Other 1327011: IRS revokes exemption after an organization withheld records

Plain-English summary

The IRS revoked an organization’s exemption under section 501(c)(3) after repeated unsuccessful efforts to examine its records, receipts, expenditures, and activities. The organization’s stated purposes involved charitable and educational work for disadvantaged people, but the IRS could not verify that it was operating for exempt purposes. The organization did not provide requested organizational or financial information, did not make its books and records available, and did not appear for a scheduled examination. The IRS concluded that the organization failed to establish continued compliance with the Code and revoked exemption effective January 1, 20XX.

Ruling snapshot

• Question: Did the organization continue to qualify for exemption when it failed to provide records and evidence of exempt activities?
• Outcome: Revocation
• Key authorities: IRC §§ 501(a), 501(c)(3), 170, 6001, 6033(a)(1), 6043(b), and 7428; Treas. Reg. §§ 1.6001-1(c), 1.6001-1(e), and 1.6033-1(h)(2); Rev. Rul. 59-95

Full text (IRS public release)

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
TE/GE: EO Examinations
4100 Commerce Street, MC 4920DAL 501-03.00
Dallas, TX 75242

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

March 26, 2013

Release Number: 201327011
Release Date: 7/5/2013 Taxpayer Identification Number:

Person to Contact:
LEGEND Identification Number:
ORG - Organization name Contact Telephone Number:
XX - Date Address - address

CERTIFIED MAIL
ORG

ADDRESS

Dear :

This is a final adverse determination regarding your exempt status under section
501(c)(3) of the Internal Revenue Code (the Code). Our favorable determination letter
to you dated June 15, 20XX is hereby revoked and you are no longer exempt under
section 501(a) of the Code effective January 1, 20XX.

You have failed to establish that you are operated exclusively for exempt purposes
within the meaning of Internal Revenue Code section 501(c)(3), and that no part of your
net earnings inure to the benefit of private shareholders or individuals. You failed to
respond to repeated reasonable requests to allow the Internal Revenue Service to
examine your records regarding your receipts, expenditures, or activities as required by
I.R.C. sections 6001, 6033(a)(1) and Rev. Rul. 59-95, 1959-1 C.B. 627.

Contributions to your organization are no longer deductible under IRC §170.

You are required to file income tax returns on Form 1120. These returns should be
filed with the appropriate Service Center for the tax year ending December 31, 20XX
and for all tax years thereafter in accordance with the instructions of the return.
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
these courts at the following addresses:

You also 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:

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

Sincerely,

Nanette M. Downing
Director, EO Examinations

Enclosure:
Publication 892

Letter 3607(04-2002)
Catalog Number: 34198J

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE

1100 Commerce Street MC 4900 DAL
Dallas, TX 75242

TAX EXEMPT AND
GOVERNMENT ENTITIES July 26, 2012
DIVISION

Taxpayer Identification Number:
ORG Form:
ADDRESS Tax Year(s) Ended:
Person to Contact/ID Number:
Contact Numbers:
Telephone:
Fax:

CERTIFIED MAIL — RETURN RECEIPT REQUESTED
Dear :

We propose to revoke our recognition of your exempt status as an organization
described in section 501(c)(3) of the Internal Revenue Code (Code). We enclose our
report of examination explaining why we are proposing this action.

If you accept our proposal, please sign and return the enclosed Form 6018, Consent to
Proposed Action - Section 7428, unless you have already provided us a signed Form
6018. We will issue a final revocation letter determining you are not an organization
described in section 501(c)(3). After the issuance of the final revocation letter we will
publish an announcement that you have been deleted from the cumulative list of
organizations contributions to which are deductible under section 170 of the Code. If
you do not respond to this proposal, we will similarly issue a final revocation letter.
Failing to respond to this proposal may adversely impact your legal standing to seek a
declaratory judgment because you may be deemed to have failed to exhaust
administrative remedies.

If you do not agree with your proposed revocation and wish to protest your proposed
revocation to the Appeals Office of the Internal Revenue Service, then you must submit
to us a written request for Appeals Office consideration within 30 days from the date of
this letter to protest our decision. This written request is called a protest. For your
protest to be valid it needs to contain certain specific information which generally
includes a statement of the facts, the applicable law, and arguments in support of your
position. For the specific information needed for a valid protest, please refer to page 6
of the enclosed Publication 3498, The Examination Process, and page 1 of the
enclosed Publication 892, How to Appeal an IRS Decision on Tax-Exempt Status.

