The IRS revoked a social welfare organization's exemption

Plain-English summary

The IRS revoked an organization's section 501(c)(4) tax exemption after it repeatedly failed to provide records needed for an examination. The organization also failed to file required annual and quarterly returns. Without the requested information, the organization could not establish that it operated for exempt social welfare purposes or that its net earnings did not benefit private persons. The IRS relied on sections 6001 and 6033, their regulations, and Revenue Ruling 59-95. The revocation package includes the final determination, the earlier proposed revocation, and the examination report.

Ruling snapshot

• Question: Did the organization remain eligible for section 501(c)(4) exemption after failing to provide examination records and file required returns?
• Outcome: Revocation
• Key authorities: IRC §§ 501(c)(4), 6001, and 6033; Treas. Reg. §§ 1.501(c)(4)-1 and 1.6033-2(i)(2); Rev. Rul. 59-95

Full text (IRS public release)

Department of the Treasury Date: June 23, 2021
Internal Revenue Service

IRS Tax Exempt and Government Entities Taxpayer ID number:
Form:
Tax periods ended:
Release Number: 202251008
Release Date: 12/23/2022 Person to contact:
UIL CODE: 501.04-00 Name:
ID number:
Telephone:
Fax:

CERTIFIED MAIL - RETURN RECEIPT REQUESTED
Dear .

Why we are sending you this letter

This is a final determination that you don’t qualify for exemption from federal income tax under Internal
Revenue Code (IRC) Section 501(a) as an organization described in IRC Section 501(c)(4), for the tax
periods above. Your determination letter dated , is revoked.

Our adverse determination as to your exempt status was made for the following reasons: You have failed to
produce documents to establish that you are operated exclusively for exempt purposes within the meaning of
IRC Section 501 (c)(4), and that no part of your net earnings inure to the benefit of private shareholders or
individuals. You failed to respond to repeated reasonable requests to allow the Internal Revenue Service to
examine your records regarding your receipts, expenditures or activities as required by IRC Sections 6001, 6033
(a)(1) and Rev. Rul. 59-95, 1959-1 C.B. 627.

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.

What you must do if you disagree with this determination
If you want to contest our final determination, you have 90 days from the date this determination letter was
mailed to you to file a petition or complaint in one of the three federal courts listed below.

How to file your action for declaratory judgment

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.

Please contact the clerk of the appropriate court for rules and the appropriate forms for filing an action for
declaratory judgment by referring to the enclosed Publication 892, How to Appeal an IRS Detennination on
Tax-Exempt Status. You may write to the courts at the following addresses:

United States Tax Court U.S. Court of Federal Claims US. District Court for the District of Columbia
400 Second Street, NW 717 Madison Place, NW 333 Constitution Ave., N.W.
Washington, DC 20217 Washington, DC 20439 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.

Letter 6337 (12-2020)
Catalog Number 74808E

Information about the IRS Taxpayer Advocate Service

The IRS office whose phone number appears at the top of the notice can best address and access your tax
information and help get you answers. However, you may be eligible for free help from the Taxpayer Advocate
Service (TAS) if you can't resolve your tax problem with the IRS, or you believe an IRS procedure just isn't
working as it should. TAS is an independent organization within the IRS that helps taxpayers and protects
taxpayer rights. Contact your local Taxpayer Advocate Office at:

Or call TAS at 877-777-4778. For more information about TAS and your rights under the Taxpayer Bill of Rights,
go to taxpayeradvocate.irs.gov. Do not send your federal court pleading to the TAS address listed above. Use
the applicable federal court address provided earlier in the letter. Contacting TAS does not extend the time to
file an action for declaratory judgment.

Where you can find more information
Enclosed are Publication 1, Your Rights as a Taxpayer, and Publication 594, The IRS Collection Process, for
more comprehensive information.

Find tax forms or publications by visiting www.irs.gov/forms or calling 800-TAX-FORM (800-829-3676).
If you have questions, you can call the person shown at the top of this letter.

If you prefer to write, use the address shown at the top of this letter. Include your telephone number, the best
time to call, and a copy of this letter.

Keep the original letter for your records.

Sincerely,
Sean E. O'Reilly
Director, Exempt Organizations Examinations

Enclosures:
Publication 1
Publication 594
Publication 892

Letter 6337 (12-2020)
Catalog Number 74808E

Department of the Treasury Date: January 8, 2021

Internal Revenue Service Taxpayer ID number:
IRS Tax Exempt and Government Entities

Form:
Tax periods ended:

Person to contact:
Name:
ID number:
Telephone:
Fax:
Address:

Manager’s contact information:
Name:
ID number:

Telephone:
Response due date:

CERTIFIED MAIL — Return Receipt Requested
Dear

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)(4).

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)(4) 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.

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

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.

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.

For 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).

