Charity loses 501(c)(3) status after its funds benefited insiders

Plain-English summary

The IRS revoked a public charity's 501(c)(3) status after an examination found that its money and accounts benefited people with private interests in the organization. The charity and a related nonprofit shared officers, bank access, and financial records, but the charity did not provide requested records showing that transfers, payments, credit-card charges, and an interest-free transaction served exempt purposes. The IRS treated the transactions as private inurement and found that they were substantial compared with the charity's reported activities. It also found multiple transactions, no known safeguards against excess benefits, and no verifiable correction. Because a 501(c)(3) organization cannot allow its net earnings to benefit private shareholders or individuals, the IRS revoked exemption and required the organization to file taxable returns for future years.

Ruling snapshot

• Question: Did the organization continue to operate exclusively for exempt purposes under IRC § 501(c)(3)?
• Outcome: revocation
• Key authorities: IRC §§ 501(c)(3), 4958; Treas. Reg. §§ 1.501(c)(3)-1(a), (c), (f), 1.501(a)-1(c), 53.4958-2, 53.4958-7

Full text (IRS public release)

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

Date:
08/02/2024

Taxpayer ID number (last 4 digits):

Form:

Tax periods ended:

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

Release Number: 202444011
Release Date: 11/1/2024
UIL Code: 501.03.00

Last day to file petition with United States
Tax Court: 10/31/2024

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: You have not
demonstrated that you operated exclusively for charitable, educational, or other exempt purposes within the
meaning of IRC Section 501(c)(3). As such, you failed to meet the requirement of IRC Section 501(c)(3) and
Treasury Regulation Section 1.501(c)(3)-1(a). Additionally, you have not demonstrated that you are operated
exclusively for charitable, educational, or other exempt purposes within the meaning of IRC Section 501(c)(3)
because the organization's assets inured to the benefit of a private shareholder or individual.

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.

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

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. 3-2024)
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.

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).

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 if 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. Visit TaxpayerAdvocate.IRS.gov/contact-us or call 877-777-4778 (TTY/TDD 800-829-4059)
to find the location and phone number of your local advocate. Learn more about TAS and your rights under the
Taxpayer Bill of Rights at TaxpayerAdvocate.IRS.gov. Do not send your Tax Court petition to TAS. Use the
Tax Court address provided earlier in the letter. Contacting TAS does not extend the time to file a petition.

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.

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.

Letter 6337 (Rev. 3-2024)
Catalog Number 74808E

Keep the original letter for your records.

Sincerely,

Lynn A. Brinkley
Director, Exempt Organizations Examinations

Enclosures:

Form 886-A Explanation of Items
Publication 1 Publication 594
Publication 892

Letter 6337 (Rev. 3-2024)
Catalog Number 74808E

Form 886-A
Department of the Treasury - Internal Revenue Service
Explanations of Items

ISSUE

Whether ("          ") operated exclusive for one or more
exempt purposes described under IRC Section 501(c)(3).

FACT

Background of

Per articles of incorporation,          was incorporated on          ,          for          .
          is an          . On          ,          , filed Form 1023 applying for tax-
exempt status under IRC Section 501(c)(3). The IRS approved          's application and
recognized it as a public charity described under IRC Section 501(c)(3) and 170(b)( )( )( )
          's exempt and foundation status remain effective to the present date.

In the letter dated          ,          ,          stated that its activities included          ,
          and          to the          and          to want them.
          primarily serves          with          to the          and          who are also
          . The purpose of          's approach is to          the          with a
(          ) that its          . During these          ,          to
          in          , and then hold          at the
conclusion of, or at          , its          .

In response to Information Document Request (IDR) #1,          provided a list of events it
conducted in          . The examining agent requested details of these events.          was unable to
provide any. Instead,          referred the agent to          conducted by          , a
related 501(c)(3) organization discussed below.          used to maintain a          .
That          is now          .

