Inactivity and missing records cost a private foundation its exemption

Plain-English summary

A private foundation was formed to support science, technology, education, and related economic development. Its annual returns repeatedly reported no charitable activities, no qualifying distributions, and assets valued in the millions, while significant portions of the returns were blank or zero. The organization did not provide the records or cooperation the IRS requested to examine its receipts, expenses, assets, liabilities, and activities. The IRS concluded that the foundation had not shown it operated exclusively for charitable, educational, or scientific purposes and revoked its Section 501(c)(3) exemption.

Ruling snapshot

• Question: Did the private foundation remain eligible under Section 501(c)(3) despite reporting no charitable activity and failing to provide records for examination?
• Outcome: Revocation effective January 1 of the redacted year.
• Key authorities: IRC §§ 170, 501(c)(3), 6001, 6033(a)(1), and 7428; Treas. Reg. § 1.501(c)(3)-1

Full text (IRS public release)

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
1100 Commerce Street, MC 4920DAL
Dallas, TX 75242

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

Date: September 30, 2020

Number: 202110038
Release Date: 3/12/2021

UIL: 501.03-00
Taxpayer ID Number: [redacted]
Form: [redacted]
Tax Period(s) Ending: [redacted]
Person to Contact: [redacted]
Identification Number: [redacted]
Telephone Number: [redacted]
Fax Number: [redacted]

CERTIFIED MAIL — Return Receipt Requested
LAST DAY FOR FILING A PETITION WITH THE TAX COURT: [redacted]

Dear [redacted]:

This is a final determination that you do not qualify for exemption from federal income tax
under Internal Revenue Code (IRC) Section 501(a) as an organization described in IRC
Section 501(c)(3), effective January 1, 20XX. Your determination letter dated August 15,
20XX is revoked.

Our adverse determination as to your exempt status was made for the following reasons:

Organizations described in IRC Section 501(c)(3) and exempt from tax under
IRC Section 501(a) must be both organized and operated exclusively for
exempt purposes. You have failed to produce documents or otherwise
demonstrate that you are operated exclusively for exempt purposes and that
no part of your net earnings inure to the benefit of private shareholders or
individuals. You failed to respond to repeated requests to allow the Internal
Revenue Service to examine your records regarding your receipts,
expenditures, or activities as required by IRC Sections 6001 and 6033(a)(1)
and the regulations thereunder.

As such, you failed to meet the requirements of IRC Section 501(c)(3) and Treasury
Regulations Section 1.501(c)(3)-1(a), in that you have not established that you were
organized and operated exclusively for exempt purposes.

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

Organizations that are not exempt under IRC Section 501 generally are required to file federal
income tax returns and pay tax, where applicable. For further instructions, forms, and
information please visit www.irs.gov.

If you decide to contest this determination, you may file an action for declaratory judgment
under the provisions of IRC Section 7428 in one of the following three venues: 1) United States
Tax Court, 2) the United States Court of Federal Claims, or 3) the United States District Court
for the District of Columbia. A petition or complaint in one of these three courts must be filed
within 90 days from the date this determination was mailed to you. Please contact the clerk of
the appropriate court for rules and the appropriate forms for filing petitions for declaratory
judgment by referring to the enclosed Publication 892. You may write to the courts at the
following addresses:

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

U. S. Court of Federal Claims
717 Madison Place, NW
Washington, DC 20439

U. S. District Court for the District of Columbia
333 Constitution Ave., N.W.
Washington, DC 20001

Processing of income tax returns and assessments of any taxes due will not be delayed if you
file a petition for declaratory judgment under IRC Section 7428.

We'll notify the appropriate state officials (as permitted by law) of our determination that you
aren't an organization described in IRC Section 501(c)(3).

You may be eligible for help from the Taxpayer Advocate Service (TAS). TAS is an independent
organization within the IRS that can help protect your taxpayer rights. TAS can offer you help if
your tax problem is causing a hardship, or you've tried but haven't been able to resolve your
problem with the IRS. If you qualify for TAS assistance, which is always free, TAS will do
everything possible to help you. Visit www.taxpayeradvocate.irs.gov or call 1-877-777-4778.

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

You can get any of the forms or publications mentioned in this letter by calling 800-TAX-FORM
(800-829-3676) or visiting our website at www.irs.gov/forms-pubs.

If you have questions, you can contact the person listed at the top of this letter.

