Determination 200534021: Charitable exemption revoked for commercial and private purposes

Plain-English summary

The IRS issued a final letter revoking an organization's section 501(c)(3) exemption effective on a redacted date. The letter says the organization was not primarily engaged in exempt activities and instead served substantial commercial and private purposes. It provides no description of those activities. Contributions after the effective date were no longer deductible, and the organization was instructed to file corporate income tax returns. The letter also describes the period for seeking a declaratory judgment.

Ruling snapshot

• Question: Did the organization continue to qualify for section 501(c)(3) exemption?
• Outcome: Revocation, effective on a redacted date.
• Key authorities: IRC §§ 170, 501(c)(3), 7428; Treas. Reg. § 1.501(c)(3)-1(d).

Full text (IRS public release)

200534021

DEPARTMENT OF THE TREASURY

INTERNAL REVENUE SERVICE
WASHINGTON, DC 20224

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

UIL:501.03-00

501.03-02
Date: Date1
Legend: Person to Contact:
A =
Date1 =
Date2 =
Local Office =
Ford Allen
Badge Number:

A

Contact Telephone Number:

Contact Address:
CERTIFIED MAIL

Last Day to Petition Tax Court: [redacted]

This is a final revocation letter regarding your exempt status under section 501(c) (3) of the Internal Revenue Code (I.R.C.). The revocation of your exempt status was made for the following reason(s):

You are not organized and operated exclusively for exempt purposes within the meaning of Internal Revenue Code section 501(c)(3). You are not and have not been engaged primarily in activities which accomplish one or more exempt purposes. You are not a charitable organization within the meaning of Treasury Regulation

§ 1.501(c)(3)-1(d); rather, your activities further a substantial nonexempt commercial purpose and serve private, rather than public interests.

1100 Commerce Street, Mail Stop 4920DAL, Dallas, TX 75242

200534021

Based upon the above, we are revoking your organization’s exemption from federal income tax under Section 501(c)(3) of the Internal Revenue Code, effective Date2.

Contributions to your organization are no longer deductible under Code section 170 after Date2. You are required to file income tax returns on Form 1120 for all years beginning on and after Date2. Processing of income tax returns and assessments of any taxes due will not be delayed should a petition for declaratory judgment be filed under section 7428 of the Internal Revenue Code.

If you decide to contest this determination under the declaratory judgment provisions of section 7428 of the Code, a petition to the United States Tax Court, the United States Claims Court, or the district court of the United States for the District of Columbia must be filed before the 91st day after the date this determination was mailed to you. Please contact the clerk of the appropriate court for rules regarding filing petitions for declaratory judgments by referring to the enclosed Publication 892. You may write to the United States Tax Court at the following address:

United States Tax Court
400 Second Street, NW,
Washington, DC 20217

Since your exempt status has been revoked, you are required to file Form 1120, U.S. Corporation Income Tax Return, for all years beginning after Date2. Income tax returns for subsequent years are to be filed with the appropriate Service Center identified in the instructions for those returns.

You also have the right to contact the Office of the Taxpayer Advocate.

However, you should first contact the person whose name and telephone number are shown above since this person can access you tax information and can help you get answers. You can call 1-877-777-4778, and ask for the Taxpayer Advocate assistance or you can contact the Advocate from the site where this issue was determined by writing to:

Local Office

Taxpayer Advocate assistance cannot be used as substitute for established IRS procedures, formal appeals processes, etc. The Taxpayer Advocate is not able to reverse legal or technically correct tax determination, nor extend the time fixed by law that you have to file a petition in Court. The Taxpayer Advocate can, however, see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling.

1100 Commerce Street, Mail Stop 4920DAL, Dallas, TX 75242

200534021

We will notify the appropriate State Officials of this action, as required by Code section 6104(c).

If you have any questions, please contact the person whose name and telephone number are shown in the heading of this letter.

Sincerely,

R.C. Johnson,
Director, EO Examinations

Enclosures:
Publication 892

CC:i

1100 Commerce Street, Mail Stop 4920DAL, Dallas, TX 75242