About

In the past,          engaged in a number of          , including its          ,          , and
          ("          "). The          arose out of          mandate to
assist          ,          at          of          to          .
Beginning in late          and continuing through          ,          the          to a
related nonprofit corporation,          ("          ").

Per Article of Incorporation filed with the State of          ,          was incorporated on
          , for the purpose of          and          and          . Per Article
3, Section 3.1 of its bylaws,          is an          of          who          of
          .

On          ,          , filed a Form 1023-EZ, Streamlined Application for Recognition of
Exemption Under Section 501(c)(3) of the Internal Revenue Code, seeking tax-exempt status
under IRC Section 501(c)(3). On          ,          , the IRS recognized          as a 501(c)(3)
public charity.          public charity status remained effective to the present date.

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

According to          own          ,          recovered          in          .          of          were
from          such as          , where          was paid to provide          .

Per the contract with          ("          "),          provided          to          the
          when they          's          on the          . In an interview with
          -          ,          's          stated that the          prevented          from
          into          . In return,          paid $          for each          provided by
          then paid $          to each          for their          works.

Board Members and Officers of          and

The individuals below were directors and/or officers of both          and          .

1.          , director and officer
2.          , officer (          of          . Lives in          .
3.          , director
4.          , director

About

          signed the Form 1023 as          and president of          .          signed the
Form          in various capacity including president (          -          ) and executive director (          ) of
          . The board minutes show          was a board member.

          signed the Form 1023-EZ as          's president.          has been
serving as          's director and president since its inception.          has access to          and
          's bank accounts.          was the sole signers of the active bank accounts.

Form          Financial Records and Other Information Returns

          reported the following financial information on its          's Form          .

Cash
Total assets
Accounts payable and accrued expenses
Net assets or fund balance
Total liabilities and net assets/fund balance

Income
Investment
Total income
Expenses
Grant
Officer's compensation

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

Management
Office expenses
Travel
Insurance
Fundraising
Total expenses
Total net revenue (          )

          filed a Form          -          for the tax year          reporting          income and $          expenses.
          filed a Form          -          for the tax years          and          .

In response to IDR #1,          provided an          file named          -          -          .
The          file contained the following tabs:

1.          -          's Statement of Financial Position.
2.          -          and          's Statement of Financial Activities.
3.          Balance Sheet -          and          's Balance Sheet.
4.          Income Statement -          and          's Income Statement.
5.          -          's Trial Balance.
6.          - a spreadsheet listing          charges and payments. Account
number and cardholder were not present on this spreadsheet.
7.          -          's          account.
8.          - New - this is a blank tab.
9.          -          's          account ending #          .
10.          -          's          account ending #          .

* Financial data for          was missing tabs          ,          ,          and          .

The          -          tab showed charges for          ,          , as well as
of          ,          ,          ,          ,          ,          ,          , etc. The          -
tab also showed          from          ,          ,          .com,          .com,          , The
          and others.

In the letter dated          ,          ,          's          provided the following
explanation regarding its books and records.

At the          ,          feels it necessary to explain the process it used to
          its IRS Form          for the          tax year. Until          ,          and
          received          accounting and bookkeeping services from          of
          and          did not keep a general ledger via
          or any other similar program. Instead,          and          provided
          with access to their          records.          then met and
conferred with          ,          of          and          about the organizations'
transactions, and thereafter, using          , ran various calculation to
produce returns for          .

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

          notes that as a          , it did not have an          to
          to the IRS. Because it did, however,          is producing concurrently with
this letter, (as IRS          ) what          understands to be the entirety
of          and calculations from the relevant tax year.
Candidly,          has had difficulty interpreting          calculations.

In IDR #2, the examining agent requested missing financial data for          . To date,
          has not provided the missing data.

          was the owner of the following bank and investment account:

1.          Account #          -          -
2.          #
3.          #
4.          #
5.          #
6.          #

          was the signer and had access to the above accounts.