Enclosures:
Publication 892

Sincerely,

Sean E. O'Reilly
Director, Exempt Organizations Examinations

2

Department of the Treasury
Internal Revenue Service
Tax Exempt and Government Entities

Date: 12/20/2019
Taxpayer ID number: [redacted]
Form: [redacted]
Tax periods ended: [redacted]

Person to contact:
Name: [redacted]
ID number: [redacted]
Telephone: [redacted]
Fax: [redacted]
Address: [redacted]

CERTIFIED MAIL — Return Receipt Requested

Manager's contact information:
Name: [redacted]
ID number: [redacted]
Telephone: [redacted]
Response due date: [redacted]

Dear [redacted]:

Why you’re receiving this letter
We enclosed a copy of our audit report, Form 886-A, Explanation of Items, explaining that we propose to revoke
your tax-exempt status as an organization described in Internal Revenue Code (IRC) Section 501(c)(3).

If you agree
If you haven’t already, please sign the enclosed Form 6018, Consent to Proposed Action, and return it to the

contact person shown at the top of this letter. We'll issue a final adverse letter determining that you aren't an
organization described in IRC Section 501(c)(3) for the periods above.

After we issue the final adverse determination letter, we’ll announce that your organization is no longer eligible
to receive tax deductible contributions under IRC Section 170.

If you disagree

1. Request a meeting or telephone conference with the manager shown at the top of this letter.

2. Send any information you want us to consider.

3. File a protest with the IRS Appeals Office. If you request a meeting with the manager or send additional
   information as stated in 1 and 2, above, you’ll still be able to file a protest with IRS Appeals Office after
   the meeting or after we consider the information.

The IRS Appeals Office is independent of the Exempt Organizations division and resolves most disputes
informally. If you file a protest, the auditing agent may ask you to sign a consent to extend the period of
limitations for assessing tax. This is to allow the IRS Appeals Office enough time to consider your case.
For your protest to be valid, it must contain certain specific information, including a statement of the
facts, applicable law, and arguments in support of your position. For specific information needed for a
valid protest, refer to Publication 892, How to Appeal an IRS Determination on Tax-Exempt Status.

Fast Track Mediation (FTM) referred to in Publication 3498, The Examination Process, generally doesn’t
apply now that we’ve issued this letter.

Letter 3618 (Rev. 8-2019)
Catalog Number 34809F

4. Request technical advice from the Office of Associate Chief Counsel (Tax Exempt Government Entities)

if you feel the issue hasn’t been addressed in published precedent or has been treated inconsistently by the
IRS.

If you’re considering requesting technical advice, contact the person shown at the top of this letter. If you
disagree with the technical advice decision, you will be able to appeal to the IRS Appeals Office, as
explained above. A decision made in a technical advice memorandum, however, generally is final and
binding on Appeals.

If we don't hear from you
If you don't respond to this proposal within 30 calendar days from the date of this letter, we'll issue a final
adverse determination letter.

Contacting the Taxpayer Advocate Office is a taxpayer right

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that can help protect your
taxpayer rights. TAS can offer you help if your tax problem is causing a hardship, or you've tried but haven't
been able to resolve your problem with the IRS. If you qualify for TAS assistance, which is always free, TAS
will do everything possible to help you. Visit www.taxpayeradvocate.irs.gov or call 877-777-4778.

Additional information
You can get any of the forms and publications mentioned in this letter by visiting our website at
www.irs.gov/forms-pubs or by calling 800-TAX-FORM (800-829-3676).

If you have questions, you can contact the person shown at the top of this letter.

Sincerely,

Maria Hooke

Director, Exempt Organizations Examinations
Enclosures:
Form 886-A
Form 6018

Letter 3618 (Rev. 8-2019)
Catalog Number 34809F

Form 886A
Department of the Treasury - Internal Revenue Service
Explanation of Items
Schedule No. or [redacted]
Name of Taxpayer: [redacted]
Year/Period Ended
20XX/December

Issue
Whether [redacted] is operating as a private foundation under
IRC 501(c)(3) of the Internal Revenue Code (“IRC”) sufficiently enough that tax-exempt
status should be continued?

Facts
Organizational and Exemption History
(“[redacted]”) was incorporated under the nonprofit
laws of the state of [redacted] on March 5, 20XX. [redacted] was listed as the lone
incorporator of the [redacted].

