Determination 201311030: IRS denies exemption to a research organization with commercial and insider-benefit concerns

Plain-English summary

The IRS denied tax-exempt status under IRC § 501(c)(3) to a proposed research organization developing and commercializing a medical device. The organization was controlled by the founder and family members, planned to reimburse the founder and his for-profit company, and had not substantiated its patent ownership, valuations, or proposed transactions. The IRS concluded that the organization was operated for a substantial commercial purpose and had not shown that its activities would avoid private benefit and inurement. The determination also stated that contributions would not be deductible under § 170 and described the organization’s appeal rights.

Ruling snapshot

• Question: Did the proposed research organization qualify for exemption under IRC § 501(c)(3)?
• Outcome: Denied.
• Key authorities: IRC §§ 170, 501(c)(3), 6104(c), 6110, and 7428; Treas. Reg. §§ 1.501(a)-1(c), 1.501(c)(3)-1(a)(1), 1.501(c)(3)-1(c)(1), 1.501(c)(3)-1(c)(2), and 1.501(c)(3)-1(d)(1)(ii), (d)(5)(iii).

Full text (IRS public release)

Transcriber's note: this document is a scan. Obvious OCR misreads were corrected by comparison with the official PDF. Source wording, including apparent source errors, is otherwise preserved. Redacted placeholders remain as published.

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

TAX EXEMPT AND
GOVERNMENT ENTITIES

DIVISION
Release Number: 201311030 Contact Person:
Release Date: 3/15/2013
Date: December 18, 2012 Identification Number:
UIL Code: 501.32-00
501.33-00 Contact Number:
501.03-24
Employer Identification Number:
Form Required To Be Filed:
Tax Years:
All Years
Dear

This is our final determination that you do not qualify for exemption from Federal income tax as
an organization described in Internal Revenue Code section 501(c)(3). Recently, we sent you a
letter in response to your application that proposed an adverse determination. The letter
explained the facts, law and rationale, and gave you 30 days to file a protest. Since we did not
receive a protest within the requisite 30 days, the proposed adverse determination is now final.

Since you do not qualify for exemption as an organization described in Code section 501(c)(3),
donors may not deduct contributions to you under Code section 170. You must file Federal
income tax returns on the form and for the years listed above within 30 days of this letter, unless
you request an extension of time to file.

We will make this letter and our proposed adverse determination letter available for public
inspection under Code section 6110, after deleting certain identifying information. Please read the
enclosed Notice 437, Notice of Intention to Disclose, and review the two attached letters that
show our proposed deletions. If you disagree with our proposed deletions, you should follow the
instructions in Notice 437. If you agree with our deletions, you do not need to take any further
action.

In accordance with Code section 6104(c), we will notify the appropriate State officials of our
determination by sending them a copy of this final letter and the proposed adverse letter. You
should contact your State officials if you have any questions about how this determination may
affect your State responsibilities and requirements.

Letter 4038(CG) (11-2005)
Catalog Number 476328

2

If you have any questions about this letter, please contact the person whose name and telephone
number are shown in the heading of this letter. If you have any questions about your Federal
income tax status and responsibilities, please contact IRS Customer Service at 1-800-829-1040
or the IRS Customer Service number for businesses at 1-800-829-4933. The IRS Customer
Service number for people with hearing impairments is 1-800-829-4059.

Sincerely,

Holly O. Paz
Director, Exempt Organizations
Rulings and Agreements

Enclosure
Notice 437
Redacted Proposed Adverse Determination Letter
Redacted Final Adverse Determination Letter

Letter 4038 (CG) (11-2005)
Catalog Number 4763258

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

TAX EXEMPT AND
GOVERNMENT ENTITIES

DIVISION
Date: 11/1/12 Contact Person:
Identification Number:
Contact Number:
FAX Number:
Employer Identification Number:
LEGEND: UIL:
501.32-00
501.33-00
501.03-24
M = Name of for-profit company
N = State
R = Date

P = Name of company

Dear

We have considered your application for recognition of exemption from federal income
tax under Internal Revenue Code section 501(a). Based on the information provided,
we have concluded that you do not qualify for exemption under Code section 501(c)(3).
The basis for our conclusion is set forth below.