Payments to          and

          's          ending #          showed the following          to          and
for-profit business          .

Date          Payee          Description          Ck #          Amount
/ /
/ /
/ /
/ /
/ /                                      Per diem

          reported the $          payments to          on the tax year          's Form          . It's not
known whether          reported the payments to          on the
Form          .          did not provide a balance sheet or income statement. IRS records show
          did not file a Form          or          to report the          to          and
          .

Transfers to

1. $          ,          to          , on          .

          account #          statement showed the above          to          .
          account ending #          Exhibit          . In response to request for information (IDR #2) on the use of
the $          ,          's representative stated the $          was used for          's activities. The
          did not provide any records to support          statement but stated that          will

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

supplement this response when and if it is able to do so. To date,          has not provided any
substantiations for the use of the $          .

2. $          ,          to          , on          .

          's          statement showed the above          to a          . Exhibit          .

In response to request for information (IDR #2) regarding the $          ,          's
representative stated that          was the          of the          account, which the
          confirmed. The statement showed          used the
$          to          . IRS records show          issued a Form          -          to
          reporting          to          . Per IRS records,          did not issue a
Form          to          .

$          to          to

The          statement shows a $          to          's
account on          . Exhibit          .

In response to request for information (IDR #2) regarding on the use of the $          ,          's
          stated that the $          was a          used to          a          . The
          provided an          statement, which confirmed          bought
          for          . Exhibit          . The statement showed:

          : $          ,
          : $          /day

          returned the $          , without interest to          on          .

Payments to          ' Personal Credit Cards

          's bank statements show payments to credit cards owned by          . Exhibit 5.

Payments to          ,
Payments to
Payments to          ,

Charges to

It must be noted that the          statements provided by          and          were not
corresponding to the IDR. For example, the examining agent requested statements and receipts
for charges or payments made by          . Instead of          providing the statements and receipts,
          provided them. Vice versa. However, all          cards belonged to          .

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

Both          and          paid          credit cards. If a substantiated charge is not accounted for in this
report, it will be accounted for in the report issued to          . Vice versa.

In response to request for credit card statements and receipts to substantiate the charges,
          stated that          was the cardholder and provided statements
for the          cards. The statements confirmed          was the cardholder of
          cards ending:

* #          -          (statements provided for          to          )
* #          -          (statements provided for          to          )

The charges and payments to the account #          -          reflected those listed on the          -          tab
of the          file          -          -          .

The          stated          is not in possession of purchase receipts but will supplement
the response when and if it is able to do so. To date,          has not provided any receipts.

With respect to          charges,          provided          attachments containing responses
to IDRs #2 and 3. A portion of the tables are reproduced below.

/ /          /          Operators          Meeting to discuss new technology for locating
                         Meeting
/ /          /          Community          Business development and Community involvement -
                         Event
/ /          /                             Meeting to discuss new technology for locating
                         Meeting with
/ /          /          Event              Meeting to discuss events and          for
                         Meeting            development and
/ /          /                             for          ,          for case
/ /          /                             for          ,          for case
/ /          /                             for Operations,          with our
                                             reserves

          also provided the following receipts:

1.          (          ) dated          , for $          .
2.          (          ) dated          , for $          .
3.          (          ) dated          , for $          .
4.          (          ) dated          , for $          .
5. The          (          ) date          , for $          .
6.          (lodging) dated          , for $          .
7.          (          ) dated          , for $          .

Catalog Number 20810W Page 6 www.irs.gov Form 886-A (Rev. 5-2017)

Other than the          and the          receipts above,          did not provide any other documents or
information as requested in IDR #2, 3 and 4.

In          ,          purchased a          to use as a          .
          related to the          charged to the          #          -          and          -
          totaled: $          + $          + $          + $          = $          .

          provided receipts for the $          and $          charges.