Page 1 of 2 In lieu of Letter 3618

If you do submit a valid protest, then an Appeals officer will review your case. The
Appeals Office is independent of the Director, EO Examinations. The Appeals Office
resolves most disputes informally and promptly. The enclosed Publication 3498 and
Publication 892 explain how to appeal an Internal Revenue Service (IRS) decision.
Publication 3498 also includes information on your rights as a taxpayer and the IRS
collection process. Please note that Fast Track Mediation Services referred to in
Publication 3498, generally do not apply after issuance of this letter.

You may also request that we refer this matter for Technical Advice as explained in
Publication 892 and an annual revenue procedure. Please contact the individual
identified on the first page of this letter if you are considering requesting Technical
Advice. If we issue a determination letter to you based on a Technical Advice
Memorandum issued by the EO Rulings and Agreements function, then no further
administrative appeal will be available to you within the IRS on the matter.

If you receive a final revocation letter, you will be required to file Federal income tax
returns for the tax period(s) shown above as well as for subsequent years. 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:

If you have any questions, please call the contact person at the telephone number
shown in the heading of this letter. If you write, please provide a telephone number and
the most convenient time to call if we need to contact you.

Thank you for your cooperation.

Sincerely,

Nanette M. Downing
Director, EO Examinations

Enclosures:
Publication 892
Publication 3498
Form 6018

Report of Examination

Page 2 of 2 In lieu of Letter 3618

Schedule number or exhibit

Form 886-A
(Rev. January 1994) EXPLANATIONS OF ITEMS

Name of taxpayer Tax identification Number Year/Period ended
ORG EIN 12/31/20XX

LEGEND

ORG - Organization name EIN - ein Date - XX Address - address City -
city State - state website - website POA - poa CFO - cfo President

• president Secretary - secretary EMP-1, EMP-2 & EMP-3 - 1st, 2nd & 3rd EMP.

ISSUE

Whether ORG, located and operated in State, continues to qualify for exemption under Section
501(c)(3) of the Internal Revenue Code (the Code)?

FACTS

The ORG (thereinafter referred to as the Corporation) was formed as a nonprofit public benefit
corporation in State. It was granted tax-exempt status on June 15, 20XX under Internal Revenue
Code (the Code) Section (§) 501(a) as an organization described in (§) 501(c)(3). According to its
Articles of Incorporation dated September 10, 20XX, the purposes of the Corporation are as
follows.

The primary purposes for which this corporation is formed are
exclusively charitable and educational within the meaning of Section
501(c)(3) of the Internal Revenue Code of 1986, as amended, (the
“Code”) and Section 23701d of the State Revenue and Taxation Code,
as amended, including, without limitation, the search to identify,
formulate, promote, and implement functional solutions for the
improvement and rehabilitation of those in society deemed to be
disadvantaged, such as the anti-social, troubled, juvenile delinquents,
criminals, dysfunctional or mentally deficient, and educating the
general public in such matters.

The Corporation conducted its operations at Address, City, State, per its Form 990 filed for the
years from 20XX to 20XX. The Corporation filed Form 990-EZ, Short Form Return of Organization
Exempt From Income Tax, for the year ended December 31, 20XX, on August 15, 20XX. The
originally filed Form 990 for 20XX shows the following:

Income

Gross sales of inventory

Cost of goods sold

Total revenue

Expenses

Salaries, other compensation,
and employee benefits

Professional fees

Occupancy, rent, utilities,
and maintenance

Printing,

Other $$
Total Expenses $$
Excess for the year $ $$

Form 886-A (1-1994) Catalog Number 20810W Page 1 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A
(Rev. January 1994) EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/period ended
ORG EIN 12/31/20XX

The examining agent began the examination on 10/3/XX. Following is a chronological summary of
completed actions throughout this examination process:

10/6/XX The examining agent called the phone number listed on Form 990 filed for year 20XX,
but the dial could not be completed. The examining agent searched on the Internet for
the contact information of the Corporation and made calls at phone numbers available.
All dials were not able to complete.

10/8/XX The examining agent sent an initial contact letter, Publication 1, and a Form 4564,
Information Document Request (“IDR”) #1, to the Corporation at Address, City, State to
start the first day of examination on 11/8/XX.

10/24/XX The contact letter with attachments mailed on 10/8/XX was returned to the examining
agent that the letter was not deliverable. The examining agent made another attempt
with certified mail. The examining agent also sent Form 4759, postal tracer, to
postmaster in City to locate the Corporation.