In November 20XX, the Foundation submitted Form 1023 an Application for the
Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code (Rev.
June 20XX). The application stated that the [redacted] was a 501(c)(3) science and
education non-profit corporation established to:

• Foster and support the development of science and technology;

• Stimulate development of science/technology-based commercial,
National Defense, and National Security businesses;

• Generate science and technology jobs;

• Provide science and technology educational opportunities by
collaboration with local tech. schools, colleges, and universities.

The [redacted] had no past activities, but stated that their present activities were:

“[redacted]”

Form 886-A (Rev. 4-68)
Department of the Treasury - Internal Revenue Service

Page: -1-

Form 886A
Department of the Treasury - Internal Revenue Service
Explanation of Items
Schedule No. or [redacted]
Name of Taxpayer: [redacted]
Year/Period Ended

20XX/December

Future activities were stated to be:

• Foster and support the development of science and technology;

• Stimulate development of science/technology-based commercial,
National Defense, and National Security businesses;

• Generate science and technology jobs;

• Provide science and technology educational opportunities by
collaboration with local tech. schools, colleges, and universities
via a TEAM/[redacted] paradigm.

Per Form 1023, Part X (Public Charity Status), line 1a, the [redacted] requested to be
classified as a private foundation.

Form 1023, Part V (Compensation and Other Financial Arrangements With Your
Officers, Directors, Trustees, Employees, and Independent Contractors) listed

[redacted] and [redacted] as the only directors for the [redacted]. Form 1023, Part XI (User
Fee Information) recorded the name and signature for [redacted]. This section
was signed on May 21, 20XX.

Based on information supplied in the Form 1023 application and related attachments,
the [redacted] was granted exemption under IRC 501(c)(3) as a private foundation on
August 15, 20XX. The exemption was effective as of the date of incorporation (March
15, 20XX).

The attempts to conduct an examination

On March 22, 20XX, an initial appointment Letter 3611, Information Document Request
(“IDR”) 01 and Publication 1 was sent via certified mailing to:

[redacted]

The purpose of the letter and document request was to solicit an original or copy of the
delinquent 20XX Form 990-PF return. The 20XX return was needed to conduct an
official examination. At the time the initial appointment letter was issued, the 20XX Form
990-PF had not been filed. The response due date to the letter and document request

expired on April 2, 20XX.

Form 886-A (Rev. 4-68)
Department of the Treasury - Internal Revenue Service
Page: -2-

Form 886A
Department of the Treasury - Internal Revenue Service
Explanation of Items
Schedule No. or [redacted]
Name of Taxpayer: [redacted]
Year/Period Ended
20XX/December

On April 10, 20XX, a phone call was made to [redacted] at [redacted] to follow-
up on information mailed on 3/22/20XX. [redacted] stated that he was to follow-up
with [redacted] with respect to the information requested but needed additional
time. Based on the conversation with [redacted], an extension up to 5/2/20XX was
granted for compliance.

On May 2, 20XX, a follow-up call was made to [redacted]. No one answered the

phone. Consequently, Revenue Agent (“RA”) left a voice mail message at the
[redacted] number. As there was no response to the voice mail message left on May 2, another
call was made to the [redacted] number on May 11, 20XX.

On May 11, 20XX, RA spoke with [redacted] who still did not have a copy of the
Form 990-PF return for 20XX. [redacted] was unable to provide a definite time period in
which the return would be submitted and suggested that RA speak with the other
director, [redacted]. RA requested that [redacted] have director
[redacted] call with details and a more specific time period.

On May 15, 20XX, [redacted] left a voice mail message stating that he had
received our audit request information from [redacted] and that he was sending a
copy of the delinquent 20XX return to our offices. A copy of the delinquent Form 990
return was received on May 30, 20XX.

Subsequent to the receipt of the delinquent 20XX Form 990-PF return, a second IDR
was issued to examine the items reported on the return. IDR 02 was dated on July 1,
20XX with a response due date of July 13, 20XX.

On July 13, 20XX, RA made a phone call to [redacted] and [redacted] with
respect to the second document request. There was no response to the phone call from
[redacted] or [redacted].

