We have attached the newspaper articles related . There was also coverage of the on the at the time. Because of the of the the was not suitable for as it was prior to At this time the of ceased to provide to the and of the were removed from the website. Due to these various factors management determines a cooling off period would be in the best Interest of all involved. ”
4. Documentation of any other activities conducted by “ are scheduled in and another In the near future. See attached. ”
5. According to Revenue Ruling of a , the placing cf , a owned by a in the constitutes an owns of ( under section (d)(1)(E) of the Code. , and ) which are maintained in the of , a . Explain how each of these of the Form 886-A (May 2017) Explanations of Items or exhibit Name of taxpayer Tax Identification Number (las: 4 digits) Year/period ended further an exempt purpose under IRC 501(c)(3) taking into consideration Revenue

# Ruling

“Revenue Ruling the describes a situation where are on receiving a from the resulting in After placing of its on in various for a of the placed them in the of a , a within the meaning of section (a)(1)(A) of the Code The are with the in a of the devoted to and other works of ."
The in question are only stored in the . would incur additional expense if they additional We would also note . did not in the , to (the period under audit). Therefore, unlike the situation referred to in Revenue Ruling - . received no benefit from these being at GOVERNMENT’S POSITION It is the government’s position that you are a and that your exemption under section 501(c)(3) should be revoked effective Type of Private Foundation On your Forms you represent as an under IRC § (j)(3); however, tne facts show that you are a . , in the exemption letter issued by the IRS dated , , which was based on representations you made in an application for recognition of exemption, the IRS concluded that was , you have not shown that during the years at issue that you as a because you do not meet the income test or any of the three alternative tests. To meet the income test, a must spend at least 85 percent of its adjusted net income or its minimum investment return, whichever is less, directly for the active conduct of its exempt activities.
Treas. Reg. § 53.4942(b)-1 (a)(1). Here, you do not make to Form 886-A (May 2017) Explanations of Items or exhbit Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended accomplish an exempt purpose. You also do not satisfy any of the alternative tests. The first alternative test is the asset test. To meet the asset test, substantially more than half of the fair market value of a foundation’s assets must be devoted substantially to the active conduct of exempt activities. Treas. Reg. § 53.4942(b)-2(a)(1). On Part XIV of the Form it is reported that % of the are used directly for the direct conduct of the exempt activities. However, substantia by more than half of your were directly to the active conduct of exempt activities. essentially nave no out to . and purposes of and alternative test is the endowment exempt activities. Most of the were . The were for the and not for any exempt activities. The test. Generally, to meet the endowment test, a foundation must make qualifying distributions directly for exempt purposes of at least 2/3rd of the minimum investment return.
Treas. Reg. § 53.4942(b)-2(b)(1). Here, you make qualifying distributions directly for exempt purposes that were at least 2/3rd of its minimum investment re:urn. The third alternative test is the support test There are three requirements to meet the support test:
1. At least 85 percent of its support (other than gross investment income) is normally received from the general public and 5 or more unrelated exempt organizations, 2.
Not more than 25 percent of its support (other than gross investment income) is normally received from any one exempt organization, and 3.
Not more than 50 percent of its support is normally received from gross investment income.
Treas. Reg. § 53.4942(b)-2(c)(1).
Here, you had and $ , of gross and from the general public, no support from exempt organizations in with no ir does not meet the support test.
You do not meet the income test or any of the three alternative tests. You are not a , but a private exempt under IRC § 509(a) Exemption as a Private Non-Operating Foundation The organization does not qualify for exemption under IRC § 501(c)(3) for the following reasons:
1. The purpose to , , , and for the upkeep of is no: an exempt purpose.
2. The
’s activities do not meet the operational test uncer IRC § 501(c)(3).
3. The assets inured to the benefit of the Form 886-A (May 2017) Explanations of Items or exhibit Name of taxpayer Tax identification Number (last 4 digits) Year/period ended Exempt Purpose Pursuant to your Form 1023 application the was formed to:
“To receive contributions from the Initial member and to provide programs and activities to and and Pursuant to you Form 990-PF, the was formed to:
“to , and maintain the benefit and enjoyment of . The held for future improvement’s and of the in its for the entire cash balance is being and to pay the The purpose per the Form 990-PF is different than the from the Form 1023 application Sometime after the IRS granted exemption to the , its purpose changed from the of , , and to the of , specifically the of which is a . The purpose to , , , and for the upkeep of is not an exempt purpose described in Treas. Reg. § 1.501(c)(3)-1 (d)(1)(i).
Operational test
In order to meet the operational test, an organization must show that they engaged primarily in activities which accomplish one or more of such exempt purposes specified in section 501(c)(3) of the Internal Revenue Code (Treasury Regs. § 1.501(c)(3)- 1(c)(1)).
The activities of a exempt under IRC § 509(a) are to make charitable contributions. Historically the only made charitable contributions of $ from fiscal years , to , . During the under examination the made no charitable contributions. The response to Part XV Supplementary Information, Grants and contributions paid during the year was Form 886-A (May 2017) Explanations of Items or exhibit Name of taxpayer Tax dendfication Number (last 4 digits) Year/Period ended Per the filed Forms 990-PF, Part IX-A (Summary of Direct Charitable Activities), the did not report any charitable activities during the . The only response was . No documentation has been provided that shows the has made the available for . In fact, that are exempt under IRC § 501 (c)(3) identify the as to the As a , the assets that it holds. The during the was required to make minimum distributions of the did not make the of its in , to , . During the examination, the made the statement there was some exclusion to making distributions if you had no . Information that was relied on to support this position was requested in IDR-03 and nothing was submitted in response. The should have made distributions from all , not only the . Investing in nondoes not relieve a from the distribution requirement.
Information document requests No 04 and 06 were issued to request documentation of any other activities conducted by the . In response to IDR-04, the submitted correspondence and documentation of from - . This documentation consisted of requests to ; ; requests to 06, it was stated that the and submitted of . Also submitted was an email for extremely limited programs to ; and was in a “ from the organized by the .The . In response to IDR-” Due to the . The , with in and in . This showed the has no regular established or has not made As demonstrated in Rev. Rul. 58-617, an organization’s exempt status will remain in effect only so long as there are no material changes in the character of the organization, the purposes for which it was organized, or its methods of operation. In the court case Community Education Foundation v. Commissioner, T.C. Memo. 20-6-223, the court concluded that the organization over time did not meaningfully organize or allocate resources to any of its activities no longer qualified for exemption, the established that it conducted regular and ongoing exempt: activities. The charitable contributions that totaled $ over the previous has not made any meaningful in the previous charitable contributions at all during the .The and no has failed to meet Due to its over a period of , the the operational requirements to continue exemption under IRC § 501(c)(3).
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer Tax Identification Number (last 4 digits) Year/period ended Use of Funds/Assets Treasury Regulations § 1.501(c)(3)-1 (d)(1 )(ii) states an organization is rot organized or operated exclusively for one or more of the purposes specified in subdivision (h of this subparagraph unless it serves a public rather than a private interest:, Thus, to meet the requirement of this subdivision, it is necessary for an organization to establish that it is not organized or operated for the benefit of private interests such as designated individuals, the creator or his family, shareholders of the organization, or persons control led, directly or indirectly, by such private interests.
It has not been established that the of the have been used for anything other than the of and for the of The of the have been used to benefit , and Transfers of Funds used the bank accounts for and on several occasions from the to . In he $ and in he $ . During the in and made of funds for a total of $ . In response to lDR-05, were received on , . According to the the purpose of the was for “ .” No was provided to the . According to the was listed on the to had to the . You have not shown that any of were for exempt purposes. In addition, the transfer of $ , which constituted more than of all of the constitutes significant inurement to a In addition, during , a in the amount of $ was sent from the to , . According to the accountant’s workpaper the expenditure was a appears to be . The transaction was reported on the Form 990-PF balance sheet on Line 7- other notes and loans receivable. In response to IDR-05, a with was received