11/8/XX The certified mail sent on 10/24/XX was returned to the examining agent. The Post Office
marked on the envelope: “RETURN TO SENDER NOT DELIVERABLE AS ADDRESS
UNABLE TO FORWARD”.

11/29/XX The examining agent received the response from US Post Office to the Form 4759 sent
on 10/24/XX: the reference section was marked with “Moved, Left No Forwarding
Address”. The examining agent dialed the phone number that listed on the Form 1023,
Application for Recognition of Exemption Under Section 501(c)(3) of the Internal
Revenue Code, filed by the Corporation on 11/4/XX as a part of contact information, it
was answered by a different entity. The examining agent sent three contact letters with
address available to the officers of the Corporation: CFO, CFO, and Secretary,
Secretary, and President, President. In coming several weeks, the Post Office returned
all these letters to the examining agent with a mark on envelopes: “RETURN TO
SENDER NOT DELIVERABLE AS ADDRESS UNABLE TO FORWARD”.

1/4/XX The examining agent searched on the Internet again since there was no response from
the officers of the Corporation. The examining agent found a web page of the
Corporation appeared on the Internet at website. The examining agent called the
number # and left a voice message for a return call. The examining agent also sent a
contact letter, Publication 1, and IDR by certified mail to the address on the web page:
Address, City, State.

Form 886-A (1-1994) Catalog Number 20810W Page 2 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Form 886-A
(Rev. January 1994) EXPLANATIONS OF ITEMS

Schedule number or exhibit

Name of taxpayer Tax Identification Number Year/period ended
ORG EIN 12/31/20XX

1/5/XX EMP-1 in the Corporation responded to the examining agent’s voice message left on

1/6/XX 1/4/XX. The examining agent told her that the examining agent needed to speak to an
officer of the Corporation. She told the examining agent that President, the President of
the Corporation would return call to the examining agent next day.

1/10/XX President, the President of the Corporation, returned call to the examining agent. During
the phone conversation the examining agent informed President that the Form 990 the
Corporation filed for 20XX had been selected for examination. The examining agent
explained the examination process to President. The examining agent told President
that a contact letter, IDR, and Publication 1 had been mailed to the Corporation’s office
in City with a tentative appointment date on 2/6/XX. President stated that he did not
know if he would be available on that date. He would call back after he receives the
letter.

1/17/XX The examining agent called President to follow up the mail sent to President on 1/4/XX.
President stated that he had not received it yet.

1/19/XX The examining agent received returned post card (PS Form 3811) of certified mail sent
on 1/4/XX. It was signed by EMP-2 on 1/XX/XX.

1/24/XX The examining agent called the Corporation again to follow up the mail sent for
President’s confirmation for appointment 2/6/XX. The examining agent left a voice
message to President.

1/25/XX The examining agent called the Corporation again and left another voice message to
President.

2/1/XX President called the examining agent and stated that he needs to discuss with his
accountant as to the date and location of the appointment. The examining agent
explained to President that the location of appointment is usually set at the location
where books and records are stored to facilitate the field examination process. The
examining agent asked President where the books and records of the Corporation are
stored. President did not answer the examining agent’s inquiry. Instead President
stated that he needs to discuss with his accountant before he can determine the
location of meeting.

The examining agent received a voice message from President while the examining agent was
out of office that President wanted to reschedule appointment on 2/6/XX because books and
records would not be ready for examination. Additionally President needed more time to assign a
Power of Attorney for representation of this examination. The examining agent returned call to the
Corporation and spoke to EMP-3 regarding the appointment with President. The examining agent
left a message with the examining agent’s available dates for the appointment.

Form 886-A (1-1994) Catalog Number 20810W Page 3 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Form 886-A
(Rev. January 1994) EXPLANATIONS OF ITEMS

Schedule number or exhibit

Name of taxpayer Tax Identification Number Year/period ended
ORG EIN 12/31/20XX

2/6/XX The examining agent called the Corporation to follow up the message left on 2/1/XX and
left another voice message to President.

2/8/XX President called the examining agent after office hours and left the examining agent a
message that President had received the examining agent’s message with dates for the
appointment. President stated that he would probably pick the date of 3/1/XX, but he
was not sure yet how soon he will get books and records together for examination.
President also stated that he would call the examining agent in a few days to settle the
date and location of the appointment.

2/13/XX The examining agent sent President a letter in certified mail for an appointment with
President on 3/1/XX.