Issues

Do you operate exclusively for 501(c)(3) purposes? No for the reasons described
below.

Do you operate in a commercial manner? Yes, for the reasons described below.

Did you establish that your operations will not inure to the benefit of insiders? No for the
reasons described below.

Facts
Your founder worked on developing a device used in the detection of a specific disease,

Letter 4036(C) (11-2011)
Catalog Number 47630W

2

both as part of his PhD dissertation work and also through his wholly owned for-profit company,
M. He was awarded a grant from a “local business incubator” to develop a business plan to
develop and market the device. Your founder originally intended to create a medical
technology company named P. Instead he created you and transferred P’s business plan to you.
“A great deal of basic research was needed to bring the device to a commercial stage of
development making the introduction of a not for profit venture a more reasonable vehicle for
the development of such technology...where public grants may be accessed more easily.” You
were incorporated in N on R. Your purpose in pertinent part is: “charitable scientific and
educational purposes within the meaning of Section 501(c)(3)...”

Your governing body consists of your founder, his mother and his sister. Because your board
members live in different parts of the country they will meet in person at least once a year to
conduct business matters.

Your activities consist of building on your founder’s previous research. With your formation you
will apply for grants. You intend to produce prototypes of non-invasive devices to use in the
detection of diseases. The devices will be “produced, manufactured and tested locally.” M
prepared a technical proposal which outlined the commercialization strategy. The product(s)
will be marketed through direct sales and licensing agreements with medical supply companies.
Further a provisional patent was granted to your founder for the device. You submitted an
unexecuted licensing agreement between you and your founder. The agreement gave you “an
exclusive license to use” the device and stated your founder “retains title and ownership” in the
form of mutual funds in a brokerage account. You abandoned the licensing arrangement when
your founder decided to transfer the patent rights to you. You did not substantiate ownership of
the patent or the transfer to you.

You were asked to provide an expert valuation of the intellectual rights. In response you stated
your founder valued the rights. His valuation was reviewed by an objective panel during a
business plan competition and found to be sound. You did not substantiate the statement with
any evidence or otherwise provide a valuation of the rights. You investigated hiring a legal firm
to provide an independent appraisal of the intellectual property rights. However, to hire a legal
firm....would cost you in excess of $35,000.00. Such costs are prohibitive and repetitive as the
appraisal expert you consulted said they would conduct the same analysis as previously
performed for your founder and would use similar comparisons.

The financial viability of your products will be evaluated before projects are undertaken. All your
research will be published. Marketing and pricing policies of these devices have yet to be
developed.

You are continuing to perform basic scientific research, which is necessary for understanding the
science and building of such devices. You are responsible for developing and marketing the
product and licensing supply companies, not M. Your founder will be responsible for the technical
viability and commercialization of projects and will direct and conduct much of the research.
Your founder will also continue a research relationship with the University after completing the
PhD work. Mathematical modeling, computational work, simulation and administrative work will
be completed at your Office.

Publication of results for the device will include a dissertation as part of your founder's PhD
requirements. Publication of research will be dependent upon the selection of the publishing
entity, topic or research. You have made no commitments to any commercial entities relating the
results of research.

You will sell your diagnostic tool device to interested parties. You have not identified an
interested party and have no arrangement at this time. Further, commercialization of the device
is not your primary purpose, but would provide needed funds for your on-going operation. Your
primary function would continue to be research that is conducted in the public interest. You state
you will maintain full control of any intellectual property resulting from research you conduct.
Proceeds from the sale of the device will allow you to continue your research on diseases.

During your first and second year you received donations totaling more than $500,000 which
consisted of a transfer of marketable securities to you. You stated that the figure represented
contributions from your founder's mother. No other gifts, grants or contributions were noted.

