Revocation of a 509(a)(3) supporting organization for private benefit, inflated gift-in-kind reporting, and illegal fundraising practices

Plain-English summary

The IRS revoked the tax-exempt status of a supporting organization
recognized under section 509(a)(3), a type of charity that exists to
support one or more specified public charities. This organization was tied
to a related charity and ran a fundraising call center whose main job was
to solicit donations and pass the money to the affiliated charity, with
overlapping officers, directors, and a shared chief financial officer. The
IRS found several problems. The organization did not keep control over
donated gift-in-kind goods it claimed to ship internationally, and it
reported inflated fair-market values for goods obtained from brokers on its
Forms 990, which overstated revenue and made its fundraising and
administrative costs look smaller than they were, violating the accurate
reporting duty of section 6033. The Federal Trade Commission, state
attorneys general, and state charity regulators sued the organization and
its affiliates for deceptive fundraising, a court placed it in
receivership and ordered it dissolved. Because a charity's purposes cannot
be illegal or contrary to public policy, and because the organization no
longer operated exclusively to support its specified charities, the IRS
revoked exemption retroactively to the tax year the investigation began.
Contributions are no longer deductible under section 170. This document
combines the final revocation letter, the earlier proposed-revocation
letter (Letter 3618), and the Form 886-A audit report.

Ruling snapshot

• Question: Does a 509(a)(3) supporting organization keep its
  exemption when it inflates gift-in-kind reporting, serves private
  interests, and is shut down for illegal fundraising?
• Outcome: Revoked (retroactive to the year the investigation began)
• Key authorities: IRC §§ 501(c)(3), 509(a)(3), 6033, 170; Treas. Reg.
  § 1.501(a)-4(b)(1), (e)(1); Rev. Rul. 75-384; Rev. Rul. 80-278; Rev.
  Rul. 71-447; Rev. Proc. 2016-5

Full text (IRS public release)

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
1100 Commerce Street, MC 4920DAL
Dallas, TX 76242
TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

Date: July 11, 2019
Number: 202240020                             EIN:
Release Date: 10/7/2022                       Person to Contact:
Identification Number:
Telephone Number:

UIL: 501.03-00

CERTIFIED MAIL - Return Receipt Requested
LAST DAY FOR FILING A PETITION WITH THE TAX COURT:

Dear

This is a final determination that you do not qualify for exemption from federal income tax under
Internal Revenue Code (the "Code") section 501(a) as an organization described in Code
section 501(c)(3), effective        . Your determination letter dated        is revoked.

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

You are not operated exclusively for exempt purposes within the meaning of Internal
Revenue Code § 501(c)(3). You have not established that your activities exclusively
serve a Charitable class or further any purpose defined in section 501(c)(3).
Furthermore, you are operated for substantial private purposes, including for the benefit
of your Officers, directors, and employees. Your net earnings inure to the benefit of
private shareholders or individuals, such as your officers, directors, and employees.
Furthermore, you are operated for substantial purposes that are illegal and contrary to
public policy. Finally, It is determined that you have become inactive and that there have
been no operations or regular financial activities conducted or planned. As such, you fail
to meet the operational requirements for continued exemption under Internal Revenue
Code § 501(c)(3).

Contributions to your organization are no longer deductible under section 170 of the Internal
Revenue Code.

Organizations that are not exempt under 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 section 7428 of the Code 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. Refer to the enclosed Publication 892 for additional information. 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 20005

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 section 7428 of the Internal Revenue Code.

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.

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

Maria Hooke
Director, EO Examinations

Enclosures:
Publication 892


Department of the Treasury                    Date: September 5, 2017
Internal Revenue Service                      Taxpayer identification Number:
IRS Tax Exempt and Government Entities Division
Form:
Tax year(s) ended:
Person to contact / ID number:
ID No.
Contact numbers:
Phone Number:
Fax Number:
Manager's name / ID number:
ID No.
Manager's contact number:
Phone Number:
Response due date:

Certified Mail - Return Receipt Requested
Dear

Why you are receiving this letter
We propose to revoke your status as an organization described in section 501(c)(3) of the Internal Revenue
Code (Code). Enclosed is our report of examination explaining the proposed action.

