Religious, Charitable, etc., Institutions and Community Chest

~
Department of the Treasury fAJ
Internal Revenue Service
IRS T~x Exemnt ;:ind Government Entities
Release Number : 202503015
Release Date: 1/17/2025
UIL Code: 501.03-00
CERTIFIED :\JAIL - Return Receipt Requested Dear
\Yhy we are sending you this letter
Date:
10/08/2024
Taxpayer ID number (last 4 digits):
Form:
Tax periods ended:
Person to contact:
Name:
ID number:
Telephone:
Fax:
Last day to file petition with United States
Tax Court:
01/06/2025
This is a final detennination that you don't qualify for exemption from federal income tax under Internal Revenue Code (IRC) Section 50l(a) as an organization described in IRC Section 50l(c)(3). effective . Your determination letter dated . is revoked.
Our adverse detemiination as to your exempt stanis was made for the follmving reasons: Yon have not demonstrnted that you are both orga1iized and operated exclusively for charitable. educational. or other exempt pm-poses \Vi thin the meaning of IRC Section 501 ( c )( 3 }. Yon did not engage in any activity that accomplished one or more exempt purposes under IRC Section 50l(c)(3). As such. you failed to meet the requirement ofIRC Section 50I(c)(3) and Treasury Regulations Section l.50l(c)(3)-l(a).
Organizations that are not exempt under IRC Section 501 generally are required to file federal income tax returns and pay tax. where applicable. For fm1her imtructions. fonns and infonnation please visit IRS.gov.
Contributions to your organization are no longer deductible under IRC Section 170.
"'hat you must do if you disagree with this determination
If you ,vant to contest our final detemiination. you have 90 days from the date this detem1ination letter was mailed to you to file a petition or complaint in one of the three federal com1s 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 Com1 of Federal Claims. or
• The United States District Com1 for the District of Columbia You must file a petition or complaint in one of these tln·ee 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 information about filing at each respective court's website listed belo,v or by contacting the Office of the Clerk of the Com1 at one of the addresses below. Be sure to include a copy of this letter and any attachments and the applicable filing fee ,vith the petition or complaint.
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 uscf c. uscourts.gov
US District Court for the District of Columbia
333 Constitution A venue, 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.
We'll notify the appropriate state officials (as permitted by law) of our determination that you aren't an organization described in IRC Section 501(c)(3).
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 if 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. Visit Taxpayer Advocate.IRS.gov/contact-us or call 877-777-4778 (TTY/TDD 800-829-4059) to find the location and phone number of your local advocate. Learn more about T AS and your rights under the Taxpayer Bill of Rights at TaxpayerAdvocate.IRS.gov. Do not send your Tax Court petition to TAS. Use the Tax Court address provided earlier in the letter. Contacting TAS does not extend the time to file a petition.
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.
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
Sincerely, i 4u, "" r;n, t,\lhi.\: iy~n A. Brinkley J Dir~ctor, Exempt Organizations Examinations Department of the Treasury Internal Revenue Service
Date:
IRS Tax Exempt and Government Entities 01/05/2024 Taxpayer ID number:
Form:
Tax periods ended:
Person to contact:
Name:
ID number:
Telephone:
Fax:
Address:
Manager's contact information:
CERTIFIED ~L\IL-Retum Receipt Reque~ted Name:
ID number:
Telephone:
Response due date:
February 5, 2024
Dear
\Yhy you're receiving thi~ letter
\Ve enclosed a copy of our audit repo1t. Fonn 886-A. Explanation ofitems. explaining that we propose to reYoke yom tax-exempt status as an organizati ... ,11 described in Internal Revenue Code (IRC) Section 50 Uc)( 31.
If you agree
If you haYen ·r ah-eady. please sign the enclosed Form 6018. Consent to Proposed Action. and renirn it to the contact person sho,vn at the top of this letter. ·we'll issue a final adverse letter dete1111iuing that you aren't an organization described in IRC Section 50l(c)(3) for the periods abow.
After ,ve i-:;sue the final adverse detennination letter. we '11 announce that your organization is no longer eligible to receiYe tax deductible contributi,Jns under !RC Section 170.
If you disagree l. Request a meeting or telephone conference with the manager shown at the top of this letter.
2. Send any infonnation you ,vant us to consider.
3. File a protest with the IRS . .\ppeals Ofiice. If you request a meeting with the manager or send additional infonnation as stated in 1 and 2. above. you'll still be able to file a protest with IRS Appeals Office after the meeting: or atter we comider the infon11ation.
The IRS Appeals Office is independent of the Exempt Organizations division and resolves most disputes infom1ally. 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 Ofiice enough time to consider your case.
For your protest to be valid. it must contain certain specific infonnation. including a statement of the facts. applicable law. and ~uguments in support of yom position. For :;pecific infonnation needed for a valid protest refer to Publication 892. How to Appeal an IRS Detem.tiuation on Tax-Exempt Stanis.
Fast Track :\lediation (FT1f) refen-ed to in Publication 3498. The Examination Process. generally doesn't apply now that \Ve 've issued this letter.
Catalog Number 34809F
-1-. Request technical advice from the Office of Associate Chief Counsel (Tax Exempt Govenunent Entities) if you feel the issue hasn't been addressed in published precedent or has been treated inconsistently by the IRS.
If YL1U 're considering requesting technical advice. contact the person sho\vn at the top of this letter. If you disagree with the technical advice decision. you \Vill be able to appeal to the IRS Appeals Office. as explained above. A decision made in a technical advice memorandum. ho\vever. generally is final and binding on Appeals.
If we clon 't hear from You
If you don't respond to this propo-,al within 30 calendar days from the date of this letter. ·we"ll issue a final adverse determination letter.
Contacting the Taxpayer Advocate Office i~ a taxpayer right
The Taxpayer Advocate Service (TASJ is an independent organization \vithin the IRS that can help protect your taxpayer rights. TAS can offer you help if yom 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. ,vhich is ahvays free. TAS will do everything possible to help you. Visit W\V\V.taxpayeradvocate.i..rs.gov or call 877-777-4 778.
Additional information
You can get any of the fonus and publications mentioned in this letter by visiting our ,vebsite at w,vw.irs.gov.'fonns-pubs or by calling 800-TAX-FOR:.\I (800-829-3676).
If you have questions, you can contact the person shown at the top of this letter.
Enclosures:
Form 886-A
Form 6018
Form..J.6n-A
Publications 892 & 3..J.98-A
Sincere! ' _ . :: ~, … :. • J~11 ~~~·---, '~ \ (fl ~~ ~-,✓ fni .L vnn .- . Brinklev .:..) .,; ..
Director. 'xempt Organizations Examinations Catalog Number 34809F Form 886-A (May 2017) Explanations of Items exhibit Name of taxpayer Tax Identification Number Year/Period ended
Date of Notice: January 05, 2024