on , . The purpose of the to was to , . No was provided to the for the . According to the of disability t was listed on the to show had the ability to , but no Form 886-A (May 2017) Explanations of Items or exhibit Name of taxpayer Tax Identification Number (last 4 digits) Year Period ended in and , and no documentation that any action was taken when the were not made. documentation was submitted that was due a $ Also, the terms of the were that would be disability , yet there was no These provided no protections for the , or any other change in . and if they did the due to the risk associated with an in case of default, No bank would make a percent would generally be at a There are no minutes of approval of . According to Article 6 of the Articles of Incorporation, has the power to approve the transfer of the corporation s in excess of $ , by as . The bylaws gave the right to determine how the would be used. The to constitutes a significant portion of the which were used for non-exempt purposes.
After the of$ was made to , the made of $ to both , and that is a member; and to . The payments were not grants for a charitable purpose. The payment Accorcing to the , , statement, Check# was a payment of $ to for the of to the According to the , , statement, Check # was a payment to for the of Ac die . It is the position that were a reimbursement for the cost of the No contemporaneous documentation was provided from of the intention of to purchase for the and receive . The only documentation provided was created almost later in at the time the payments were made to and to . In the filed Form to report the made to with funds as acts of . So, after the reported acts of , engaged in additional Transactions with the , this shows that the by IRC are not an effective deterrent to stop from engaging in financial transaction with
Investments
During the fiscal year or normal” such as invested $ , instead of , in traditional , , , etc., the a business “owned” by . . By form 886-A (Rev. 5-2017) Form 886-A (May 2017) Explanations of Items or exhibit Name of taxpayer Tax Identification Number (last 4 digits) Year/Period ended the end of the fiscal year , , the entire was a loss and the had $ , less in funds that could have been used for exempt purposes.
Thus, the served as a vehicle to are located in Noncash Assets The other of the were previously by before he them to the . The other than the are located in the . The other of the include:
- located ; settle-located in the
- located ; ; and
— located in a . Tie
Essentially there has not been a change in ownership of these items. The did not change location once they were “ .” did not re inquish control of the was able to receive a charitable deduction and still retain control over the . The , ,and but are items that can be enjoyed in nothing to advance an exempt purpose.
The assets are and from the only or approval by the of the advertisement from the to inform the that these do not benefit the . These do . Access is limited to “here is no are It is the position of the problem since was not in this also means that . The placement of the inurement. that having these items in is net a from , through , . However, was also . This situation is similar to Rev. Rul. 74- in the of the results ir In summary, your organization is similar to Rev. Rul 67- where the has been used as a to engage in financial activities that were beneficial to had control over the , , and ; made use of the funds for .The of the inured to the benefit of . These were donated in name only since still maintained control over them. used the of the to make and for the of . These noncharitable activities have destroyed the exemption of the . (Better Bus. Bureau v. United States. 326 U.S. 279 (1945)).
Form 886-A
(May 2017)
Explanations of Items or exhibit
Name of taxpayer Tax identification Number (last 4 digits) Year/Period ended

# CONCLUSION

Though the has significance, the is not owned by the but is the of . There were no significant activities to or I purposes either through or through established programs. In fact, during this period the has been during the The of the inure to the benefit of . The cash assets of the were used as a ready source of funds for previously in used to in of . During the , used the to make to and to ( .) In the case of , the funds were used when had ; and for the funds were used as an of funds instead of waiting for funds to be paid.
The highest fiduciary standards should be maintained by the , and this does not include intermingling of with the ; in owned by the ; and to the and Accordingly, status as an organization describee under section 501 (c)(3) should be revoked, effective , , because it was not operated for an exempt purpose and the assets were not used for exclusively charitable purposes.
The becomes a taxable and is required to file both Form 1120 U.S.
Corporate Income Tax Return and Form 990-PF Return of . Contributions are no longer deductible by donors under section 170(c)(2).

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