Exempt status revoked for failure to provide records

Plain-English summary

The IRS selected a section 501(c)(3) public charity's filing for examination and repeatedly requested financial, organizational, and operational records. The organization did not respond to mailed requests or telephone messages and did not provide the information needed to examine its activities. Exempt organizations must maintain records and make them available for inspection under sections 6001 and 6033 and the related regulations. Because the organization could not establish that it continued to satisfy the operational test, the IRS revoked its exemption. The final letter explains that the organization could seek declaratory review in one of three federal courts within 90 days.

Ruling snapshot

• Question: Should the organization's section 501(c)(3) status be revoked because it failed to respond to the examination and produce records?
• Outcome: Revoked
• Key authorities: IRC §§ 501(a), 501(c)(3), 6001, 6033, and 7428; Treas. Reg. §§ 1.6001-1 and 1.6033-2; Rev. Rul. 59-95

Full text (IRS public release)

Department of the Treasury Internal Date:
Revenue Service 06/29/2023

IRS Tax Exempt and Government Entities Taxpayer ID number (last 4 digits):

Form:

Release Number: 202346031 Tax periods ended:

Release Date: 11/17/2023

UIL Code: 501.03-00 Person to contact:
Name:
ID number:
Telephone:
Fax:

Last day to file petition with United States
Tax Court: 09/27/2023

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)(3), effective

; . Your determination letter dated , is revoked.

>

Our adverse determination as to your exempt status was made for the following reasons: Organizations
described in section 501(c)(3) of the Internal Revenue Code and exempt from tax under section 501(a) must be
both organized and operated exclusively for exempt purposes. You have failed to produce documents or
otherwise establish that you are organized and operated exclusively for exempt purposes and that no part of your
net earnings inures to the benefit of private shareholders or individuals. You failed to respond to repeated,
reasonable requests to allow the Internal Revenue Service to examine your records regarding your receipts,
expenditures, or activities as required by I.R.C. sections 6001, 6033(a)(1), Treasury Regulation section
1.6033-2(i)(2) 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 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 can file an action for declaratory judgment under the provisions
of Section 7428 of the Code in either:

* The United States Tax Court,

* The United States Court of Federal Claims, or

* The United States District Court for the District of Columbia

You must file a petition or complaint in one of these three courts within 90 days from the date we mailed this
determination letter to you. You can download a fillable petition or complaint form and get information about
filing at each respective court's website listed below or by contacting the Office of the Clerk of the Court at one
of the addresses below. Be sure to include a copy of this letter and any attachments and the applicable filing fee
with the petition or complaint.

Letter 6337 (Rev. 8-2022)
Catalog Number 74808E

You can eFile your completed U.S. Tax Court petition by following the instructions and user guides available
on the Tax Court website at ustaxcourt.gov/dawson.html. You will need to register for a DAWSON account to
do so. You may also file your petition at the address below:

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

The websites of the U.S. Court of Federal Claims and the U.S. District Court for the District of Columbia contain
instructions about how to file your completed complaint electronically. You may also file your complaint at one of
the addresses below:

US Court of Federal Claims

717 Madison Place, NW

Washington, DC 20439

uscfc.uscourts.gov

US District Court for the District of Columbia
333 Constitution Avenue, NW

Washington, DC 20001

dcd.uscourts.gov

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.

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:

Internal Revenue Service
Taxpayer Advocate Office

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 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.

Letter 6337 (Rev. 8-2022)
Catalog Number 74808E

You may fax your documents to the fax number shown above, using either a fax machine or online fax service.
Protect yourself when sending digital data by understanding the fax service's privacy and security policies.

Keep the original letter for your records.

Sincerely,

Lynn A. Brinkley

Director, Exempt Organizations Examinations

Enclosures:
Publication 1
Publication 594
Publication 892

Letter 6337 (Rev. 8-2022)
Catalog Number 74808E

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

CERTIFIED MAIL Return Receipt Requested

Dear
Why you're receiving this letter

If you agree

Date:
July 29, 2022
Taxpayer ID number:

Form:
Tax periods ended:

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

Manager's contact information:
Name:
iD number:
Telephone:
Response due date:
August 30, 2022

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.

