Foreclosure counseling organization denied exemption

Plain-English summary

An organization offered free foreclosure-prevention counseling and helped homeowners prepare and pursue loan modifications. It had abandoned its proposed classes and broader housing programs, did not provide written budget analyses or ongoing education, devoted significant time to paperwork and lender negotiations, and served homeowners without limiting eligibility to low-income people or another charitable class. The IRS concluded that the activity was neither educational nor charitable, directly benefited the participating homeowners, and did not satisfy section 501(q). Exemption under section 501(c)(3) was denied, and the determination became final when the organization did not protest.

Ruling snapshot

• Question: Does free foreclosure counseling and loan-modification assistance, without a substantive educational program or limitation to a charitable class, qualify under section 501(c)(3) or satisfy section 501(q)?
• Outcome: Denied
• Key authorities: IRC §§ 501(c)(3), 501(q); Treas. Reg. § 1.501(c)(3)-1; Rev. Rul. 69-441, 1969-2 C.B. 115; Rev. Proc. 86-43, 1986-2 C.B. 729; Better Business Bureau of Washington, D.C. v. United States, 326 U.S. 279 (1945); B.S.W. Group, Inc. v. Commissioner, 70 T.C. 352 (1978); Solution Plus, Inc. v. Commissioner, T.C. Memo. 2008-21

Full text (IRS public release)

Department of the Treasury
Internal Revenue Service

P.O. Box 2508
IRS Cincinnati, OH 45201
Date: 2/11/2015

Employer ID number:

Release Number: 201519034 Contact person/ID number:
Release Date: 5/8/2015
UIL Code: 501.32-00 Contact telephone number:

Form you must file:

Tax years:

Dear

This letter is our final determination that you don’t qualify for tax-exempt status under Section 501(c)(3) of the
Internal Revenue Code (the Code). Recently, we sent you a proposed adverse determination in response to your
application. The proposed adverse determination explained the facts, law, and basis for our conclusion, and it
gave you 30 days to file a protest. Because we didn’t receive a protest within the required 30 days, the proposed
determination is now final.

Because you don’t qualify as a tax-exempt organization under Section 501(c)(3) of the Code, donors can’t
deduct contributions to you under Section 170 of the Code. You must file federal income tax returns for the tax
years listed at the top of this letter using the required form (also listed at the top of this letter) within 30 days of
this letter unless you request an extension of time to file.

We’ll make this final adverse determination letter and the proposed adverse determination letter available for
public inspection (as required under Section 6110 of the Code) 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, follow the instructions in the Notice
437 on how to notify us. If you agree with our deletions, you don’t need to take any further action.

We'll also notify the appropriate state officials of our determination by sending them a copy of this final letter
and the proposed determination letter (under Section 6104(c) of the Code). You should contact your state
officials if you have questions about how this determination will affect your state responsibilities and
requirements.

Letter 4038 (Rev. 7-2014)
Catalog Number 47632S

If you have questions about this letter, you can contact the person listed at the top of this letter. If you have
questions about your federal income tax status and responsibilities, call our customer service number at

1-800-829-1040 (TTY 1-800-829-4933 for deaf or hard of hearing) or customer service for businesses at
1-800-829-4933.

Sincerely,
Tamera Ripperda
Director, Exempt Organizations
Enclosures:
Notice 437

Redacted Letter 4036, Proposed Adverse Determination Under IRC Section 501(c)(3)
Redacted Letter 4038, Final Adverse Determination Under IRC Section 501(c)(3) - No Protest

Letter 4038 (Rev. 7-2014)
Catalog Number 47632S

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

TAX EXEMPT AND
GOVERNMENT ENTITIES

DIVISION
Date: November 18, 2014 Contact Person:
Identification Number:
Contact Number:
FAX Number:
Employer Identification Number:
LEGEND: UIL:
B= Incorporation date 501.32-00
C= State 501-32-01
D = County 501.33-00
Dear

We considered your application for recognition of exemption from federal income tax under
Section 501(a) of the Internal Revenue Code (the Code). Based on the information provided, we
determined that you don’t qualify for exemption under Section 501(c)(3) of the Code. This letter
explains the basis for our conclusion. Please keep it for your records.

Issues

• Do you qualify for exemption under section 501(c)(3) of the Code? No, for the reasons
described below.

• Do you meet the requirements under section 501(q) of the Code? No, for the reasons
described below.
Facts

You are an organization that counsels local homeowners about their options and rights with
respect to foreclosure and loan modifications.