# Issues

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 failing to fully produce records to substantiate that the organization is meeting the organizational and operational tests?
Facts applied for tax-exempt status by filing the Form on , and was granted tax-exempt status as a 501 (c)(3) on , 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.
Section 501 (c)(3) requires that an organizing document must limit your purposes to one or more exempt purposes within section 501 (c)(3). The organization attested on Form that their organizing document contains this limitation.
The State of does require a dissolution provision.
The organization filed Form for tax period ending The organization was selected for audit to ensure that the activities and operations align with their approved exempt status, and eligibility to file Form The organization responded to the Information Document Request (IDR) issued on . The response was received by the Internal Revenue Service on , and attested the following information in the response:
• The organization lost the lease on their
• The organization suffered a huge theft of organization, which they reported to the
• No meeting minutes were provided, only meeting dates from
• The organization kept searching for a new operating location. utilized since by another 501 (c)(3) through
• The organization didn't have any gross receipts for the tax periods Page _1 _ www.irs.gov Form 886-A (Rev. 5-2017) Form 886-A (May 2017) Name of taxpayer Department of the Treasury- Internal Revenue Service
Explanations of Items
Tax Identification Number exhibit
Year/Period ended , and , . The gross receipts for those tax periods were $ . , due to no regular charitable activities for those years, and no donations were accepted.
• There were no bank, credit, or investment account statements related to the organization.
No organizational documents were included in the response.
Based on the information provided in the organizations' response, there were no sources of income and no expenses related to their exempt purpose for the year under examination. It was determined that the organization is inactive, therefore not meeting the operational test.
Based on the conversation with the Director of the organization, , on , they suffered a theft of in and has been unable to operate since. stated the organization would like to terminate.
A IDR was issued on , , with a response due date of , The IDR requested evidentiary documents required to properly conclude the examination as a termination. Items requested in the IDR include:
• The Dissolution Document
• The Final Return, and
• A Written Statement of Disposition of Assets A response of IDR was received by fax on . The response included the following documents:
• Statement of Disposition of Assets, signed by the President of the organization.
• A copy of the Board's Meeting Minutes dated Within the meeting minutes, the board members discussed and agreed that their 501 (c)(3) exempt status will be revoked by the IRS due to inactivity, and no board member will object, challenge, or appeal the revocation.
Letter IDR, and the Administrative File, was mailed certified to the organization, on , with a response date of The Administrative File included:
• Form
• Letter , (DO/CG)
• Form
Form 886-A
(May 2017)
Name of taxpayer
Explanations of Items
Tax Identification Number
The organization has been inactive since exhibit Year/Period ended As of exists. , per the State of website, it lists the organizations status as

# 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, 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 Form 886-A (May 2017) Name of taxpayer
Explanations of Items
Tax Identification Number exhibit
Year/Period ended
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 times 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 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 §1.6033-2(a)(1) of the Regulations provides, in part, that, except for certain exceptions not here applicable, every organization exempt from taxation under section 501 (a) shall file an annual information return specifically setting forth its items of gross income, gross receipts and disbursements, and such other information as may be prescribed in the instructions issued with respect to the return.
Regulation §1.6033-2(i)(2) of the Regulations provides, in part, that 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, chapter 1 of subtitle A of the Code, section 6033, and chapter 42 of subtitle D of the Code.
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.
Form 886-A
(May 2017)
Name of taxpayer
Department of the Treasuiy - Internal Revenue Service
Explanations of Items
Tax Identification Number exhibit
Year/Period ended
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
The organization agrees with revocation due to inactivity. Per meeting minutes on / / , the organization will not object, disagree, or appeal the revocation.
Government's Position
In accordance with the above-cited provisions of the Code, 501 (c)(3) organizations recognized as exempt from federal income tax must be both organized and operated exclusively for one or more of the purposes specified in such section, and 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.
Based on the above facts, is inactive and has been since . The documents provided did not substantiate that they are organized and operated exclusively for one or more of the purposes specified in IRC Section 501 (c)(3). Therefore, the organization does not meet the operational test.
No Articles of Incorporation or Bylaws were received from the organization. Therefore, we are unable to determine the organization meets the organizational test.
If an organization fails to meet either the organizational test or the operational test, it is not exempt.
Using the above rationale, the organizations failure to meet the organizational and operational tests should result in revocation of their 501 (c)(3) 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 failed to meet the organizational and operational tests, under IRC §501 (c)(3), required for the continuation of its Form 886-A (May 2017) Explanations of Items exhibit Year/Period ended Tax Identification Number Name of taxpayer exempt status. Accordingly, the organization's exempt status is revoked effective Page _6_ www.irs.gov Form 886-A (Rev. 5-2017)