Expenses were for property transfer and notes payable to your founder of his company M. More
than $180,000.00 was transferred from you to M in order to settle a debt M accrued related to the
development of the detection device. The debt included personal loans made by your founder to
M for the technology development of the diagnostic tool device. Correspondence indicated
different totals for payments and payments due to intellectual property rights, intellectual transfer
fees or reimbursements. You stated that all payments to your founder and his for-profit company
were reimbursements for expenses. You did not clarify the nature of the expenses or explain why
you were reimbursing M. You did not document the exact amounts paid to and the nature of these
payments. You describe the amounts as a “liability” owed to your founder. You explain that you
reimbursed M and your founder for the personal funds they had expended in your creation. You
contend that the amount paid is less than fair market value of the patent. Total assets on your
balance sheet range from approximately $330,000.00 to just under $440,000.00. You list as your
only asset a mutual fund held with a LLC. Your founder’s mother (and your board member)
contributed marketable securities to you. However your projected expenses reflect payments to
your founder and M exceeding $500,000.00. Other expenses include compensation to your
officers and professional fees. Compensation for your founder was arrived at through a meeting
of your board (of directors).

Your founder determined the dollar amount for the property transfer fees which was decided upon
by two factors. The first factor was the percentage of capital and personal investment by your
founder and his for-profit company M. The second factor M has historically functioned as an IT
consulting company. The operations of M have been limited during the past few years due to
economic factors and changes in IT consulting industry and have been currently ceased. Further,
you indicated that if the economic climate improves and your founder decides to start M
operations again, then M would function as a separate entity, performing IT consulting services.
You describe M's services as very different from and unrelated to your objectives. M does
continue in existence but does not currently operate. You stated you abandoned the licensing
agreement, M did not receive royalty payments but instead a reimbursement of expenses. You
state you provided an accounting of this information many times before, but you would attempt to
recover and resubmit these documents. To date you have not submitted the supporting
documents.

Law

Section 501(c)(3) of the Internal Revenue Code (“Code”) provides for the exemption from federal
income tax of organizations organized and operated exclusively for charitable, educational and
other purposes, provided that no part of the net earnings inure to the benefit of any private
shareholder or individual.

Section 1.501(c)(3)-1(a)(1) of the Income Tax Regulations provides 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.

Section 1.501(c)(3)-1(c)(1) of the regulations states: 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.

Section 1.501(c)(3)-1(c)(2) of the regulations provides that an organization is not operated
exclusively for one or more exempt purposes if its net earnings inure in whole or in part to the
benefit of private shareholders or individuals. Section 1.501(a)-1(c) of the regulations defines the
words “private shareholder or individual” in section 501 to refer to persons having a personal and
private interests in the activities of the organization.

Letter 4036(CG) (11-2011)
Catalog Number 47630W

Section 1.501(c)(3)-1(d)(1)(ii) of the regulations state that: “an organization is not organized and
operated exclusively for one or more of the purposes specified...unless it serves a public rather
than a private interest. Thus, to meet the requirements of this subsection, it is necessary for an
organization to establish that it is not organized or operated for the benefit or 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.”

Section 1.501(c)(3)-1(d)(5)(iii) of the regulations provides in pertinent part that research will be
regarded in the public interest if the results of such research (including any patents, copyrights,
processes or formulae resulting from such research) are made available to the public on a non-
discriminatory basis.

In Rev. Rul. 65-1, 1965-1 C.B. 226, the Service considered an organization which promotes and
fosters the development and design of machinery in connection with a commercial operation, and
in connection therewith has the power to sell, assign, and grant licenses with respect to its
copyrights, trademarks, trade names, or patent rights. The Service concluded that the organization
does not qualify for exemption from federal income tax under section 501(c)(3) of the Internal
Revenue Code of 1954.

Rev. Rul. 67-5, 1967-1 C.B. 123 held that a foundation controlled by the creator's family and
operated to enable the creator and his family to engage in financial activities beneficial to them is
not entitled to exemption.

Rev. Rul. 69-526, 1969-2 C.B. 115 held that a research organization operated by a group of
physicians specializing in heart defects, that investigates the causes and treatment of cardiac and
cardiovascular conditions and diseases is exempt under IRC 501(c)(3).

Rev. Rul. 69-266, 1969-1 C.B. 151 held that an organization formed and controlled by a medical
doctor to conduct research programs consisting of examining and treating patients who are
charged the prevailing fees is not exempt.

Orange County Agricultural Society, Inc., Petitioner v. Commissioner of Internal Revenue,
Respondent USTC Docket No. 397-81’X’ (1988) indicates that net earnings include more than net
profits and may inure to an individual in more ways than in the distribution of dividends.