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2
You were incorporated on B as a non-profit corporation under C law “to provide education and
charitable assistance to the general public by helping people acquire and maintain housing.”

All of your directors are experienced in the fields of real estate, housing counseling/services,
foreclosure prevention counseling/services and credit/debt management. All three directors also
serve as officers. You have adopted a conflict of interest policy with respect to your directors.

Directors will not be paid salaries; however, they may be paid a reasonable fee for attending
meetings of the board. In addition, they may be allowed reasonable reimbursement or
advancement for expenses incurred in the performance of their duties. Compensation of officers
will be reasonable and paid in return for the performance of services related to your tax-exempt
purposes. No current plans exist to contract for services from third parties.

Article II of your Bylaws states that your objectives and purposes are to help people own and
keep their own homes through:

• Educational classes and individual counseling for first time home buyers

• Facilitating down payment assistance for low income home buyers

• Educational classes to help homeowners keep and maintain their homes

• Counseling home owners who are having trouble making their monthly payments

• Working with banks to modify mortgages

• Facilitating the delivery of rescue funds to help low income homeowners become current

on their mortgages

• Buying homes to keep people from having to move out including facilitating lease or
lease with option to buy agreements for seniors who lose their homes

• Property management, especially of properties in those lease and lease option
arrangements

• Processing short sales agreements and counseling people who are losing their homes
on the their housing options

• Processing mortgage loan applications to enable low and medium income people to buy
homes
• Counseling seniors on reverse mortgages to help them keep their homes

• Facilitating real estate sales and purchases for low and median income families

You will help people own and keep their own homes. You initially considered property
management, especially of properties in lease and lease option arrangements, to be your main
directive. Several of your activities were expected to generate income. The income producing
activities included:

• Property management,

• Processing short sale agreements,

• Counseling people who are losing their homes on the their housing options,

• Processing mortgage loan applications to enable low and medium income people to buy
homes and

• Facilitating real estate sales and purchases for low and median income families.

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Funds are also raised through donations, gifts and grants.

You concentrate on helping clients residing in D county but you will not turn away any C
residents in need of your services. Low income seniors are your primary focus.

To help clients having trouble making their monthly mortgage payments, you initially planned to
offer:
• Educational classes followed by counseling and working with lenders to facilitate a
mortgage modification,
• Rescue funds to bring mortgages current if a homeowner does not qualify for a loan
modification,
• Education for seniors concerning reverse mortgages,
• To buy the home in a short sale and rent it back to the client if no other option works,
• To work with the client to improve their financial situation in order to allow the client to
purchase the home back when the lease terminates, or
• Help process the short sale and counsel the client on their housing options if all else
fails.

You also intended to educate and counsel first time homebuyers. If a client improved his/her
financial situation to the point which would qualify for a home loan, you expected to locate down
payment assistance for the purchase. In addition, you would process mortgage applications to
help low and medium income people to buy homes and facilitate real estate purchases.

You subsequently made changes to the proposed activities described in your application. You
no longer plan to manage or own any properties, process mortgage applications, facilitate real
estate sales/purchases, be involved with down payment assistance, or offer pre-purchase
housing counseling, post-purchase housing classes, or financial education classes/credit
counseling. You will conduct foreclosure prevention counseling 100% of your time. In the
future, you estimate your time will be allocated to:

• Foreclosure prevention counseling — 20%
• Pre-purchase housing counseling — 40%

• Post purchase housing classes — 20%

• Financial education classes and counseling — 40%

When asked to submit detailed descriptions of your proposed pre-purchase housing counseling,
post purchase housing classes, and financial education classes and counseling, you stated you
no longer expect to provide any of these services.

Foreclosure prevention counseling is your only remaining activity. In conducting this program,
you:
• Interview the clients to obtain financial data as well as information regarding the
mortgage delinquency issue,
• Explain various options such as refinance, loan modification, repayment plan, partial
claim, bankruptcy, deed in lieu, or selling the house, and

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• Explain effects of each of the options to assist the client in determining the best option
for their situation.

Your program involves from one to ten meetings with clients. The initial meeting usually lasts
about an hour. At that meeting, the client provides basic financial information and details about
the delinquent mortgage. After reviewing the client's responses, you discuss the client’s budget
based upon the data provided and recommend an approach. The client makes the final decision
as to which approach to take. To date, all your clients have chosen apply for the loan
modification option. You do not provide a written budget analysis or ongoing educational
sessions.