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

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

Sincerely,

Karen T. Hood Digitally signed by Karen T. Hood
Date: 2021.01.08 14:03:56 -05'00'
for

Sean E. O’Reilly
Director, Exempt Organizations
Examinations

Enclosures:
Form 886-A
Form 6018
Publication 892
Publication 3498

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

Department of the Treasury — Internal Revenue Service Schedule number
Form 886-A

Explanations of Items or exhibit

Name of taxpayer Tax Identification Number (last 4 digits) | Year/Period ended
Issue
Whether should be revoked for lack of response in
not providing information regarding receipts, expenditures, activities; and not filing required forms
for years through ; and quarterly forms for tax periods ended through
Facts
( ) formed , according to

Secretary of State office. Your full Articles of Incorporation is not viewable from the Secretary
of State’s website. You were granted exemption under Section 501(c)(4) of the Code

Your activities are described in Form as providing to and
surrounding areas. Regulations 1.501(c)(4)-1(a)(2)(i) provides that an organization operates exclusively for
the promotion of social welfare if it is primarily engaged in promoting in some way the common good and
general welfare of the community.

Your organization was initially selected for a non-audit compliance check in for failure to file
forms for tax periods ended through . Three letters were issued
requesting these non-filed returns:

• Letter 4204 (Rev. 3-2018) with attachments were mailed to you , with a response
date of

• Letter 3854 (Rev. 5-2015) with attachments were mailed to you , with a response
date of

• Letter 4221 (Rev. 5-2014) was mailed to you , Notifying you that your case was

being forwarded for examination consideration because we had not heard from you.
You were selected for audit to ensure examined organizational activities and operations align your
approved exempt status. In addition, you were selected for audit to file required returns and to ensure
compliance with federal tax requirements.

You failed to respond to all Internal Revenue Service attempts to obtain information to perform an audit

of Form for tax period ending, , and to file all required tax returns. To-date, you
have not filed forms for years through ; and quarterly forms for tax periods ended
through . We show Form for year ending , is on

extension through
• Correspondence for the audit was as follows:
o Letter 3611 (Rev.8-2019) with attachments were mailed to you on , with
a response date of , for mail-in response; and

at 9:00 am EST for a virtual conference telephone interview.

o Letter 5798 (Rev.10-2016) with attachments were mailed to you on

Catalog Number 20810W Page 1 www.irs.gov Form 886-A (Rev. 5-2017)

Department of the Treasury - Internal Revenue Service Schedule number
Form 886-A

or exhibit

Explanations of items

Name of taxpayer Tax Identification Number (last 4 digits) | Year/Period ended

with a response date of

Letter 5077-D (9-2016) with attachments were mailed to you on , with
a response date of .

• Telephone contacts for the audit was as follows:

o

, Revenue Agent (RA) called the telephone number listed on form return for
year ending , for who is listed on form as
board officer and chief. Left voicemail message.

, RA called . Left voice mail following up on recent letter
issued to them, and to return call.

, RA called board officer, . Left voicemail following up on
recent letter issued to them for info due today. Left message to return call today.

, RA called board officer-chief, , and board officer,
. Left voicemail message to return the call. Reminded them of conference call
scheduled for tomorrow, .

, RA called board officers and . Spoke with
, who stated _is not a board officer, and no board officer was there.
said was not allowed to provide a board officer's direct telephone number. Per
, on some days a board officer may come into the
disconnected the call when asked to confirm my office number provided to —. |
called back and no answer. Left voice mail message for board officers.

, RA called board officers and . Left voice mail
message for a board officers to return the call.

, RA called board officer . voicemail didn’t operate, so
not able to leave a message. Called board officer . Left reminder
message to send requested documents and to return the call.

, RA called board officers and for status of
second request for documents. No voicemail operated to leave message at
telephone. Left voicemail message at telephone to return the call
including

, RA called board officers and . No answer and

no voicemail operated for . voicemail was full so unable to
leave a message.

, No response. RA called and no answer. RA called
and his voicemail box is full, so unable to leave a message.

Catalog Number 20810W Page 2 www.irs.gov Form 886-A (Rev. 5-2017)

Department of the Treasury — Internal Revenue Service Schedule number
Form 886-A

Explanations of Items or exhibit

Name of taxpayer Tax Identification Number (last 4 digits) | Year/Period ended

Law

Internal Revenue Code (IRC) §1.61-1 of the regulations provides that Gross income means all income
from whatever source derived, unless excluded by law. Gross income includes income realized in any form,
whether in money, property, or services. Income may be realized, therefore, in the form of services, meals,
accommodations, stock, or other property, as well as in cash.

IRC §6001 of the Code provides that every person liable for any tax imposed by this title, or for the
collection thereof, shall keep such records, render such statements, make such returns, and comply with
such rules and regulations as the Secretary may from time to time prescribe. Whenever in the judgment of
the Secretary it is necessary, he may require any person, by notice served upon such person or by
regulations, to make such returns, render such statements, or keep such records, as the Secretary deems
sufficient to show whether or not such person is liable for tax under this title.