The Church of Eternal Life and Liberty v. Commissioner, 86 T.C. 916 (1986) describes an
organization in which the court wrote that private inurement is strongly suggested where an
individual or small group of individuals are the principle contributors to an organization and that
individual or small group of individuals have exclusive control over the management of the
organization's funds.

In Better Business Bureau of Washington, D.C., Inc. v. United States, 326 U.S. 279 (1945), the
Supreme Court held that the presence of a single non-exempt purpose, if substantial in nature, will
destroy the exemption regardless of the number or importance of truly exempt purposes.

American Science Foundation v. Commissioner, T.C. Memo. 1986-556. indicates that an
organization must establish through the administrative record that it operates as a section
501(c)(3) organization.

The Court of Appeals in Parker v. Commissioner, 365 F.2d 792, 799 (8th Cir. 1963) affirmed the
findings of Tax Court that foundation was pursuing a substantially nonexempt purpose in the
publication and commercial exploitation of the writings of the founder, director and prime
functionary of foundation. The founder had control of the foundation’s day to day activities,
complete control of its finances and the founder's personal funds were to a degree commingled
with the funds of the foundation, and that the evidence clearly supported the finding that the
foundation was pursuing a substantial non-exempt purpose.

In B.S.W. Group, Inc. v. Commissioner, 70 T.C. 352 (1978), the court found that a corporation
formed to provide consulting services did not satisfy the operational test under section 501(c)(3)
of the Code because its activities constituted the conduct of a trade or business that is ordinarily
carried on by commercial ventures organized for profit. Its primary purpose was not charitable,
educational, or scientific, but rather commercial. In addition, the court found that the organization's
financing did not resemble that of the typical section 501(c)(3) organizations. It had not solicited,
nor had it received, voluntary contributions from the public. Its only source of income was from
fees from services, and those fees were set high enough to recoup all projected costs and to
produce a profit. Moreover, it did not appear that the corporation ever planned to charge a fee less
than “cost.” And finally, the corporation did not limit its clientele to organizations that were
section 501(c)(3) exempt organizations.

In Airlie Foundation v. Commissioner, 283 F. Supp. 2d 58 (D.D.C., 2003), the District Court relied
on the “commerciality” doctrine in applying the operational test. Because of the commercial
manner in which this organization conducted its activities, the court found that it was operated
for a non-exempt commercial purpose, rather than for a tax-exempt purpose. As the court stated:
“Among the major factors courts have considered in assessing commerciality are competition with
for profit commercial entities; extent and degree of below cost services provided; pricing policies;
and reasonableness of financial reserves. Additional factors include whether the organization uses
commercial promotional methods (e.g., advertising) and the extent to which the organization
receives charitable donations.”

Letter 4036(CG) (11-2011)
Catalog Number 47630W

Application of Law

You are not as described in section 501(c)(3) of the Code because you are not operated
exclusively for 501(c)(3) purposes and because you have failed to establish your earnings do not
inure to the benefit of insiders. Specifically, your operations are consistent with a commercial
business and your founder benefits from your operations.

You are not as described in section 1.501(c)(3)-1(a)(1) of the regulations because you are not
operated exclusively for one or more of the purposes specified in such section. The production,
marketing and sale of devices are not among the purposes described in the regulations.

You are not as described in section 1.501(c)(3)-1(c)(1) of the regulations because more than an
insubstantial part of activities are not in furtherance of an exempt purpose. More than an
insubstantial part of your activities are commercial and your founder benefits from your
operations.

As described in section 1.501(c)(3)-1(c)(2) you are not exempt because your earnings inure to the
benefit of your founder and his for-profit M.

As described in Section 1.501(c)(3)-1(d)(1)(ii) of the Regulations you are not exempt because you
have failed to establish that you are not organized and operated for the benefit of private interests,
especially your founder.

You are not described in section 1.501(c)(3)-1(d)(5)(iii) of the regulations because you have not
substantiated your ownership of a patent and therefore it is unclear if you have authority to make
the patent and corresponding research results public. Further you state you will sell the device
and/or patent to interested parties but did not provide any information on the terms of the sale and
therefore were unable to substantiate the sale would be in the interest of the public.