From July 13 through September 19, calls were made to both directors of the [redacted]
to get the examination in process. No appointments were scheduled nor mailed
responses received with respect to the second document request. Therefore, RA issued
the following letters to both directors noted on the return:

• Letter 5077-D (Delinquency Notice) issued on 9/19/20XX due
on 10/3/20XX;

• Letter 5077-A (Pre-Summons Letter) issued on 3/28/20XX due
on 4/8/20XX

Form 886-A (Rev. 4-68)
Department of the Treasury - Internal Revenue Service
Page: -3-

Form 886A
Department of the Treasury - Internal Revenue Service
Explanation of Items
Schedule No. or [redacted]
Name of Taxpayer: [redacted]
Year/Period Ended

20XX/December

No appointment was scheduled, or documents provided with respect to the 5077 letters
and IDR 02 submitted. All correspondence was sent via certified mailing.

After a plethora of phone calls and voice mail messages left to both [redacted] and
[redacted], from April 10, 20XX through August 16, 20XX, without any response, the RA
left a message on the phones of each director indicating the next step would be the
issuance of a summons for the documents previously requested.

On September 3, 20XX, RA prepared Form 2039 (Summons) and sent it via certified
mailing to an address associated with [redacted]. The response due date for the
summons was September 16, 20XX. The summons response due date came and went
without any reply from either of the directors of the [redacted].

Review of the Forms 990-PF returns

The 20XX Form 990-PF was the initial return being selected for examination. However,
the [redacted] failed to respond to document requests and other inquiries to effectively
conduct an examination. Consequently, RA was unable to examine any books and
records to verify income, expenses, assets or liabilities, interview the directors related to
the [redacted], or tour any facility holding assets noted on the return.

Thus, a review of the 990-PF returns from 20XX through 20XX was undertaken to show,
at a minimum, what was reported. For each year noted, contribution income and/or
administrative expenses, depending on the tax year was reported on the returns. (See
Exhibit A)

From copies of Schedule B (Schedule of Contributors), [redacted] was listed as
the primary contributor to the [redacted] for the years noted. From 20XX through
20XX, no expenses were reported, yet there was no corresponding increasing cash
assets noted on the balance sheet.

A further review revealed that significant sections of the 990-PF returns were either
incomplete, had zeros or was blank. This included:

• Part III, Analysis in Changes in Net Assets or Fund Balances. All amounts in this
section were zeros;
• Part IV-Capital Gains/Losses for Tax on Investment Income listed “none”;
• Part V — Qualification under Section 4940(e) for Reduced Tax on Net Investment
Income. All fields were blank.
• Part VI — Excise Tax Based on Investment Income. Fields had zeros.

Form 886-A (Rev. 4-68)
Department of the Treasury - Internal Revenue Service

Page: -4-

Form 886A
Department of the Treasury - Internal Revenue Service
Explanation of Items
Schedule No. or [redacted]
Name of Taxpayer: [redacted]
Year/Period Ended

20XX/December

• Part X — Minimum Investment Return section contained zeros.
• Part XI — Distributable Amount section also contained zeros.

• Part XII — Qualifying Distributions typically had an expense amount similar to the
amount of contributions, but had zeros for the remaining part of the section;

• Part XV — Supplementary Information — Grants and Contributions Paid during the
Year or Approved for Future Payment. This section was blank;

• Part XVI-A — Analysis of Income Producing Activities was blank; and

• Part XVI-B — Relationship of Activities to the Accomplishment of Exempt Purpose
section was blank as well.

The balance sheet for each year only listed ending assets with a book or fair market
value equal to or in excess of $0 million dollars. (See Exhibit A) Disposition of assets
from a prior year were not reflected in the subsequent year filing of a specific Form 990-
PF return.

For each year, the [redacted] stated that it had not conducted any charitable activities
for one reason or another. (See Exhibit B) All returns were prepared and signed by
[redacted].

Law

Internal Revenue Code section 501(c)(3) provides for the exemption from Federal
income tax of corporations organized and operated exclusively for religious,
charitable, literary, scientific, and educational purposes; no part of the net earnings of
which inures to any private shareholder or individual.

Section 1.501(c)(3)-1(a)(1) of the income Tax Regulations provides that in
order to qualify for exemption an organization must be both organized and
operated exclusively for one or more exempt purposes. Failure to meet either
the organizational or operational test will disqualify an organization from
exemption under section 501(c)(3).

