Electronic-waste facility loses tax-exempt status

Plain-English summary

An organization operated an electronic-waste disposal facility. The IRS found that it had not demonstrated that it operated exclusively for charitable, educational, or another exempt purpose. It therefore revoked the organization's section 501(c)(3) status effective January 1 of the redacted year. Contributions ceased to be deductible from that date, and the organization was required to file Form 1120 for the affected year and later years.

Ruling snapshot

• Question: Did the electronic-waste disposal facility operate exclusively for a section 501(c)(3) exempt purpose?
• Outcome: revocation
• Key authorities: IRC §§ 170, 501(a), 501(c)(3), and 7428; Treas. Reg. § 1.501(c)(3)-1(d)

Full text (IRS public release)

DEPARTMENT OF THE TREASURY
Internal Revenue Service
TE/GE EO Examinations
1100 Commerce Street, MC 4920 DAL
Dallas, TX 75242

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

Date: NOV 30 2016
Release Number: 201716052
Release Date: 4/21/2017
UIL: 501.03-00                                      Person to Contact:

                                                    Identification Number:
                                                    Contact Telephone Number:
                                                    Refer Reply to:

                                                    EIN:

CERTIFIED MAIL – Return Receipt Requested

Dear                  :

This is a final revocation letter as to your exempt status under section 501(c)(3) of the
Internal Revenue Code. The Internal Revenue Service's recognition of your organization as
an organization described in section 501(c) (3) is hereby revoked effective January 1, 20XX.

We have made this determination for the following reasons:

You are operating an electronic waste disposal facility in             ,              . You have not
demonstrated that you are operated exclusively for charitable, educational, or other
exempt purposes within the meaning of I.R.C. section 501(c)(3). Organizations described
in I.R.C. section 501(c)(3) and exempt under section 501(a) must be organized and
operated exclusively for an exempt purpose. You have not established that you have
operated exclusively for an exempt purpose.

As such, you failed to meet the requirements of I.R.C. section 501(c)(3) and Treas. Reg.
section 1.501(c)(3)-1(d) in that you failed to establish that you were operated exclusively
for an exempt purpose.

Contributions to your organization are no longer deductible under section 170 of the
Internal Revenue Code, effective January 1, 20XX.

You are required to file Federal income tax returns on Form 1120. These returns should be
filed with the appropriate Service Center for the year ending December 31, 20xx, and for all
years thereafter.

Processing of income tax returns and assessment of any taxes due will not be delayed should
a petition for declaratory judgment be filed under section 7428 of the Internal Revenue
Code.

- 2 -

If you decide to contest this determination in court, you must initiate a suit for declaratory
judgment in the United States Tax Court, the United States Claim Court or the District
Court of the United States for the District of                     before the 91st day after the date this
determination was mailed to you. Contact the clerk of the appropriate court for the rules for
initiating suits for declaratory judgment.

You may also be eligible for help from the Taxpayer Advocate Service (TAS). TAS is an
independent organization within the IRS that can help protect your taxpayer rights. TAS can
offer you help if your tax problem is causing a hardship, or you've tried but haven't been
able to resolve your problem with the IRS. If you qualify for TAS assistance, which is always
free, TAS will do everything possible to help you. Visit www.taxpayeradvocate.irs.gov or call
1-877-777-4778.

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

                                                  Sincerely yours,



                                                  for Mary A. Epps
                                                  Acting Director, EO Examinations