IRS revokes a charity's exemption after it failed to provide audit records

Plain-English summary

The IRS revoked an organization's § 501(c)(3) status after it did not provide records requested during an audit. The IRS repeatedly mailed examination and delinquency notices and made numerous telephone calls, but the organization did not produce documents showing its receipts, expenditures, or activities. Without those records, the organization could not establish that it remained organized and operated exclusively for exempt purposes or that its earnings did not benefit private persons. The IRS relied on IRC §§ 6001 and 6033, their regulations, and Revenue Ruling 59-95, which require exempt organizations to maintain and provide records needed to verify continued qualification. The revocation was effective on the redacted date stated in the letter, and the organization was instructed to file corporate income-tax returns for periods after July 15, 2023.

Ruling snapshot

• Question: Did the organization establish that it continued to qualify for exemption under IRC § 501(c)(3) after repeated requests for audit records?
• Outcome: Revocation
• Key authorities: IRC §§ 501(a), 501(c)(3), 511, 6001, and 6033(a)(1); Treas. Reg. §§ 1.501(c)(3)-1, 1.6001-1, and 1.6033-1(h)(2); Rev. Rul. 59-95

Full text (IRS public release)

Department of the Treasury Date:
Internal Revenue Service 01/21/2026
Tax Exempt and Government Entities Taxpayer ID number (last 4 digits):

Form:

Release Number: 202632022
Release Date: 8/7/26
UIL Code: 501.03-00

Tax periods ended:

Last day to file petition with United States
Tax Court:

04/21/2026
CERTIFIED MAIL - Return Receipt Requested

Dear [redacted]

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 [redacted]. Your determination letter dated [redacted] 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 under Section 501(a) must be both
organized and operated exclusively for exempt purposes. You have failed to produce documents to establish
that you are organized 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 sections 6001 and 6033(a)(1) of the Code 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. 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.

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,
Digitally signed by
Lynn A. Brinkley
Date: 2026.01.20
13:36:37 -05'00'

Lynn A. Brinkley
Director, Exempt Organizations Examinations

Enclosures:

Publication 1
Publication 594
Publication 892

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

Department of the Treasury Date:
Internal Revenue Service
Tax Exempt and Government Entities Taxpayer ID number:

Form:

Tax periods ended:

Person to contact:

ID number:
Telephone:

Manager's contact information:

ID number:
CERTIFIED MAIL — Return Receipt Requested Telephone:

Response due date:

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

If you agree
If you haven't already, please sign the enclosed Form 6018, Consent to Proposed Action, and return it to the
contact person shown at the top of this letter. We'll issue a final adverse letter determining that you aren't an
organization described in IRC Section 501(c)(3) for the periods above.

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.

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.

Letter 3618 (Rev. 3-2024)
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,

Group Manager

Enclosures:
Form 886-A
Publication 3498
Publication 892
Form 6018
Form 4621-A

Letter 3618 (Rev. 3-2024)
Catalog Number 34809F

Form 886A Department of the Treasury » Internal Revenue Service Schedule No. or
Explanation of Items Exhibit

Name of — Year/Period Ended

Date of Notice:

issues:

Whether [redacted] (the organization), which qualified for exemption from
Federal income tax under Section 501(c)(3) of the Internal Revenue Code, should be
revoked due to its failure to respond and produce records to substantiate that the

organization is meeting the organizational and operational tests?

Facts:

[redacted] applied for tax-exempt status by filing the Form [redacted],
Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the
Internal Revenue Code, on [redacted], and was granted tax-exempt status as a
501(c)(3) on [redacted], with an effective date of [redacted].

An organization exempt under 501(c)(3) needs to be organized and operated
exclusively for religious, charitable, scientific, testing for public safety, literary or
educational purposes and to foster national and amateur sports competition.

The organization was selected for audit to ensure that the activities and operations align
with their approved exempt status.

The organization failed to respond to the Internal Revenue Service attempts to obtain
information to perform an audit of Form [redacted] for the tax year ending February [redacted].

The Form 1023 application list the phone number of [redacted] for the primary
contact of The [redacted].

Per the State of [redacted] website, it lists the organization's status as active.

• Correspondence for the audit was as follows:

o Letter 6031 (Rev. 09-2022), Initial Exam Appointment, with attachments, was
mailed to the organization on [redacted]. This letter was not returned by
the post office as being undeliverable.

o Letter 1477 (Rev. 5-2022), Follow-Up - Exempt Organizations Compliance
Area, with attachments, was mailed certified to the organization on [redacted].
Electronic Return Receipt was marked as Delivered Front
Desk/Reception/Mail Room on [redacted], at 8:54AM in [redacted].
This letter was not returned by the post office as being undeliverable.

o Letter 5077-B (Rev. 1-2017), TE/GE IDR Delinquency Notice, was mailed to
the organization, on [redacted]. This letter was not return by the post office
as being undeliverable. Electronic Return Receipt was marked as Delivered
Left with Individual on [redacted], at 9:32AM in [redacted]. This letter
was not returned by the post office as being undeliverable.