What you need to do if you agree
If you agree with our proposal, please sign the enclosed Form 6018, Consent to Proposed Action — Section
7428, and return it to the contact person at the address listed above (unless you have already provided us a
signed Form 6018). We'll issue a final revocation letter determining that you aren't an organization described in
section 501(c)(3).

After we issue the final revocation letter, we'll announce that your organization is no longer eligible for
contributions deductible under section 170 of the Code.

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
revocation letter. Failing to respond to this proposal will adversely impact your legal standing to seek a
declaratory judgment because you failed to exhaust your administrative remedies.

Effect of revocation status
If you receive a final revocation letter, you'll be required to file federal income tax returns for the tax year(s)
shown above as well as for subsequent tax years.

What you need to do if you disagree with the proposed revocation
If you disagree with our proposed revocation, you may request a meeting or telephone conference with the
supervisor of the IRS contact identified in the heading of this letter. You also may file a protest with the

Letter 3618 (Rev. 6-2012)
Catalog Number 34809F


IRS Appeals office by submitting a written request to the contact person at the address listed above within 30
calendar days from the date of this letter. The Appeals office is independent of the Exempt Organizations
division and resolves most disputes informally.

For your protest to be valid, it must contain certain specific information including a statement of the facts, the
applicable law, and arguments in support of your position. For specific information needed for a valid protest,
please refer to page one of the enclosed Publication 892, How to Appeal an IRS Decision on Tax-Exempt Status,
and page six of the enclosed Publication 3498, The Examination Process. Publication 3498 also includes
information on your rights as a taxpayer and the IRS collection process. Please note that Fast Track Mediation
referred to in Publication 3498 generally doesn't apply after we issue this letter.

You also may request that we refer this matter for technical advice as explained in Publication 892. 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 Exempt
Organizations Rulings and Agreements office, no further IRS administrative appeal will be available to you.

Contacting the Taxpayer Advocate Office is a taxpayer right
You have the right to contact the office of the Taxpayer Advocate. Their assistance isn't a substitute for
established IRS procedures, such as the formal appeals process. The Taxpayer Advocate can't reverse a legally
correct tax determination or extend the time you have (fixed by law) to file a petition in a United States court.
They can, however, see that a tax matter that hasn't been resolved through normal channels gets prompt and
proper handling. You may call toll-free 1-877-777-4778 and ask for Taxpayer Advocate assistance. If you
prefer, you may contact your local Taxpayer Advocate at:

Internal Revenue Service
Office of the Taxpayer Advocate

For additional information
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,

Maria Hooke
Director, EO Examinations

Enclosures:
Report of Examination
Form 6018
Publication 892
Publication 3498

Letter 3618 (Rev. 6-2012)
Catalog Number 34809F


Form 886-A          Schedule number or exhibit
Explanations of Items
Name of Taxpayer          Tax Identification Number (last 4 digits)          Year/Period ended

Issues:

1. Whether        (        ) continues to qualify for exemption under Section 501(c)(3) of the Internal Revenue
   Code?

Facts:
Articles of Incorporation
        filed its original Articles of Incorporation in        on        . Its original name at the time of incorporation
was        . Article        ,        , states that        shall be organized and operated exclusively for charitable
purposes and activities as permitted by Section 501(c)(3) of the Internal Revenue Code of 1986 (or the
corresponding provisions of any future United States Internal Revenue law), including, but not limited to the
following purposes:

1. A supporting organization described in section 509(a)(3) of the code to support, benefit, perform the
   functions of and/or carry out the charitable purposes of        (        ), a non-stock corporation described in
   sections 501(c)(3) and 501(a)(1) of the Code, the tax-exempt status of which has been recognized by the
   Internal Revenue Service (IRS).

2. One or more charitable organizations described in sections 501(c)(3) and 501(a)(2) of the Code may be
   substituted for        , conditioned solely upon the occurrence of one or more of the following:
   a.        's loss of its federal tax-exempt status;
   b. The substantial failure or abandonment of        ' charitable operations; or
   c.        's dissolution.

Article        states that "No part of the net earnings of the Corporation shall inure to the benefit of, or be
distributed to, any director or officer of the Corporation or any other private person."