You are similar to Rev. Rul. 65-1 because you promote and foster the development and design of
a product, and have the power to sell, assign, and grant licenses with respect to its patent rights.

You are similar to Rev Rul 67-5 because you too are controlled by your creator's family and are
operated to enable the family to engage in financial activities beneficial to them. Specifically you
are controlled by the founder, his mother and his sister. You were formed to secure grants for his
research projects as well as to reimburse him, his for-profit M and his family for research expenses
he incurred while a student pursuing his PhD. Accordingly, your founder and his family benefit
from your operations.

Letter 4036(CG) (11-2011)
Catalog Number 47630W

You are not similar to Rev. Rul. 69-526 because you are not operated by a group of specialty
physicians investigating a disease. Instead you have one individual, your founder, as the only
investigator. Your operations are limited to your founder's research projects and development of
prototype devices based on your founder’s findings.

You are similar to Rev. Rul. 69-266 because you too are formed and controlled by a specific
individual to conduct research programs. Even though you do not intend to sell patient services,
you do intend to sell devices and/or patents at prevailing fees.

Like the organization in Orange County Agricultural Society, Inc., your net earnings include more
than net profits and inurement occurs through reimbursements to your founder for his expenses as
well as continued funding for your future research, prototype development and sale of devices.

Like the organization in The Church of Eternal Life and Liberty inurement is strongly suggested
because you too have a small group of individuals, namely your founder, his mother, and his sister,
who are the principal contributors and they have exclusive control over the management of your
funds.

You are similar to Better Business Bureau of Washington, D.C., Inc. because you too have a
substantial non-exempt purpose. Even though the public may benefit from your founder's research
and resulting devices, the facts overwhelmingly show you operate for a substantial non-exempt
commercial purpose and you failed to establish that your founder will not benefit from your
operations.

As in American Science Foundation v. Commissioner, you have failed to establish through the
administrative record that you operate as a section 501(c)(3) organization. The facts in the
administrative record do not substantiate your founder's claim that you own a patent, that the value
of the patent is greater than the amount you paid or will pay to your founder or M and that the
continued funding of your founder's research is in the public interest. Further the administrative
record does not distinguish your operations from a commercial business as insufficient details were
provided on your proposed research activities and the marketing and sale of your research.

As in Parker v. Commissioner you were formed to commercially exploit the research findings of
your founder. Also the founder has complete control of your finances and your day to day
activities.

Like the organizations in B.S.W. Group, Inc. and Airlie Foundation your activities are focused on
the commercialization of the device produced based on your founder’s research to interested
parties.

Letter 4036(CG) (11-2011)
Catalog Number 47630W

Applicant’s Position

You do not agree that you are being used to benefit your founder. Your founder no longer
contributes a significant amount of time to M. The amount paid to your founder and M was less
than fair market value. You have paid M in full. There is a small outstanding balance due to your
founder. M will not perform any services or do business with you.

Your position is that the payments you made to both your founder and to M for intellectual
property rights and property transfer fees are reasonable, when considering the debts and expenses
realized in developing the intellectual property. Further, you contend that your founder used an
objective method to develop a value for these intellectual property rights, which had the
concurrence of experts in the field. You concluded that when considering these factors, the
payments for the transfer fees and the intellectual property are reasonable and necessary expenses
and are not an unwarranted or excessive benefit to your founder or to M.

You have not made any royalty payments to anyone including your founder or M. The payments to
your founder and M were actually reimbursements for their personal expenses in creating your
organization and the patent, not royalty payments.

It is correct to the best of your knowledge, that your financial data included a payment toward
intellectual property transfer and additional fees. Subsequently you stated the payment was to
settle a debt accrued by M, related to the device. Further your founder attests that all payments
received from you were reimbursement for expenses incurred in your formation and in the
acquisition of the patent.

Service Response to Applicant’s Position

Despite your claim that the amounts you paid to your founder and M were less than fair market
value you provided no independent appraisal to substantiate your claim. Instead you referred to
documents where your founder valued the “business” as either part of his dissertation or in his
search for grants. Your balance sheet entries reflect assets valued at less than the amounts
transferred to your founder and M. Transactions with you, your founder and M have not been arms
length. Funds contributed were from your founder's mother and funds paid out were to your founder
and M. Your founder is your only researcher and makes all decisions with respect to daily
operations. You have failed to establish that the transactions and your operations will not inure to
the benefit of your founder, his mother and his sister.