Your counselor assists each client with completing the paperwork to submit a request to the
lender for mortgage mitigation. The counselor also communicates with the lender on behalf of
the client. While your counselor is a HUD certified housing counselor, you have not (nor expect
to) applied for certification as a HUD approved housing counseling agency.

Any subsequent meetings are much shorter (except for the meeting to discuss the mortgage
company’s determination).

You sometimes refer people to attorneys or real estate agents. A list of bankruptcy attorneys
and real estate agents may be provided to clients in need of services; however, no particular
individual is recommended.

None of your directors are compensated for providing services to you, and you do not charge a
fee for your program.

Law

Section 501(c)(3) of the Code provides that corporations may be exempted from tax if they are
organized and operated exclusively for charitable or educational purposes and no part of their
net earnings inures to the benefit of any private shareholder or individual.

Section 1.501(c)(3)-1(a)(1) of the Income Tax Regulations (“regulations”) provides that, in order
to be exempt as an organization described in section 501(c)(3) of the Code, 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(b)(1)(i) of the regulations provides that an organization is organized
exclusively for one or more exempt purposes only if its articles of organization:

(a) Limit the purposes of such organization to one or more exempt purposes; and

(b) Do not expressly empower the organization to engage, otherwise than as an
insubstantial part of its activities, in activities that in themselves are not in furtherance
of one or more exempt purposes.

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5
Section 1.501(c)(3)-1(b)(4) of the regulations provides that an organization's assets must be
dedicated to an exempt purpose, either by an express provision in its governing instrument or
by operation of law.

Section 1.501(c)(3)-1(c)(1) of the regulations provides that an organization will be regarded as
“operated exclusively” for one or more exempt purposes only if it engages primarily in activities
that accomplish one or more of such exempt purposes specified in section 501(c)(3) of the
Code. 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(d)(1)(ii) of the regulations assigns the burden of proof to an applicant
organization to show that it serves a public rather than a private interest and specifically that it is
not organized or operated for the benefit of 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)(2) of the regulations provides that the term “charitable,” is used in
section 501(c)(3) in its generally accepted legal sense and includes the relief of the poor and
distressed or of the underprivileged.

Section 1.501(c)(3)-1(d)(3)(i) of the regulations provides that the term “educational,” as used in
section 501(c)(3) of the Code, relates to:

(a) The instruction or training of the individual for the purpose of improving or developing
his capabilities; or

(b) The instruction of the public on subjects useful to the individual and beneficial to the
community.

Section 501(q) imposes requirements on organizations otherwise described in
§ 501(c)(3) or (4) if “the provision of credit counseling services is a substantial purpose.”

Section 501(q)(4)(A) defines, for purposes of § 501(q), the term “credit counseling services” to
mean (i) the providing of educational information to the general public on budgeting, personal
finance, financial literacy, saving and spending practices, and the sound use of consumer credit,
(ii) the assisting of individuals and families with financial problems by providing them with
counseling, or (iii) a combination of the activities described in clauses (i) and (ii).

In Rev. Rul. 69-441, 1969-2 C.B. 115, the Service found that a nonprofit organization formed to
help reduce personal bankruptcy by informing the public on personal money management and
aiding low-income individuals and families with financial problems was exempt under section
501(c)(3) of the Code. Its board of directors was comprised of representatives from religious
organizations, civic groups, labor unions, business groups, and educational institutions.

The organization provided information to the public on budgeting, buying practices, and the
sound use of consumer credit through the use of films, speakers, and publications. It aided low-
income individuals and families who have financial problems by providing them with individual
counseling, and if necessary, by establishing budget plans. Under the budget plan, the debtor

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Catalog Number 47630W

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voluntarily made fixed payments to the organization, holding the funds in a trust account and
disbursing the funds on a partial payment basis to the creditors. The organization did not
charge fees for counseling services or proration services. The debtor received full credit against
his debts for all amounts paid. The organization did not make loans to debtors or negotiate
loans on their behalf. Finally, the organization relied upon contributions, primarily from the
creditors participating in the organization's budget plans, for its support.

The Service found that, by aiding low-income individuals and families who have financial
problems and by providing, without charge, counseling and a means for the orderly discharge of
indebtedness, the organization was relieving the poor and distressed. Moreover, by providing
the public with information on budgeting, buying practices, and the sound use of consumer
credit, the organization was instructing the public on subjects useful to the individual and
beneficial to the community. Thus, the organization was exempt from federal income tax under
section 501(c)(3) of the Code.