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.

. 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.

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

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,

for Lynn A. Brinkley
Acting Director, Exempt Organizations Examinations

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

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

Form 886-A, Department of the Treasury ~ Internal Revenue Service Schedule number or exhibit
(May 2017) Explanation of Items Exhibit 1
Name of taxpayer Tax Identification Number (last 4 digits) | Year/Period ended
ISSUE
Whether the tax-exempt status of (Organization), which qualified for

exemption as an organization described in Section 501(c)(3) of the Internal Revenue Code (IRC), should be
revoked duc to Organization’s failure to respond and produce records.

FACTS
Organization was incorporated on , , as a nonprofit corporation under the laws of the State of
As stated in its Articles of Incorporation, Organization’s purpose is "[t]o and

the - ” Organization's Charitable Organization
Registration Statement filed with the Attorney General of similarly describes Organization’s
purpose as “[t]o [of] and ”

Organization filed a Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the
Internal Revenue Code, which was received by the Internal Revenue Service on , - On

, the IRS issued a determination letter recognizing Organization as tax-exempt under IRC Section
501(c)(3) effective , . The letter stated that Organization is classified as a public charity
under IRC sections 509(a)(2). To date, this determination has not been changed.

Organization’s Form 990-N for the tax period ended ; , was selected for examination to
ensure that Organization operates in accordance with its exempt purpose(s), thus continuing to qualify for
recognition as exempt from federal income taxes. Organization has not filed a Form 990 for the tax period
ended ; . Organization did, however, file Forms 990-N for the prior and subsequent tax
years ended ; and ; , respectively.

Organization failed to respond to multiple attempts by the Internal Revenue Agent to obtain information
needed to complete the examination. More specifically, the Revenue Agent sent letters
containing a Letter 6031, Form 4564 Information Document Request (IDR), and attachments. The IDR
requested financial, organizational, and operational information for the year under examination.

of the letters were confirmed as delivered to the recipients, with the remaining
returned as undeliverable to the IRS, as follows:

Date Mailed Address Delivery Status Address Source

Organization's Form 990-N for
tax year ended
, indicates this is
Organization’s mailing address
and Principal Officer
’s address.

>

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

Form 886-A Department of the Treasury ~ Internal Revenue Service Schedule number or exhibit
(May 2017) Explanation of Items Exhibit 1
Name of taxpayer Tax Identification Number (last 4 digits) | Year/Period ended
Delivered Organization’s Form 990-N for

tax year ended
, indicates this is
Organization’s mailing address
and Principal Officer
's address.

Secretary of State
filings also indicate this is
Organization’s mailing address
and its Registered Agent

       's mailing address.
Returned as undeliverable Secretary of State
filings indicate this address is
Organization’s principal place
of business and its Registered
Agent     's physical
address.

>

Attorney General

Charitable Organization
Registration filings also indicate
this is Organization’s primary
address and address for service
of process.
Organization’s Forms 990-N for
tax years ended

and :
indicate this is Organization’s
location address,

3

Delivered Residential address of Officer
(Vice President).

signed by

on       ,
In addition, the Revenue Agent attempted to contact Organization by telephone using different phone
numbers identified by reviewing Organization’s Form 1023 Application, Attorney General
Charitable Organization Registration filings, and other publicly available records. On , , the
Revenue Agent called and left a voice message for Officer requesting a return call, All of the

other phone numbers were disconnected with no forwarding number available.

To date, Organization has not responded or otherwise acknowledged the attempts to contact. Moreover,
Organization has not provided any organizational, financial, and other pertinent information about its
operations and activities as requested in the IDR.

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

Form 886-A Department of the Treasury ~ Internal Revenue Service Schedule number or exhibit
(May 2017) Explanation of Items Exhibit 1
Name of taxpayer Tax Identification Number (last 4 digits) | Year/Period ended
LAW

IRC Sections 501(a) and 501(c)(3) provide, in relevant part, the exemption from federal income tax
organizations organized and operated exclusively for religious, charitable, scientific, testing for public
safety, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the
net earnings of which inures to the benefit of any private shareholder or individual.