2/16/XX The examining agent called the Corporation to follow up the letter sent on 2/13/XX and
left a voice message to EMP-2, one of the Corporation’s employees.

2/27/XX President called the examining agent to reschedule appointment because President
wanted to assign a Power of Attorney to represent the Corporation.

3/9/XX POA left a voice message to the examining agent that he would represent the
Corporation.

3/12/XX The examining agent received a Form 2848, Power of Attorney and Declaration of
Representative, from POA. The examining agent asked for an appointment at his
earliest convenience.

3/20/XX The examining agent contacted POA if he got an appointment with President yet. POA
told the examining agent that he would check with President for an appointment in the
2nd and 3rd week of April. And he would contact the examining agent by 3/22/XX and
provide the date of appointment.

4/2/XX POA returned call and scheduled an appointment on 4/19/XX at the Corporation’s office.
The examining agent sent President a letter, a copy to POA, to confirm the appointment.

4/18/XX POA left a voice message to the examining agent that he had to appear in court in the
next morning and he needed to cancel the appointment next day. The examining agent
called President for his next earliest convenience for a meeting. President simply told
the examining agent that he does not know. President stated that the examining agent
should contact POA, not him. The examining agent called POA and left a voice
message to request another appointment to be scheduled.

4/27/XX The examining agent left a voice message to POA to follow up if another appointment
had been scheduled.

Form 886-A (1-1994) Catalog Number 20810W Page 4 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Form 886-A
(Rev. January 1994) EXPLANATIONS OF ITEMS

Schedule number or exhibit

Name of taxpayer Tax Identification Number Year/period ended
ORG EIN 12/31/20XX

4/30/XX The examining agent called President for the status of appointment. President stated
that he could not get hold of POA recently. President stated that he would have POA
return call for an appointment to be scheduled.

5/1/XX POA left the examining agent a voice message to ask options for appointment. The
examining agent returned his call with available dates for appointment.

5/3/XX President stated that POA did not contact him for his schedule and President would
contact POA to respond the examining agent’s letter for appointment.

5/17/XX POA called the examining agent and scheduled an appointment on 5/30/XX at 10 am.
He also stated that he had checked with his availability on that date. Additionally, he
would mail in some documents before the appointment date.

5/30/XX The examining agent arrived at the Corporation’s office in City at 9:50 am. The
examining agent knocked the door of the office, but no one answered the door. POA
did not show up for the appointment. Instead POA left the examining agent a voice
message that President told him that the Corporation no longer has that location, and he
would find out where the Corporation and President are moving toward to and call the
examining agent back.

6/15/XX The examining agent tried to deliver Summons to President at an address available to
the examining agent: Address, City, State. The address turned out to be a warehouse-
like business suite. No one appeared in the building. The examining agent talked to
the neighbor next door (Suite C). By the description provided, the examining agent was
not quite sure if the examining agent could find President there after an hour of waiting.
The examining agent made another attempt at another address: Address, City, State.
The examining agent arrived at that address around noon. The office building seemed
to be remodeled and its parking lots had been repaved. The examining agent talked to
the people in the office. They are a used car dealership and just moved in a week ago.
They are the new tenant. They did not meet the previous tenant or know the forwarding
address of the Corporation. They returned the mails sent to the Corporation back to the
post office.

7/3/XX The examining agent sent a final request letter to the Corporation to request President’s
presence to give testimony on 7/19/XX at 10 am and bring all books and records of the
Corporation for the year 20XX at the examining agent’s office in City, State. The final
request letter was sent to the Corporation at the last known address, a copy to POA,
both by certified mail.

7/12/XX The examining agent received PS Form 3800 signed by POA indicating he received the
final request letter on 7/6/XX. The tracking status of the certified mail sent to the
Corporation indicating that the Corporation “Moved, Left No Forwarding Address”.

Form 886-A (1-1994) Catalog Number 20810W Page 5 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

7/19/XX President or POA did not appear before the examining agent to give testimony and
provide the books and records listed on the IDR or Summons at the examining agent’s
office in City, State. The examining agent did not receive response from President or
POA as to the final request.

To date, the examining agent has not received financials, organizational information, meeting
minutes, board of director lists, and other documents requested on IDR1 from the Corporation,
President, or POA since the examining agent informed President on 1/6/XX as to the examination.

The Corporation reported salary expenses on its Form 990-EZ filed for years 20XX through 20XX,
however, the Corporation has not filed Form 941, Employer’s Quarterly Federal Tax Return, for
these tax periods. As of 5/15/XX (the due date of the 20XX return), the Corporation had not filed
Form 990 for 20XX.