Charges to          and

In response to IDR #2,          provided one          statement for the period
          to          , which is outside of the          under audit. The statement confirmed          ,
          was the          .

          provided a statement for          ending in #          . The statement contained
account activities from          to          , which is also outside of the          .
Account          is not readily available on the statement. However, the monthly statements
provided          for the same account #          showed          was the          . Most of the
charges were gas.

          did not provide statements for the          .

LAW

IRC Section 501(c)(3) provides for exemption from income tax for corporations, and any
community chest, fund, or foundation, organized and operated exclusively for religious,
charitable, scientific, testing for public safety, literary, or educational purposes, or to foster
national or international amateur sports competition (but only if no part of its activities involve
the provision of athletic facilities or equipment), 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, no substantial part of the activities of which is carrying on propaganda, or otherwise
attempting, to influence legislation (except as otherwise provided in subsection (h)), and which
does not participate in, or intervene in (including the publishing or distributing of statements),
any political campaign on behalf of (or in opposition to) any candidate for public office.

Treasury Regulations (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), an organization must be both
organized and operated exclusively for one or more of the purposes specified in such section. If
an organization fails to meet either the organizational or the operational test, it is not exempt.

Treas. Reg. Section 1.501(c)(3)-1(c)(2) provides that an organization is not operated exclusively
for one or more exempt purposes if its net earnings inure in whole or in part to the benefit of
private shareholders or individuals.

Treas. Reg. Section 1.501(a)-1(c) defines the words private shareholder or individual in section
501 as persons having a personal and private interest in the activities of the organization.

Catalog Number 20810W Page 7 www.irs.gov Form 886-A (Rev. 5-2017)

Treas. Reg. Section 1.501(c)(3)-1(f)(2)(i) provides that, regardless of whether a particular
transaction is subject to excise taxes under section 4958, the substantive requirements for tax
exemption under section 501(c)(3) still apply to an applicable tax-exempt organization described
in section 501(c)(3) whose disqualified persons or organization managers are subject to excise
taxes under section 4958. Accordingly, an organization will no longer meet the requirements for
tax-exempt status under section 501(c)(3) if it fails to satisfy the requirements of paragraph (b),
(c) or (d) of this section.

Treas. Reg. Section 1.501(c)(3)-1(f)(2)(ii) provides that, in determining whether to continue to
recognize the tax-exempt status of an applicable tax-exempt organization (as defined in §§
4958(e) and 53.4958-2) described in section 501(c)(3) that engages in one or more excess
benefit transactions that violate the prohibition on inurement under section 501(c)(3), the
Commissioner will consider all relevant facts and circumstances, including, but not limited to,
the following:

A. The size and scope of the organization's regular and ongoing activities that further exempt
purposes before and after the excess benefit transaction(s) occurred;

B. The size and scope of the excess benefit transaction(s) (collectively, if more than one) in
relation to the size and scope of the organization's regular and ongoing activities that further
exempt purposes;

C. Whether the organization has been involved in multiple excess benefit transactions with one
or more persons;

D. Whether the organization has implemented safeguards that are reasonably calculated to
prevent excess benefit transactions; and

E. Whether the excess benefit transaction has been corrected (within the meaning of
§4958(f)(6) and §53.4958-7), or the organization has made good faith efforts to seek
correction from the disqualified person(s) who benefited from the excess benefit transaction.

All factors should be considered in combination with each other. Depending on the particular
situation, greater or lesser weight may be assigned to some factors than to others. The
safeguard and correction factors will weigh more heavily in favor of continuing to recognize
exemption where the organization discovers the excess benefit transactions and takes action
before the IRS discovers the excess benefit transactions. Further, with respect to the correction
factor, correction after excess benefit transactions are discovered by the IRS, by itself, is never
a sufficient basis for continuing exemption. Regs. §1.501(c)(3)-1(f)(2)(ii).