Article        lists the original Board of Directors as:

By-Laws
        filed its original By-Laws in        on        . The By-Laws were signed by        , Secretary.

Article        (c) states that "The Board of Directors shall not permit any part of the net earnings or capital of the
Corporation to inure to the benefit of any director, officer, or other private person or individual."

Article 7.1 (Voting Members) of the By-Laws states that        and        are designated as the initial Board of
Directors of the Corporation.

Form        Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code
        filed its Form        with the        on        . It was signed by        , President.
The Part II, question        continuation sheet stated that        and        , listed directors of        , were also
directors of        .
        received its initial Determination Letter on        , granting exempt status under IRC § 509(a)(3).

Form        
        did not file its Form        for the tax year        .

Operations
Under the direction of        SR.,        created its fundraising organization,        (        ), also d/b/a        in        .
        ' sole purpose was to operate a fundraising call center in        , that solicits        . After expenses,
        gave virtually all funds it had raised to        as "        ".
        was run by        officer(s) since its inception.        employees had served as board members of        ,
undertaking        -related functions during work hours.        board members had also served as        board
members.
        was the chief financial officer of        and received        salary from        .        also served as chief
financial officer of        at least from        through        .        did not pay a salary because part of        job
duties' at        were to be the volunteer president of        , manage        , and keep        president informed
regarding fundraisers' progress.

        has maintained books and records on its computers and has issued        credit cards to        employees
for business use.        ran a        operation based in        ,        . Between        and        ,        raised a total
of $        for        .

[Financial summary table — figures redacted:]
Ending        Ending        
Cash Contributions
Contributions from Fundraising Activities
Total cash contributions
Noncash Contributions
Total noncash contributions

For the period under examination,        expenditures for its charitable grant programs, excluding grants and
other assistance outside the        , averaged approximately        % of total expenditures. The remaining        %
of the expenditures were for administrative (        %) and fundraising expenses (        %).

Grants
Grants or other assistance to gov or org in the        
Payroll
Total        
Administrative, Other
Total functional expenses
% of Grants Paid          %
% Administrative

Ending        Ending        Ending        Ending        
        %          %          %          %
        %          %          %          %
        %          %          %          %

Gifts-In-Kind
Noncash donations, noncash grants, and non-cash goods are referred to as "        ".
        reported receiving        donations during the examination period. Schedules        and        of Form
are used for reporting receipt of donations. For the years        through        , the noncash contributions
received by        are summarized below:

Revenue Activity
Total Revenue

        was involved in an international        program.        indicated on Forms        that goods that
distributed internationally were originated from The        and        . The goods listed on the Forms        were
from The        and from        .

The noncash donations (        goods) that        received and distributed internationally were procured from both
for-profit and non-profit brokers by paying procurement, cost of shipping in, warehousing, and shipping out
fees. These companies are brokers that line up gifts in kind with charities. These        are intended for
international charities, and they need charities, such as        to handle the freight costs. By agreeing to accept
goods and cover the shipping costs,        can credit these shipments toward patient services with a substantial
offset to fundraising costs.

        reported on its Forms        for the years        and        that        received noncash donations from The
Stars Foundation of $        in        and $        from        in        . It further reported that it distributed the
noncash donations received to foreign recipients in        in        and        .

A review of The        Form        for        that it released for public inspection revealed that the        did not claim
any donations of non-cash contributions in        .

A review of        Form        for        that it released for public inspection revealed that        claimed a total of $
in non-cash contributions to        in        .

The Federal Trade Commission Complaint
On        , the Federal Trade Commission, the Secretaries of State for all        , and the        filed a complaint
against        , and other associated charities and individuals,

1.        (        )
2.        (        )
3. The        (        )
4.        , individually and in        capacity as an officer or director of        
5.        , individually and in        capacity as an officer or director of        and        
6.        , individually and in        capacity as an officer or director of        
7.        , individually and in        capacity as an officer or director of        
in the        of        (FTC, States, and        v.        , et al.,        ) (The Complaint). The Complaint alleged that
between        and        ,        and the other defendants collectively:
1. Made misrepresentations that contributions were for charitable purposes.
2. Made misrepresentations about Program Benefits.
3. Made misrepresentations about Revenue and Program Expenses related to International (        ) shipments.
4. Made misrepresentations about programs relating to        .
5. Made false and misleading filings with State Charity Regulators.
6. Provided means and instrumentalities for telemarketers to deceive donors.
7. Assisted and facilitated        violations.