Treasury Regulations section 1.501(c)(3)-1(c)(1) states that, 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. Thus, in
construing the meaning of the phrase "exclusively for educational purposes" in Better

Form 886-A (Rev. 4-68)
Department of the Treasury - Internal Revenue Service
Page: -5-

Form 886A
Department of the Treasury - Internal Revenue Service
Explanation of Items
Schedule No. or [redacted]
Name of Taxpayer: [redacted]
Year/Period Ended

20XX/December

Business Bureau v. United States, 326 U.S. 279 (1945), the Supreme Court of the
United States stated, "This plainly means that the presence of a single non-educational
purpose, if substantial in nature, will destroy the exemption regardless of the number or
importance of truly educational purposes."

Treasury Regulations section 1.501(c)(3)-1(d)(i) provides that an organization may
be exempt as an organization described in section 501(c)(3) if it is organized and
operated exclusively for one or more of the following purposes:

(a) Religious,

(b) Charitable,

(c) Scientific,

(d) Testing for public safety,

(e) Literary,

(f) Educational, or

(g) Prevention of cruelty to children or animals.

Treasury Regulations section 1.501(c)(3)-1(d)(ii) provides that an organization is not
organized or operated exclusively for one or more of the purposes specified in
subdivision (i) of this subparagraph unless it serves a public rather than a private
interest. Thus, to meet the requirement of this subdivision, it is necessary for an
organization to establish 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.
Moreover, even though an organization may have exempt purposes, it will not be
considered as operating exclusively for such purposes, if more than an insubstantial
part of its activities serves private interests.

Treasury Regulations section 1.501(c)(3)-1(d)(iii) Since each of the purposes
specified in subdivision (i) of this subparagraph is an exempt purpose in itself, an
organization may be exempt if it is organized and operated exclusively for any one or
more of such purposes. If, in fact, an organization is organized and operated exclusively
for an exempt purpose or purposes, exemption will be granted to such an organization
regardless of the purpose or purposes specified in its application for exemption. For
example, if an organization claims exemption on the ground that it is “educational”,
exemption will not be denied if, in fact, it is “charitable”.

Form 886-A (Rev. 4-68)
Department of the Treasury - Internal Revenue Service
Page: -6-

Form 886A
Department of the Treasury - Internal Revenue Service
Explanation of Items
Schedule No. or [redacted]
Name of Taxpayer: [redacted]
Year/Period Ended

20XX/December

Treasury Regulations section 1.501(c)(3)-1(d)(3)(i) provide that the term educational
includes the instruction of the public on subjects useful to the individual and beneficial to

the community.

Treasury Regulations section 1.501(c)(3) -1(d)(2) Charitable defined. —The term
“charitable” is used in section 501(c)(3) in its generally accepted legal sense and is,
therefore, not to be construed as limited by the separate enumeration in section
501(c)(3) of other tax-exempt purposes which may fall within the broad outlines of
“charity” as developed by judicial decisions. Such term includes: Relief of the poor and
distressed or of the underprivileged; advancement of religion; advancement of
education or science; erection or maintenance of public buildings, monuments, or
works; lessening of the burdens of Government; and promotion of social welfare by
organizations designed to accomplish any of the above purposes, or (i) to lessen
neighborhood tensions; (ii) to eliminate prejudice and discrimination; (iii) to defend
human and civil rights secured by law; or (iv) to combat community deterioration and
juvenile delinquency. The fact that an organization which is organized and operated for
the relief of indigent persons may receive voluntary contributions from the persons
intended to be relieved will not necessarily prevent such organization from being
exempt as an organization organized and operated exclusively for charitable purposes.
The fact that an organization, in carrying out its primary purpose, advocates social or
civic changes or presents opinion on controversial issues with the intention of molding
public opinion or creating public sentiment to an acceptance of its views does not
preclude such organization from qualifying under section 501(c)(3) so long as it is not
an “action” organization of any one of the types described in paragraph (c)(3) of this
section.

Treasury Regulations section 1.501(c)(3)-1(d)(3)(1) defines educational as

(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.

An organization may be educational even though it advocates a particular position or
viewpoint so long as it presents a sufficiently full and fair exposition of the pertinent facts
as to permit an individual or the public to form an independent opinion or conclusion. On
the other hand, an organization is not educational if its principal function is the mere
presentation of unsupported opinion.