Founding Church of Scientology v. U.S., 412 F.2d 1197 (Ct. Cl. 1969) involved channeling of an
organization's funds to those in control of the organization. In that case, a wide variety of
devices were employed, including fees, commissions, excessive rental payments, loans and
excessive salaries, to divert the organization's funds to its founder, L. Ron Hubbard, and his
immediate family. The principle of inurement was neatly summarized when the Court stated,
"what emerges from these facts is the inference that the Hubbard family was entitled to make
ready personal use of the corporate earnings." See also John Marshall Law School v. U.S., 81-2
U.S.T.C. 9514 (Ct. Cl. 1981), in which the Court found that the Commissioner acted properly in
revoking exemption under IRC 501(c)(3) on the grounds of inurement to the controlling officers
and their families. The inurement included, but was not limited to, payments to the families as
follows: automobile, education and travel expenses, insurance policies, basketball and hockey

Catalog Number 20810W Page 8 www.irs.gov Form 886-A (Rev. 5-2017)

tickets, membership in a private eating establishment, membership in a health spa, interest-free
loans, home repairs, personal household furnishings and appliances, and golfing equipment

The Court concluded that "nothing we have found in the record dispels the substantial doubts
the court entertains concerning the receipt of benefit by the Hubbards from plaintiff's net
earnings. Since plaintiff has failed to meet its burden of proof, we hold therefore that a part of
the corporate net earnings was a source of benefit to private individuals." Supra, at 1202.

In Church by Mail, Inc. v. Commissioner, 765 F.2d 1387 (9th Cir. 1985), the court found that the
organization was not operated exclusively for an exempt purpose because its income inured to
the benefit of its reverends and their families, who were private persons.

In Association for Honest Attorneys v. Commissioner, T.C. Memo 2018-41, (2018), the court
found that during 2010, 2011, and 2012 petitioner did not, through Ms. Farr or anyone else,
engage primarily in the activities described in its articles of incorporation and its bylaws. It also
found that during 2010, 2011, and 2012 the net earnings of petitioner inured to the benefit of
Ms. Farr, its CEO/board president; petitioner operated primarily for the benefit of private rather
than public interests; and more than an insubstantial part of AHA's activities furthered
nonexempt, private purposes. The court upheld the IRS's decision to revoke petitioner's tax-
exempt status.

The taxpayers have the burden of proofs that they are entitled to deductions. See Hradesky v.
Commission, 540 F.2d 821 (5th Cir. 1976), and Welch v. Helvering, 290 U.S. 111, 115 (1933).

TAXPAYER'S POSITION

          's position is not known.

GOVERNMENT'S POSITION

IRC 501(c)(3) requires an organization to be both "organized" and "operated" exclusively for one
or more IRC 501(c)(3) purposes. If the organization fails either the organizational test or the
operational test, it isn't exempt. See Treas. Reg. 1.501(c)(3)-1(a)(1). The operational test
applies to the organization's activities and how it furthers exempt purposes.

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

An organization is not operated exclusively for one or more exempt purposes if its net earnings
inure in whole or in part to the benefit of private shareholders or individuals. Treas. Reg. Section
1.501(c)(3)-1(c)(2). A private shareholder or individual in section 501 is persons having a
personal and private interest in the activities of the organization.

          was an          with respect to

Catalog Number 20810W Page 9 www.irs.gov Form 886-A (Rev. 5-2017)

          is an          and          .          activities; received compensation (for
          and          ) for          ; had access to          bank accounts and
was the          of these accounts. All these factors show that          has          and
          in the activities of          and was an          with respect to          .

Transfers of          's funds to          constituted inurement

          's claimed that          used the $          for          's          but did not
provide any documents to support          . Instead,          's          stated "the
          will supplement the response when and if the          is able to do so."          has the
burden of establishing that the funds were used for          's          .          has not that satisfied that
burden. Welch v. Helvering, 290 U.S. 111, 115 (1933).

The $          to a          account belonged to          also constituted
          . The $          belonged to          and should not be used to          . IRS
records show          issued a Form          -          to          reporting          to
          .