The Service compared this holding with the holding of Rev. Rul. 65-299, which holds that a
nonprofit organization formed to advise, counsel, and assist individuals in solving their financial
difficulties by budgeting their income and expenses and effecting an orderly program for the
payment of their obligations qualifies for exemption from Federal income tax under section
501(c)(4) of the Code (rather than under section 501(c)(3)).

Outside the context of credit counseling, individual counseling has, in a number of instances,
been held to be a tax exempt charitable activity. Rev. Rul. 78-99, 1978-1 C.B. 152 (free
individual and group counseling of widows); Rev. Rul. 76-205, 1976-1 C.B. 154 (free counseling
and English instruction for immigrants); Rev. Rul. 73-569, 1973-2 C.B. 178 (free counseling to
pregnant women); Rev. Rul. 70-590, 1970-2 C.B. 116 (clinic to help users of mind-altering
drugs); Rev. Rul. 70-640, 1970-2 C.B. 117 (free marriage counseling); Rev. Rul. 68-71, 1968-1
C.B.249 (career planning education through free vocational counseling and publications sold at
a nominal charge). Overwhelmingly, the counseling activities described in these rulings were
provided free, and the organizations were supported by contributions from the public.

Rev. Proc. 86-43, 1986-2 C.B. 729, describes the methodology test the Internal Revenue
Service uses to determine when the advocacy of a particular viewpoint or position is educational
under sections 501(c)(3) of the Code and 1.501(c)(3)-1(d)(3) of the regulations. The revenue
procedure states that the focus of section 1.501(c)(3)-1(d)(3) is on the method the organization
uses to communicate to others, not the content of its communication. The method of
communication is not educational "if it fails to provide a development from the relevant facts that
would materially aid a listener or reader in a learning process." One factor indicating the method
is not educational is as follows: "[t]he approach used in the organization's presentations is not
aimed at developing an understanding on the part of the intended audience or readership
because it does not consider their background or training in the subject matter." The remaining
factors relate specifically to advocacy organizations and the "full and fair exposition" part of the
regulation.

In Better Business Bureau of Washington, D.C. v. U.S., 326 U.S. 279, 283, 66 S. Ct. 112, 90 L.
Ed. 67 (1945), the Supreme Court held that the “presence of a single . . . [nonexempt] purpose,

Letter 4036 (CG) (11-2005)
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7
if substantial in nature, will destroy the exemption regardless of the number or importance of
truly . . . [exempt] purposes.”

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 Consumer Credit Counseling Service of Alabama, Inc. v. United States, 78-2 U.S.T.C. 9660
(D.D.C. 1978), the court held that an organization that provided free information on budgeting,
buying practices, and the sound use of consumer credit qualified for exemption from income tax
because its activities were charitable and educational.

The Consumer Credit Counseling Service of Alabama is an umbrella organization made up of
numerous credit counseling service agencies. These agencies provided information to the
general public through the use of speakers, films, and publications on the subjects of budgeting,
buying practices, and the sound use of consumer credit. They also provided counseling on
budgeting and the appropriate use of consumer credit to debt-distressed individuals and
families. They did not limit these services to low-income individuals and families, but they did
provide such services free of charge. As an adjunct to the counseling function, they offered a
debt management plan. Approximately 12 percent of a professional counselor's time was
applied to the debt management plan as opposed to education. The agencies charged a
nominal fee of up to $10 per month for the debt management plan. This fee was waived in
instances when payment of the fee would work a financial hardship.

The professional counselors employed by the organizations spent about 88 percent of their time
in activities such as information dissemination and counseling assistance rather than those
connected with the debt management programs. The primary sources of revenue for these
organizations were provided by government and private foundation grants, contributions, and
assistance from labor agencies and United Way. An incidental amount of their revenue was
from service fees. Thus, the court concluded that “each of the plaintiff consumer credit
counseling agencies was an organization described in section 501(c)(3) as a charitable and
educational organization.” See also, Credit Counseling Centers of Oklahoma, Inc v. United
States, 79-2 U.S. Tax Case. 9468 (D.D.C. 1979), in which the facts were virtually identical and
the law was identical to those in Consumer Credit Counseling Service of Alabama, Inc. v. United
States, discussed immediately above.