As a result of the complaint,        was shut down and placed in receivership by        and state charity
regulators in        .

Law:
IRC § 509(a)(3) excludes from the definition of "private foundation" those organizations which meet the
requirements of subparagraphs (A), (B), and (C) thereof.

IRC § 509(a)(3)(A) provides that a section 509(a)(3) organization must be organized, and at all times thereafter
operated, exclusively for the benefit of, to perform the functions of, or to carry out the purposes of one or more
specified organizations described in section 509(a)(1) or (2). Section 509(a)(3)(A) describes the nature of the
support or benefit which a section 509(a)(3) organization must provide to one or more section 509(a)(1) or (2)
organizations.

IRC § 509(a)(3)(B) provides that a section 509(a)(3) organization must be operated, supervised, or controlled
by or in connection with one or more organizations described in section 509(a)(1) or (2). Section 509(a)(3)(B)
and paragraph (f) of this section describe the nature of the relationship which must exist between the section
509(a)(3) and section 509(a)(1) or (2) organizations. For purposes of section 509(a)(3)(B), paragraph (g) of this
section defines "operated, supervised, or controlled by"; paragraph (h) of this section defines "supervised or
controlled in connection with"; and paragraph (i) of this section defines "operated in connection with".

Reg § 1.501(a)-4(b)(1) states that under subparagraph (A) of section 509(a)(3), in order to qualify as a
supporting organization, an organization must be both organized and operated exclusively "for the benefit of,
to perform the functions of, or to carry out the purposes of" (hereinafter referred to in this section as being
organized and operated "to support or benefit") one or more specified publicly supported organizations. If an
organization fails to meet either the organizational or the operational test, it cannot qualify as a supporting
organization.

Reg § 1.501(a)-4(e)(1) states that for the Permissible Beneficiaries portion of the Operational Test, a
supporting organization will be regarded as "operated exclusively" to support one or more specified publicly
supported organizations (hereinafter referred to as the "operational test") only if it engages solely in activities
which support or benefit the specified publicly supported organizations. Such activities may include making
payments to or for the use of, or providing services or facilities for, individual members of the charitable class
benefited by the specified publicly supported organization. Similarly, an organization will be regarded as
"operated exclusively" to support or benefit one or more specified publicly supported organizations even if it
supports or benefits an organization, other than a private foundation, which is described in section 501(c)(3)
and is operated, supervised, or controlled directly by or in connection with such publicly supported
organizations. However, an organization will not be regarded as operated exclusively if any part of its activities
is in furtherance of a purpose other than supporting or benefiting one or more specified publicly supported
organizations.

Revenue Ruling 75-384, 1975-2 CB 204, (Jan. 01, 1975) states that as a matter of trust law, one of the main
sources of the general law of charity, no trust can be created for a purpose which is illegal. The purpose is
illegal if the trust property is to be used for an object which is in violation of the criminal law, or if the trust tends
to induce the commission of crime, or if the accomplishment of the purpose is otherwise against public policy.
IV Scott on Trusts Sec. 377 (3d ed. 1967). Thus, all charitable trusts (and by implication all charitable
organizations, regardless of their form) are subject to the requirement that their purposes may not be illegal or
contrary to public policy. See Revenue Ruling 71-447, 1971-2 C.B. 230; Restatement (Second), Trusts (1959)
Sec. 377, Comment (c).

Revenue Procedure 2016-5, 2016-1 I.R.B. 188, Section 12, states that a determination letter recognizing
exemption may be revoked or modified: (1) by a notice to the taxpayer to whom the determination letter was
issued. This Revenue Procedure further provides that the revocation or modification of a determination letter
recognizing exemption may be retroactive if the organization "omitted or misstated a material fact, operated in a
manner materially different from that originally represented."

Government's Position:
Issue 1
It is the Government's position that        does not continue to qualify for exemption under Section 509(a)(3) of
the Internal Revenue Code.        does not meet the operational test for exempt status under section 509(a)(3) of
the Internal Revenue Code because        has failed to establish that all of its activities were in furtherance of
supporting or benefiting one or more specified publicly supported organizations.