The $          to purchase a          constituted

The          -          made to          constituted          . Founding          of
          v. U.S. Using the information on the          statement, the examining agent
calculates interest rate on the          as follows:

Date          made                                      / /
Date          repaid                                    / /
Days outstanding

Daily          per          statement
Number of days in a
          principal per          statement
                                                            %

Using the          %          , the examining agent calculated the imputed          as follows:

          from
          rate                                              %

Payments to          constituted

Catalog Number 20810W Page 10 www.irs.gov Form 886-A (Rev. 5-2017)

The          charges were          ,          ,          ,          of          ,
          ,          ,          ,          , etc.          claimed
that the expenditures were for          's          . While the          statements showed
          of          ,          provided          with general explanations along with
          and          . Without other collaborating evidence, which was requested in IDR #2, and to
which          did not provide, the          did not establish the          were related to          and
          's          .

The          could also be related to          and
          &          activities. Note that some of the          also
for          ,          -          business          &          .

The          receipts also did not establish that the other charges such as          ,
          , etc. were related to the activities of          and          . These items are
usually purchased for          .

With respect to the          charged to the          and          ,
since the          was owned by          , any          by          would not be considered for the
benefits of          .

          has the          of establishing that the charges were related to          and          's
          .          v.          , 290 U.S. 111, 115 (1933).          has not satisfied that burden.
Therefore, the payments to          constituted          . See
          v.          .

The same analysis applies to          to          and          . Neither          nor
          provided statements for the          for these          .

This case is similar to          v.          , an          with respect to          used
          's funds for          . The IRS revoked          's tax-exempt status on the ground that it's
          for the          of          than          .

Summary of transactions that constituted

The total          are determined as follows:

          from          to
          from          #          to
          to
          to
          to
          on $          to

Catalog Number 20810W Page 11 www.irs.gov Form 886-A (Rev. 5-2017)

In determining whether to continue to recognize the tax-exempt status of an applicable tax-
exempt organization that engages in one or more          that          the
          on inurement under IRC Section 501(c)(3), all relevant facts and circumstances,
including, but not limited to, the following are taken into account:

1. The size and scope of the          's regular and ongoing activities that further exempt
purposes before and after the          (s) occurred.

Before and during          ,          claimed that it conducted various          .          did not
provide any details of those          . Instead,          referred the examining agents to the
recovery          conducted by          .

          reported          and $          in          .          for          and          is
unknown since          filed a          -          for          . In addition,          's          is now defunct.
These facts indicate          's activities have decreased since          , the          in which the
          occurred.

2. The size and scope of the          or          (          , if more
than one) in relation to the          and scope of the          's regular and ongoing
activities that further exempt purposes

Note that neither          nor          provided details of its          . Therefore, using
total          to measure this element is appropriate.          were
substantial in relation to total          .

Total          per return
                                                            %

3. Whether the organization has been involved in multiple excess benefit transactions with one
or more persons

          was a          and president of          .          had access to          's bank
accounts and was the          .          routinely used          's fund for          as if the
funds were          . The          included paying          ,
withdrawing funds for          use and making          -          to          .

4. Whether the          has implemented safeguards that are reasonably calculated to
prevent excess benefit transactions; and

The examining agent is not aware of any implemented safeguards.

5. Whether the          has been corrected, or the          has made
good faith efforts to seek correction from the          (s) who benefited from the
          .

Catalog Number 20810W Page 12 www.irs.gov Form 886-A (Rev. 5-2017)

No verifiable evidence that the          were corrected.

CONCLUSION

          was not operated exclusive for one or more exempt purposes described under IRC
Section 501(c)(3).          's net earning inured to the benefit of          , an          . Therefore,
          's tax-exempt status under IRC Section 501(c)(3) should be revoked effective          .
          is required to file a tax return Form          ,          , for all
future years.

Catalog Number 20810W Page 13 www.irs.gov Form 886-A (Rev. 5-2017)