Form 886-A (Rev. 4-68)
Department of the Treasury - Internal Revenue Service
Page: -7-

Form 886A
Department of the Treasury - Internal Revenue Service
Explanation of Items
Schedule No. or [redacted]
Name of Taxpayer: [redacted]
Year/Period Ended

20XX/December

In Stevens Bros. Foundation, Inc. v. Commissioner, 324F 2d 633 (10th Cir. 1963)
affirming 39 T.C. 93 (1962) organization's exemption was revoked for failure to operate
exclusively for charitable purposes where it entered into a partnership with and
advanced funds to a for-profit entity owned and controlled by the organization's
directors. The for-profit entity needed the funds to obtain construction contracts, which
ultimately proved profitable. The court reasoned that the organization engaged in the
transactions substantially for the purpose of benefiting its founders.

Treasury Regulations section 1.501(c)(3)-1(d)(5)(i) states that since an organization
may meet the requirements of section 501(c)(3) only if it serves a public rather than a

private interest, a “scientific” organization must be organized and operated in the public
interest. Therefore, the term “scientific” includes the carrying on of scientific research in

the public interest.

Government’s Position

The intended purpose of the [redacted] was to:

• Foster and support the development of science and technology;

• Stimulate development of science/technology-based commercial,
National Defense, and National Security businesses;

• Generate science and technology jobs;

• Provide science and technology educational opportunities by
collaboration with local tech. schools, colleges, and universities.

And based upon those intended purposes, the [redacted] was granted exemption
under IRC 501(c)(3) as a private foundation.

Per the filed Forms 990-PF, Part IX-A (Summary of Direct Charitable Activities), the
[redacted] has repeatedly stated that it did not conduct any activities during the year it operated.
This statement was made on every Form 990-PF returned filed, as noted in Exhibit B.

As a private foundation, the [redacted] is required to make minimum distributions on
the assets that it holds. Per Exhibit A, the [redacted] reports inventories for sale or
other assets in the millions, yet never made one qualifying distribution in the intended
examination period (20XX) or any period before or after that time.

Form 886-A (Rev. 4-68)
Department of the Treasury - Internal Revenue Service
Page: -8-

Form 886A
Department of the Treasury - Internal Revenue Service
Explanation of Items
Schedule No. or [redacted]
Name of Taxpayer: [redacted]
Year/Period Ended

20XX /December

A superficial review of the Form 990-PF returns reflects the receipt of contribution
income, yet no other assets other than inventories for sale/use or “other assets” are
reported. The information on the return appears to be grossly incorrect, but not being
able to fully examine that information has prevented the Service from performing its
duties to the general public. And further determining if the [redacted] is operating for
the purposes under which it was granted exemption.

While the [redacted] has been compliant in filing Forms 990-PF, it has failed to show
that it is operating as a charitable, educational, scientific or any other type of
organization enough to retain tax exempt status.

In egregiously failing to respond to multiple repeated requests for examination, the
[redacted] has failed to show that it merits exempt status as a private foundation

The Law is clear. To be considered tax-exempt, an organization must be organized and
operating as a tax-exempt organization. By its own claims and its neglect, The [redacted]
has shown that it is not operating for tax-exempt purposes.

Taxpayer’s Position

The Taxpayer has not advocated a position regarding the revocation of its exempt
status.

Conclusion

Based upon the regulations and Code, we hold that your organization is not operated
exclusively for any charitable, educational or scientific purpose, thereby defeating the
retention of exemption. Therefore, we have concluded that you do not qualify for
exemption from Federal income tax as an organization described in section 501(c)(3) of
the Code.

Revocation of your exempt status will be effective as of January 1, 20XX. In accordance
with this determination, you are required to file Federal income tax returns on Form
1120. Contributions to your organization are no longer deductible by donors under
section 170(c)(2) of the Code.

Form 886-A (Rev. 4-68)
Department of the Treasury - Internal Revenue Service
Page: -9-

Form 886A
Department of the Treasury - Internal Revenue Service
Explanation of Items
Schedule No. or [redacted]
Name of Taxpayer: [redacted]
Year/Period Ended

20XX /December

In accordance with the provisions of section 6104(c) of the Code a copy of this letter will

be sent to the appropriate State officials.

On December 2, 20XX, the D.C. Circuit ruled that the Service will disclose our denials

and revocations under section 6110 effective August 1, 20XX.

Form 886-A (Rev. 4-68)
Department of the Treasury - Internal Revenue Service

Page: -10-