LAW

IRC § 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 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 and which does not participate in, or intervene in (including the
publishing or distributing of statements), any political campaign on behalf of any candidate for
public office.

IRC § 6001 provides that every person liable for any tax imposed by the IRC, or for the collection
thereof, shall keep adequate records as the Secretary of the Treasury or his delegate may from
time to time prescribe.

IRC § 6033(a)(1) provides, except as provided in IRC § 6033(a)(2), every organization exempt
from tax under § 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. The Secretary may also prescribe by forms or regulations the requirement
of every organization to 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.

IRC § 6043(b) provides that every organization which for any of its last 5 taxable years preceding
its liquidation, dissolution, termination, or substantial contraction was exempt from taxation under
§ 501(a) shall file such return and other information with respect to such liquidation, dissolution,
termination, or substantial contraction as the Secretary shall by forms or regulations prescribe;
except that —

6043(b)(1) no return shall be required under this subsection from churches, their integrated
auxiliaries, conventions or associations of churches, or any organization which is not a private

Form 886-A (1-1994) Catalog Number 20810W Page 6 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A
(Rev. January 1994) EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/period ended
ORG EIN 12/31/20XX

foundation (as defined in § 509(a)) and the gross receipts of which in each taxable year are
normally not more than $5,000, and

6043(b)(2) the Secretary may relieve any organization from such filing where he determines that
such filing is not necessary to the efficient administration of the internal revenue laws or, with
respect to an organization described in § 401(a), where the employer who established such
organization files such a return.

Treas. Reg. § 1.6001-1(c) states that 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 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 -
3.

Treas. Reg. § 1.6001-1(e) states that the books or records required by this section shall be kept at
all times available for inspection by authorized Internal Revenue Service officers or employees,
and shall be retained as long as the contents thereof may be material in the administration of any
Internal Revenue law.

Treas. Reg. § 1.6033-1(h)(2) provides that every organization that 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 IRC § 6033.

Revenue Ruling 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 IRS
held that the failure or inability to file the required information return or otherwise to comply with
the provisions of IRC § 6033 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.

In accordance with the above cited provisions of the Code and Regulations under IRC § 6001 and
6033, organizations recognized as exempt from federal income tax must meet certain reporting
requirements. These requirements relate to the filing of a complete and accurate annual
information (and other required federal tax forms) and the retention of records sufficient to
determine whether such entity is operated for the purposes for which it was granted tax-exempt
status.

Form 886-A (1-1994) Catalog Number 20810W Page 7 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A
(Rev. January 1994) EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/period ended
ORG EIN 12/31/20XX

GOVERNMENT'S POSITION

We are proposing revocation based on the Corporation’s failure to provide information as required
by law, as discussed below.

The Corporation has failed to provide records as is required in Code § 6033(a)(1) and Regulation §
1.6033-1(h)(2). They failed to provide any organizational or financial information that was
requested during the examination. Numerous attempts were made to obtain records via
correspondence and telephone contacts.

Without the Corporation’s records, we cannot verify that the Corporation is operating according to
their exempt purpose. Our position is that the organization, then, is not operating for exempt
purposes. They have provided nothing to the contrary.

This situation is similar to the case in Revenue Ruling 59-95. In that case, tax-exempt status was
revoked for failure to establish that it was observing the required conditions for exempt status,
namely, providing financial statements. The Corporation has also failed to provide records and
should likewise have their exempt status revoked.

TAXPAYER'S POSITION

The taxpayer’s position is unknown at this time.

CONCLUSION

By not complying with the Code and Regulations, the organization has jeopardized its exempt
status. They have failed to provide required documentation, thereby failing to be compliant with
the Code, and failing to show any evidence of their exempt activities. We have no reason to
believe that the Corporation is operating for exempt purposes.

As a result of the examination, we have determined that the Corporation is not operating for
exempt purposes as a §501(c)(3) organization. They have not provided any information to the
contrary. Accordingly, since the organization failed to operate primarily for exempt purposes, we
are proposing revocation of their tax-exempt status, effective January 1, 20XX.

Since the organization will no longer have tax-exempt status beginning January 1, 20XX, they are
liable for filing Form 1120, U.S. Corporation Income Tax Return, as of that date.

Form 886-A (1-1994) Catalog Number 20810W Page 8 publish.no.irs.gov Department of the Treasury-Internal Revenue Service