Determination 200547014: Social club exemption revoked after no response to IRS report

Plain-English summary

The IRS issued a final letter revoking an organization's section 501(c)(7) social club exemption retroactively. It said the organization had not shown that it continued to meet the requirements for exemption. The IRS had mailed a proposed revocation report and requested a response within 30 days, but received none. It also determined that the organization did not qualify under another part of section 501(c). The letter requires Form 1120 income tax returns, though the released copy leaves the starting year blank.

Ruling snapshot

• Question: Did the organization continue to qualify for federal income tax exemption?
• Outcome: Revocation of section 501(c)(7) exemption, effective Date1.
• Key authorities: IRC § 501(c)(7).

Full text (IRS public release)

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
TE/GE: EO Examination
625 Fulton Street, Room 503
Brooklyn, NY 11201

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

Date: July 14, 2005

Number: 200547014
Release Date: 11/25/2005

UIL: 501.07-05

LEGEND
A=Organization
B=Address of Organization
NUM=Employer Id Number
Date1=Effective Date
Date2= Tax Year end of effective date

Taxpayer Identification Number:
NUM
Form:
990
Tax Year(s) Ended:
Date2
Person to Contact/ID Number:
--------------------------------------
Contact Numbers:
Telephone: -------------------
Fax-------------------------------

A
B

CERTIFIED MAIL – RETURN RECEIPT REQUESTED

Dear ------------------:

This is a final determination regarding your exempt status under section 501(c)(7) of the Internal Revenue Code (IRC). Recognition of your exemption from Federal income tax as an organization described in Internal Revenue Code section 501(c)(7) is retroactively revoked to Date1 because it is determined that you have not established that you are observing the conditions required for the continuation of an exempt status.

We previously mailed you a report explaining our proposed revocation of your tax-exempt status. In that correspondence, we requested that you respond to the report within 30 days from the date of the letter accompanying the report.

Because we did not hear from you within that 30 day period, we will process your case on the basis of the recommendations shown in the report.

We have determined that you fail to qualify for exempt status under any other subsection of IRC 501(c).

You are required to file Federal income tax returns on Form 1120. These returns should be filed with the appropriate Service center for all years beginning .

2

You have the right to contact the office of the Taxpayer Advocate. Taxpayer Advocate assistance is not a substitute for established IRS procedures, such as the formal appeals process. The Taxpayer Advocate cannot reverse a legally correct tax determination, or extend the time fixed by law that you have to file a petition in a United States 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. You may call toll-free, 1-877-777-4778, and ask for Taxpayer Advocate Assistance. If you prefer, you may contact your local Taxpayer Advocate at:

Internal Revenue Service-Local Office

If you have any questions, please call the contact person at the telephone number shown in the heading of this letter.

Thank you for your cooperation.

Sincerely,

R. C. Johnson
Director, EO Examinations