Even if the amounts paid to your founder and M are less than fair market value, as you state, the
facts show that you are operated in a commercial manner. You are formed to create a prototype
device and sell the device to an interested party. You have not identified a buyer and do not know
the terms of such sale. However, proceeds from the sale will be used to fund other research
indicating that the device will be sold at a profit. You will operate with paid staff. The results of
your founder’s research will be published as part of his dissertation and will therefore benefit him
in his acquisition of a PhD.

You did not substantiate who owns the rights to your research. It is unclear whether your research
activity is in the public interest.

Conclusion

Based on the above facts and analysis you do not qualify for exemption under section 501(c)(3)
because you are not operated exclusively for a 501(c)(3) purpose. In addition the facts show you
are operated in a commercial manner as you were formed to conduct research, develop prototype
devices, market and sell results and use proceeds to fund additional research activity. Finally the
facts show your operations inure to the benefit of insiders, most notably your founder.
Accordingly we conclude you do not qualify for exemption under section 501(c)(3).

You have the right to file a protest if you believe this determination is incorrect. To protest, you
must submit a statement of your views and fully explain your reasoning. You must submit the
statement, signed by one of your officers, within 30 days from the date of this letter. We will
consider your statement and decide if the information affects our determination. If your statement
does not provide a basis to reconsider our determination, we will forward your case to our Appeals
Office. You can find more information about the role of the Appeals Office in Publication 892,
Exempt Organization Appeal Procedures for Unagreed Issues.

Types of information that should be included in your appeal can be found on page 2 of Publication
892, under the heading “Regional Office Appeal”. The statement of facts (item 4) must be
accompanied by the following declaration:

“Under penalties of perjury, I declare that I have examined the statement of facts presented in this
appeal and in any accompanying schedules and statements and, to the best of my knowledge and
belief, they are true, correct, and complete.”

The declaration must be signed by an officer or trustee of the organization who has personal
knowledge of the facts.

Your appeal will be considered incomplete without this statement.

If an organization's representative submits the appeal, a substitute declaration must be included
stating that the representative prepared the appeal and accompanying documents; and whether the
representative knows personally that the statements of facts contained in the appeal and
accompanying documents are true and correct.

An attorney, certified public accountant, or an individual enrolled to practice before the Internal
Revenue Service may represent you during the appeal process. If you want representation during
the appeal process, you must file a proper power of attorney, Form 2848, Power of Attorney and
Declaration of Representative, if you have not already done so. You can find more information
about representation in Publication 947, Practice Before the IRS and Power of Attorney. All
forms and publications mentioned in this letter can be found at www.irs.gov, Forms and
Publications.

If you do not file a protest within 30 days, you will not be able to file a suit for declaratory
judgment in court because the Internal Revenue Service (IRS) will consider the failure to appeal as
a failure to exhaust available administrative remedies. Code section 7428(b)(2) provides, in part,
that a declaratory judgment or decree shall not be issued in any proceeding unless the Tax Court,
the United States Court of Federal Claims, or the District Court of the United States for the
District of Columbia determines that the organization involved has exhausted all of the
administrative remedies available to it within the IRS.

If you do not intend to protest this determination, you do not need to take any further action. If
we do not hear from you within 30 days, we will issue a final adverse determination letter. That
letter will provide information about filing tax returns and other matters.

Please send your protest statement, Form 2848, and any supporting documents to the applicable
address:

Mail to: Deliver to:
Internal Revenue Service Internal Revenue Service
EO Determinations Quality Assurance EO Determinations Quality Assurance
Room 7-008 550 Main Street, Room 7-008
P.O. Box 2508 Cincinnati, OH 45202
Cincinnati, OH 45201

You may fax your statement using the fax number shown in the heading of this letter. If you fax
your statement, please call the person identified in the heading of this letter to confirm that he or
she received your fax.

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

Sincerely,

Holly O. Paz
Director, Exempt Organizations
Rulings & Agreements

Enclosure: Publication 892

Letter 4036(CG) (11-2011)
Catalog Number 47630W