• Telephone contact for the audit was as follows:

o [redacted], Tax Compliance Officer (TCO) called the phone number listed
on the Form [redacted] application for the primary contact [redacted].
Person who answered confirmed that it is the [redacted]
organization and said they will need their supervisor and then hung up
abruptly.

o [redacted], TCO called [redacted] [redacted] and it went
straight to voicemail and said TCO couldn't leave message because
voicemail box was full.

o [redacted], TCO called [redacted] [redacted]. Person who
answered the phone said the director will call back after TCO gave position in
IRS, badge number and phone number [redacted].

o [redacted], TCO called [redacted] [redacted]. Person who
answered confirmed it was [redacted] and then hung up when TCO
introduced himself as part of Internal Revenue Service.

o [redacted], TCO called the [redacted] [redacted]. Went
straight to full voicemail box twice when calling.

o [redacted], TCO called the [redacted] [redacted]. Organization
instructed TCO to call new director's phone number [redacted] and
authorized Representative's phone number [redacted].

o [redacted], TCO called authorized representative's phone number [redacted],
and it went to voicemail box and TCO left a message for authorized
representative to give a call back to phone number [redacted].

o [redacted], TCO called new director's phone number [redacted]. The
authorized officer who is the new director stated that the address I've been
sending mail to is correct. New director also stated that no mail
correspondence was received during the examination.

o [redacted], TCO called [redacted] to inform new director that a Letter
was delivered just barely at 9:32am today and left with an individual getting
this information from the USPS website.

o [redacted], TCO called [redacted] to ask about the if the organization
will have the response for the information document request by the due date.
It went to voice mail and left a message for the organization to call the TCO
back at [redacted].

o [redacted], TCO called [redacted] to follow-up since no callback was
heard. Person who answered the phone call stated, “Why do you keep calling
me bro?” and then hung up.

Law:

Internal Revenue Code (IRC) 501(c)(3) of the Code provides that an organization
organized and operated exclusively for charitable or educational purposes is exempt from
Federal income tax, provided no part of its net earnings inures to the benefit of any private
shareholder or individual.

IRC 511 Section of the Internal Revenue Code imposes a tax at corporate rates under
section 11 on the unrelated business taxable income of certain tax-exempt organizations.

IRC 6001 Section 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 6033(a)(1) Section 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.

Treasury Regulations (Regulation) 1.501(c)(3)-1 In order to be exempt under
§501(c)(3) the organization must be both organized and operated exclusively for one or
more of the purposes specified in the section. (religious, charitable, scientific, testing for
public safety, literary or educational).

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

Form 886A Department of the Treasury - Internal Revenue Service Schedule No. or
Explanation of Items Exhibit

Name of a Year/Period Ended

Regulation 1.501(c)(3)-1(a)(1) of the regulations states 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 test or the operational test, it is not
exempt.

Regulation 1.501(c)(3)-1(c)(1) of the regulations provides that an organization will not be
regarded as "operated exclusively” for one or more exempt purposes described in section
501(c)(3) of the Code if more than an insubstantial part of its activities is not in furtherance
of a 501(c)(3) purpose. Accordingly, the organization does not qualify for exemption under
section 501(c)(3) of the Code.

Regulation 1.6001-1(c) of the Code provides that such permanent books and records as
are required by paragraph (a) of this section with respect to the tax imposed by section
511 on unrelated business income of certain exempt organizations, every organization
exempt from tax under section 501(a) shall keep such permanent books of account or
records, including inventories, as are sufficient to show specifically the items of gross
income, receipts and disbursements. Such organizations shall also keep such books and
records as are required to substantiate the information required by section 6033. See
section 6033 and §§ 1.6033-1 through 1.6033-3.

Regulation 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.

Regulation 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.

Regulation 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.

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

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

Form 886A Department of the Treasury - Internal Revenue Service Schedule No. or
Explanation of Items Exhibit

Name of Taxpayer: [redacted]
Year/Period Ended: [redacted]

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.

Organization’s Position
Taxpayer's position is unknown at this time.
Government's Position

Based on the above facts, the organization did not respond to verify that they are
organized and operated exclusively for one or more of the purposes specified in IRC
Section 501(c)(3). If an organization fails to meet either the organizational test or the
operational test, it is not exempt.

In accordance with the above-cited provisions of the Code and regulations under
sections 6001 and 6033, organizations recognized as exempt from federal income tax
must meet certain reporting requirements. These requirements relate to the filing of a
complete and accurate annual information (and other required federal tax forms) and
the retention of records sufficient to determine whether such entity is operated for the
purposes for which it was granted tax-exempt status and to determine its liability for any
unrelated business income tax.

Section 1.6033-1(h)(2) of the regulations specifically state that exempt organizations
shall submit additional information for the purpose on enabling the Internal Revenue
Service to inquire further into its exempt status.

Using the rationale that was developed in Revenue Ruling 59-95, the Organization's
failure to provide requested information should result in the termination of exempt
status.

Conclusion:

Based on the foregoing reasons, the organization does not qualify for exemption under
section 501(c)(3) and its tax-exempt status should be revoked.

It is the IRS's position that the organization failed to establish that it meets the reporting
requirements under IRC 6001 and 6033 to be recognized as exempt from federal
income tax under IRC 501(c)(3). Furthermore, the organization has not established
that it is observing the conditions required for the continuation of its exempt status or

that it is organized and operated exclusively for an exempt purpose. Accordingly, the
organization's exempt status is revoked effective [redacted].

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

Form 886 A Department of the Treasury + Internal Revenue Service Schedule No. or
Explanation of Items Exhibit
Year/ Period Ended

Name of Taxpayer: [redacted]
Year/Period Ended: [redacted]

Form 1120, U.S. Corporation Income Tax Return, should be filed for the tax
periods after July 15, 2023.

Form 886-A (Rev. 4-68)

Department of the Treasury - Internal Revenue Service

Page: -6-