IRC §1.6001-1(e) of the Code provides that the books or records required by this section shall be kept at all
time available for inspection by authorized internal revenue officers or employees, and shall be retained as
long as the contents thereof may be material in the administration of any internal revenue law.

IRC §6033(a)(1) of the Code provides, except as provided in section 6033(a)(2), every organization exempt
from tax under section 501(a) shall file an annual return, stating specifically the items of gross income,
receipts and disbursements, and such other information for the purposes of carrying out the internal
revenue laws as the Secretary may by forms or regulations prescribe, and keep such records, render under
oath such statements, make such other returns, and comply with such rules and regulations as the
Secretary may from time to time prescribe.

Section 1.6033-2(i)(2) of the Income Tax Regulations provides, in part, that every organization exempt
from tax must submit information the IRS may inquire into its tax-exempt status. Failure to comply with our
request for information could result in loss of your exempt status.

Federal Tax Regulations (FTR) §1.6033-1(h)(2) of the regulations provides that every organization which
has established its right to exemption from tax, whether or not it is required to file an annual return of
information, shall submit such additional information as may be required by the district director for the
purpose of enabling him to inquire further into its exempt status and to administer the provisions of
subchapter F (section 501 and the following), chapter 1 of the Code and section 6033.

Rev. Rul. 59-95, 1959-1 C.B. 627, concerns an exempt organization that was requested to produce a
financial statement and statement of its operations for a certain year. However, its records were so
incomplete that the organization was unable to furnish such statements. The Service held that the failure or
inability to file the required information return or otherwise to comply with the provisions of section 6033 of
the Code and the regulations which implement it, may result in the termination of the exempt status of an
organization previously held exempt, on the grounds that the organization has not established that it is
observing the conditions required for the continuation of exempt status.

Catalog Number 20810W Page 3 www.irs.gov Form 886-A (Rev. 5-2017)

Form 886-A Department of the Treasury - Internal Revenue Service schedule number
Explanations of Items
Name of taxpayer Tax Identification Number (last 4 digits) | Year/Period ended

IRC § 6652(c)(1) of the Code provides that in the case of a failure to file a return required under section
6033 on the date and in the manner prescribed therefore (determined with regard to any extension of time
for filing), unless it is shown that such failure is due to reasonable cause there shall be paid (on notice and
demand by the Secretary and in the same manner as tax) by the exempt organization or trust failure to file,
$20 for each day during which such failure continues, but the maximum amount imposed hereunder on any
organization for failure to file any one return shall not exceed the lesser of $10,000 or five (5) percent of the
gross receipts of the organization for the year. In the case of an organization having gross receipts
exceeding $1,000,000 for any year, there is a $1,000 per day penalty for failure to file with a maximum
penalty of $50,000.

Taxpayer's Position

position is not known.

Government’s Position

failed to respond to all attempts to contact them.
is requested to provide comments and records to verify they comply with 501(c)(4) of the Code.
is requested to file all required forms and quarterly forms

Under Section 1.6033-2(i)(2) of the Regulations, every organization exempt from tax, whether or not it is
required to file an annual information return, shall submit additional information as may be required by the
Internal Revenue Service for the purpose of inquiring into its exempt status. During the examination,
several requests for information were made, but you failed to supply the requested information. The
organization has clearly failed to provide the requested information despite adequate notice as required by
Section 1.6033-2(i)(2) of the Regulations.

Revenue Ruling 59-95 states if an exempt organization fails to comply with the requirements of Section
6033 of the Code and its corresponding Regulations, the organization will no longer qualify for exempt
status. As described in the previous paragraph, your organization has not complied with Section 1.6033-
2(i)(2) of the Regulations since no reply to information document requests have been received. Per
Revenue Ruling 59-95, you do not qualify for exempt status under Section 501(c)(3) of the Code since your
organization has failed to provide the required information as prescribed by Regulations of Section 6033 of
the Code.

Conclusion:

Based on the preceding reasons, you do not qualify for exemption under section 501(c)(4) and your tax-
exempt status should be revoked.

You failed to provide required information to our requests concerning your organizations’ exempt status per
Section 6033 of the Code; and our requests to file required returns. You failed to meet reporting
requirements under sections 6001 and 6033 to be recognized as exempt from federal income tax under
501(c)(4) of the Internal Revenue Code. As described in Revenue Ruling 59-95, you do not qualify for
exempt status under Section 501(c)(4) of the Code because you failed to comply with Regulations under

Catalog Number 20810W Page 4 www.irs.gov Form 886-A (Rev. 5-2017)

Department of the Treasury — Internal Revenue Service Schedule number
Form 886-A

Explanations of Items or exhibit

Name of taxpayer Tax Identification Number (last 4 digits) | Year/Period ended

Section 6033 of the Code. Accordingly, your exempt status is revoked effective . Form
returns should be filed for tax periods ending after

Catalog Number 20810W Page 5 www.irs.gov Form 886-A (Rev. 5-2017)