In Solution Plus, Inc. v. Commissioner, T.C. Memo. 2008-21, the Tax Court held that a credit
counseling organization was not exempt under section 501(c)(3) because it was not organized
and operated exclusively for educational or charitable purposes and impermissibly served

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8
private interests. The organization was formed by an individual with experience selling debt
management plans. The founder and his spouse were the only members of the organization's
board of directors. The organization did not have any meaningful educational program or
materials for providing to people who contacted the organization, and its financial education
seminars for students constituted an insignificant part of the organization’s overall activities.

The Court held that the organization's purposes were not educational because its "activities are
primarily structured to market, determine eligibility for, and enroll individuals in DMPs.” Its
purposes are not to inform consumers "about understanding the cause of, and devising
personal solutions to, consumers’ financial problems," or "to consider the particular knowledge
of individual callers about managing their personal finances." The Tax Court also held that the
organization's purposes were not charitable because "its potential customers are not members
of a [charitable] class that are benefited in a 'non-select manner * * * because they will be turned
away unless they meet the criteria of the participating creditors."

The Tax Court further held the organization would operate for the private interests of its founder
because the founder and spouse were the only directors, the founder was the only officer and
employee, and his compensation was based in part on the organization’s DMP sales activity
levels. The organization was “a family-controlled business that he personally would run for
financial gain, using his past professional experience marketing DMPs and managing a DMP
call center.” The Court further held that the organization's principal activity of providing DMP
services, which were only provided if approved by a caller’s creditors, furthered the benefit of
private interests.

Finally, the Tax Court held that the facts in Credit Counseling Services of Alabama v. United
States, 78-2 U.S.T.C. 9660 (D.D.C. 1978) “stand in stark contrast” because “the sale of DMPs is
the primary reason for [Solution Plus's] existence, and its charitable and educational purposes
are, at best, minimal."

Application of Law

Section 501(c)(3) of the Code sets forth two main tests for an organization to be recognized as
exempt. An organization must be both organized and operated exclusively for purposes
described in section 501(c)(3). Section 1.501(c)(3)-1(a)(1) of the Regulations.

To satisfy the section 501(c)(3) operational test, an organization must establish that it is
operated exclusively for one or more exempt purposes. Section 1.501(c)(3)-1(c)(1) of the
Regulations. You failed to establish that you are operated exclusively for one or more exempt
purposes.

Your Activities Are Not Educational

You are distinguishable from the organizations in Consumer Credit Counseling Service of
Alabama, supra, and Rev. Rul. 69-441 by the methodology you use to conduct your counseling
activities. To date, you have not held any seminars, clinics, workshops or other educational
programs. The only activity that you currently conduct is the provision of foreclosure counseling
and the processing of loan modifications. You typically meet with clients only once for about an

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hour before recommending a particular approach. Clients provide you with basic financial
information as well as information regarding their delinquent mortgage. You do not provide a
written budget analysis to clients. Unlike the organizations in Consumer Credit Counseling
Service of Alabama, supra, and Rev. Rul. 69-441, supra, you do not offer counseling sessions
that are structured primarily to improve your clients’ understanding of their financial problems or
their skills in solving them. While your counselor does explain options to the client, essentially
all of your time is spent filling out the information that is needed to submit a statement of their
financial condition to the lender. Communicating with a homeowner to fill out a financial
worksheet and an intake sheet is not an educational activity because the communication does
not provide a development from the relevant facts that would materially aid a listener or reader
in a learning process. Rev. Proc. 86-43, supra.

You do not provide an ongoing educational program to your clients. Your counseling sessions
are used solely to solicit the information required to submit a statement of financial condition to
the lender in an effort to obtain a loan modification. Finally, a significant amount of your time is
spent on the negotiation process with the lender. Therefore, you failed to establish that your
interactions with clients provide instruction or training “useful to the individual and beneficial to
the community” within the meaning of Section 1.501(c)(3)-1(d)(3)(i) of the Regulations.

You do not operate a substantive on-going educational program. You do not dedicate any
revenue to activities involving educational programs. You do not allocate any expenses to
training employees. Like the organization in Solution Plus, supra, you did not provide evidence
that you help clients develop an understanding of the cause of their financial problems or a plan
to address their financial problems. You provided no evidence that you intend to establish long-
term counseling relationships with your clients. Thus, your activities are not educational within
the meaning of section 501(c)(3).

In addition, you do not meet the requirements for consideration under section 501(q) of the
Code because you do not provide educational information or counseling to the public.