Operations
        (        ), also        , started as a special project of the        (        ) in        . Under the direction of        (
       ), it split off from        in late        .        (        ) served as its initial president while also employed at
        .

        sole purpose was to operate a fundraising        in        , that solicited public donations. After expenses,
        gave virtually all funds it had raised to        as "        ".
        was run by        officer(s) since its inception.        employees had served as board members of        ,
undertaking        -related functions during work hours.        board members had also served as        board
members.
        was the chief financial officer of        and received his salary from        .        also served as chief
financial officer of        at least from        through        .        did not pay a salary because part of        job
duties' at        were to be the volunteer president of        , manage        , and keep        president informed
regarding fundraisers' progress.

        has maintained books and records on its computers and has issued        credit cards to        employees
for business use.

Between        and        , the        raised a total of $        for        , and received a total of $        after the
fundraising costs.

Noncash donations, noncash grants, and non-cash goods are referred to as "        ".

        was involved in an        program.        reported receiving        donations during the examination period.
Schedules        and        of Form        are used for reporting receipt of donations. For the years        through
        , the noncash contributions received by        are summarized below:

Revenue Activity
Total Revenue

        indicated on Forms        that goods that        distributed internationally were originated from The        and
        . The goods listed on the Forms        were from The        and from        .

The noncash donations (        goods) that        reported receiving and distributing internationally were procured
from both for-profit and non-profit        by paying procurement, cost of shipping in, warehousing, and shipping
out fees. These companies are brokers that line up gifts in kind with charities. These        are intended for
international charities, and they need charities, such as        to handle the freight costs. By agreeing to accept
goods and cover the shipping costs,        can credit these shipments toward patient services with a substantial
offset to fundraising costs.

        reported on its Forms        for the years        and        that        received noncash donations from The
        of $        in        and $        from        in        . It further reported that it distributed the noncash
donations received to foreign recipients in        in        and        .
A review of The        Form        for        that it released for public inspection revealed that the        did not claim
any donations of non-cash contributions in        .
A review of        Form        for        that it released for public inspection revealed that        claimed a total of $
in non-cash contributions to        in        .

        did not retain control and discretion over the use of the non-cash goods, or maintain records that
established the recipient used the non-cash goods for the organization's IRC § 501(c)(3) purposes.

        incorrectly reported the international non-cash donations (        ) on its Forms        by using the unverified
fair market values of the goods procured from brokers. Instead,        should have reported the total of its
procurement fees on its Forms        as non-cash grants provided.

Form        is used by tax-exempt organizations to provide information required by IRC section 6033. Some
members of the public and/or state agencies rely on Form        as the primary or sole source of information
about a particular organization. How the public perceives an organization in such cases may be determined by
the information presented on its return. Therefore, the return must be complete, accurate, and fully describe
the organization's programs and accomplishments.

        filed Forms        inaccurately by claiming fair market values of goods procured from brokers as non-cash
donations. The transactions represented a flow-through of dollar amounts that were paper transactions only.
        reported the fair market values of goods procured on Forms        as revenue received and expenses paid.
By reporting fair market values of goods procured as revenue,        incorrectly increased the revenue received.
By reporting fair market values of goods procured as expenses,        decreased the overall percentage of
administrative costs and substantially offset its fundraising costs.

        fails to meet IRC section 6033 of the Code which requires every organization exempt from taxation under
501(a) to file an annual return, stating specifically the items of gross income, receipts, and disbursements, and
such other information for the purpose of carrying out the internal revenue laws.

The reported donations are not in keeping with Reg § 1.501(a)-4(e)(1) that states that for the Permissible
Beneficiaries portion of the Operational Test, a supporting organization will be regarded as "operated
exclusively" to support one or more specified publicly supported organizations (hereinafter referred to as the
"operational test") only if it engages solely in activities which support or benefit the specified publicly supported
organizations. The purported shipping of goods internationally do not meet the Permissible Beneficiaries
portion of the Operational Test, in that        did not the donations do not engage solely in activities which
support or benefit the specified publicly supported organizations.