Treas. Reg. Section 1.501(c)(3)-1(a)(1) provides that in order to be exempt as an organization described in
section 501(c)(3) of the Code, the organization must be one that is both organized and operated exclusively
for one or more of the purposes specified in that section. If an organization fails to meet either the
organizational test or the operational test, it is not exempt.

IRC Section 6001 provides that every person liable for any tax imposed by the IRC, or for the collection

thereof, shall keep adequate records as the Secretary of the Treasury or his delegate may from time to time
prescribe,

Treas. Reg. Section 1.6001-1(a) in conjunction with Treas. Reg, Section 1.6001-1(c) provides that every
organization exempt from tax under IRC Section 501(a) and subject to the tax imposed by IRC Section 511
on its unrelated business income must keep such permanent books or accounts or records, including
inventories, as are sufficient to establish the amount of gross income, deduction, credits, or other matters
required to be shown by such person in any return of such tax, Such organization shall also keep such books
and records as are required to substantiate the information required by IRC Section 6033.

Treas. Reg. Section 1.6001-1(e) states that the books or records required by this section shall be kept at all
times available for inspection by authorized internal revenue 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 Section 6033(a)(1) provides, except as provided in IRC Section 6033(a)(3), every organization exempt
from tax under IRC 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.

Treas. Reg. Section 1.6033-2(i)(2) 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 IRC § 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

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 or exhibit
(May 2017) Explanation of Items Exhibit 1
Name of taxpayer Tax Identification Number (last 4 digits) | Year/Period ended

inability to file the required information return or otherwise to comply with the provisions of IRC Section
6033 and the regulations which implement it, may result in the termination of the exempt status of an
organization previously held exempt, on the grounds that the organization has not established that it is
observing the conditions required for the continuation of exempt status.

TAXPAYER’S POSITION
Taxpayer's position is unknown at this time.
GOVERNMENT’S POSITION/ANALYSIS

Organization’s exempt status should be revoked because Organization has not provided any information to
substantiate that it meets the requirements for continued exempt status.

Organization was previously held exempt as an organization described in IRC Section 501(c)(3). To qualify
as an exempt organization described in section 501(c)(3), Organization must be both organized and operated
exclusively for one or more of the specified purposes. See Treas. Reg. Section 1.501(c)(3)-1(a)(1). As an
exempt organization, Organization is required to maintain records pertinent to its exempt status and make
such records available to the Revenue Agent for inspection. See Treas. Reg. Sections 1.6001-1(a), 1.6001-
1(e), and 1.6033-2(i)(2).

In this case, the Revenue Agent made multiple attempts to contact Organization via       and

to obtain information regarding Organization’s finances and activities. As described above,
Organization did not respond. Organization thus failed to provide any records that would enable the
Revenue Agent to determine whether Organization is operated exclusively for one or more exempt purposes
specified in IRC Section 501(c)(3), as required under Treas. Reg. Section 1.501(c)(3)-1(a)(1).
Organization’s continued exempt status depends on Organization’s ability to establish that it is observing the
required conditions for such exempt status. See Rev. Rul. 59-95. Because Organization failed to fulfill its
records and inspection obligations under IRC Sections 6001 and 6033, Organization cannot establish that it
meets the operational test. Per Treas. Reg. Section 1.501(c)(3)-1(a)(1), Organization is not exempt if it fails
to meet both the organizational and operational tests.

It is the Service's position that Organization failed to meet the requirements to be recognized as exempt from

federal income tax under IRC § 501(c)(3). Accordingly, Organization's exempt status should be revoked
effective

CONCLUSION

Organization does not qualify for exemption from federal income tax under IRC Section 501(c)(3). The

proposed date of the revocation is : . Organization must therefore file the Form 1120 for tax
periods ending on or after

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