Your Activities Are Not Charitable

All of your time and resources are devoted to providing foreclosure prevention services to
individuals. While you stated that your primary focus is on seniors, you offer your services to
any resident of C. Therefore, your services are not directed exclusively to low-income
individuals or any other recognized charitable class. Accordingly, you are unlike the
organizations described in Consumer Credit Counseling Service of Alabama, supra and Rev.
Rul. 69-441, supra, which aided low-income individuals and families who have financial
problems, thereby relieving the poor and distressed. Thus, you failed to establish that your
activities are charitable within the meaning of Section 501(c)(3) of the Code.

Private Benefit

An organization is not organized or operated exclusively for exempt purposes unless it serves a
public rather than a private interest. See Section 1.501(c)(3)-1(d)(1)(ii) of the Regulations. Your
financial assistance to homeowners in refinancing their mortgages directly benefits the
homeowner by performing a service that they would otherwise have to provide themselves.

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Therefore, you have not demonstrated that your operations serve a public rather than a private
interest as required by Section 1.501(c)(3)-1(d)(1)(ii) of the Regulations.

Conclusion

Based on the facts and information provided, you are not operated exclusively for an exempt
purpose as required by Sections 1.501(c)(3)-1(a)(1) and 1.501(c)(3)-1(c)(1) of the Regulations
because you are not educating your clients nor do you provide your services to poor or
distressed individuals. Any public purposes for which you may operate are only incidental to
your primary nonexempt purpose of assisting clients with obtaining a mortgage modification or
otherwise deal with a foreclosure. You do not serve a public rather than a private interest as
required by Section 1.501(c)(3)-1(d)(1)(ii) of the Regulations. Accordingly, you do not qualify for
exemption as an organization described in Section 501(c)(3) of the Code.

If you don’t agree

You have a right to file a protest if you don’t agree with our proposed adverse determination. To
do so, you must send a statement to us within 30 days of the date of this letter. The statement
must include:

• Your name, address, employer identification number (EIN), and a
daytime phone number

• A copy of this letter highlighting the findings you disagree with

• An explanation of why you disagree, including any supporting
documents

• The law or authority, if any, you are relying on

• The signature of an officer, director, trustee, or other official who is authorized to
sign for the organization, or your authorized representative

• One of the following declarations:

For an officer, director, trustee, or other official who is authorized to sign for the
organization:

Under penalties of perjury, I declare that | examined this protest statement,

including accompanying documents, and to the best of my knowledge and belief,

the statement contains all relevant facts and such facts are true, correct, and
complete.

For authorized representatives:

Under penalties of perjury, I declare that | prepared this protest statement,
including accompanying documents, and to the best of my knowledge and belief,
the statement contains all relevant facts and such facts are true, correct, and

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11
complete.

Your representative (attorney, certified public accountant, or other individual enrolled to practice
before the IRS) must file a Form 2848, Power of Attorney and Declaration of Representative,
with us if he or she hasn't already done so. You can find more information about representation
in Publication 947, Practice Before the IRS and Power of Attorney.

We'll review your protest statement and decide if you provided a basis for us to reconsider our
determination. If so, we'll continue to process your case considering the information you
provided. If you haven't provided a basis for reconsideration, we'll forward your case to the
Office of Appeals and notify you. You can find more information about the role of the Appeals
Office in Publication 892, How to Appeal an IRS Decision on Tax-Exempt Status.

If you don’t file a protest within 30 days, you can’t seek a declaratory judgment in court at a later
date because the law requires that you use the IRS administrative process first (Section
7428(b)(2) of the Code).

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

U.S. mail:

Internal Revenue Service
EO Determinations Quality Assurance
Room 7-008
P.O. Box 2508
Cincinnati, OH 45201

Street address for delivery service:

Internal Revenue Service
EO Determinations Quality Assurance
550 Main Street, Room 7-008
Cincinnati, OH 45202

You can also fax your statement and supporting documents to the fax number listed at the top
of this letter. If you fax your statement, please contact the person listed at the top of this letter to
confirm that he or she received it.

If you agree

If you agree with our proposed adverse determination, you don’t need to do anything. If we don’t
hear from you within 30 days, we'll issue a final adverse determination letter. That letter will
provide information on your income tax filing requirements.

Letter 4036 (CG) (11-2005)
Catalog Number 47630W

12

You can find all forms and publications mentioned in this letter on our website at
www.irs.gov/formspubs. If you have questions, you can contact the person listed at the top of
this letter.

Sincerely,

Director, Exempt Organizations

Enclosure:
Publication 892

Letter 4036 (CG) (11-2005)
Catalog Number 47630W