The Federal Trade Commission Complaint
On        , the Federal Trade Commission, the Secretaries of State for all states, and the        filed a complaint
against        , and other associated charities and individuals,

1.        (        )
2.        (        )
3. The        (        )
4.        , individually and in        capacity as an officer or director of        
5.        , individually and in        capacity as an officer or director of        and        
6.        , individually and in        capacity as an officer or director of        
7.        , individually and in his capacity as an officer or director of        
in the        for the District of        (        ,        , and        v.        , et al., Case        ) (The Complaint). The
Complaint alleged that between        and        ,        and the other defendants collectively:
1. Made misrepresentations that contributions were for charitable purposes.
2. Made misrepresentations about Program Benefits.
3. Made misrepresentations about Revenue and Program Expenses related to International (        ) shipments.
4. Made misrepresentations about programs relating to International        .
5. Made false and misleading filings with State Charity Regulators.
6. Provided means and instrumentalities for telemarketers to deceive donors.
7. Assisted and facilitated telemarketing violations.

As a result of the Complaint,        and        entered into an ORDER APPOINTING RECEIVER OVER        ,        ,
AND        by the        for the District of        . The order stated that Receivership Management, Inc.,        , is
appointed by this Court as Liquidating Receiver ("Receiver") with all the rights and privileges of an equity
receiver over        for the purposes of taking charge of        property and assets (except for the Policies),
conducting the necessary steps to wind down the affairs of        , liquidating its assets, dissolving its corporate
existence, and paying all net assets to the        . The order was signed by        as an individual and as an officer
of        on        .

An ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT AGAINST        ,        , AND        was
also issued by the court. In the injunction, the court further ordered that, pursuant to the Receivership Order of
which        has consented to entry, the Receiver shall take the steps necessary to cause        to be dissolved
and to cease to exist as a corporate entity. This Order of Permanent Injunction was also signed on        .

The findings by the court in        suit clearly prove that        was involved in fundraising practices that in conflict
with express statutory restrictions of the        and all        (        ) states and the        . With this court decision,
        fails to meet Revenue Ruling        (        ) requirements that the organization's activities are not contrary to
a clearly defined and established public policy.

As a result of the complaint,        was shut down and placed in receivership by        and state charity regulators
in        .

        fails to meet Revenue Ruling 80-278, 1980-2 CB 175, (        ) that provides that in making the
determination of whether an organization's activities are consistent with exemption under section 501(c)(3) of
the Code, the Service will rely on a three-part test. The organization's activities will be considered permissible
under section 501(c)(3) if:
(1) The purpose of the organization is charitable;
(2) The activities are not illegal, contrary to a clearly defined and established public policy, or in conflict with
    express statutory restrictions; and
(3) The activities are in furtherance of the organization's exempt purpose and are reasonably related to the
    accomplishment of that purpose.

Summary:
        does not continue to qualify for exemption under Section 509(a)(3) of the Internal Revenue Code.
        does not meet the operational test for exempt status under section 509(a)(3) of the Internal Revenue Code
because        has failed to establish that all of its activities were in furtherance of supporting or benefiting one
or more specified publicly supported organizations.

        fails to meet IRC section 6033 of the Code which requires every organization exempt from taxation under
501(a) to file an annual return, stating specifically the items of gross income, receipts, and disbursements, and
such other information for the purpose of carrying out the internal revenue laws. As part of        involvement
in        programs,        caused its Forms        to report inaccurate donations and expenditures not allowing
members of the public and/or state agencies to receive accurate information about this organization.

In a suit filed by the        , the Secretaries of State for all        , and the        filed a complaint against        ,
        was found to be in violation of        and all        ' and the        statutes involving        and filing false
reports to the states. As a result of the        suit,        and        entered into an Order Appointing Receiver Over
        by the        for the District of        . The order stated that the receiver was appointed by this Court as
Liquidating Receiver for the purposes of taking charge of        property and assets, liquidating its assets, and
dissolving its corporate existence. The order was signed by        as an individual and as an officer of        on
        . The order effectively dissolved        as a operating corporation.

With the above facts taken into consideration, it is determined that        exempt status should be revoked back
to the tax year ending        , the beginning of the investigation.