Exemption revoked when claimed foreign charity work could not be verified

View official IRS release (PDF)

Plain-English summary

The IRS revoked the Section 501(c)(3) status of an organization that claimed to build charitable and educational facilities in another country. Its returns did not describe those foreign activities, its balance sheets did not report assets matching the claimed facilities, and it provided no invoices, payroll forms, canceled checks, or other records substantiating the construction and related expenses. The IRS also calculated that the organization’s public-support fraction was below the level required for public-charity classification, with a large share of contributions coming from one source. Conducting charitable work abroad is permitted, but the organization still had to prove that it was actively carrying out exempt activities and using its resources for those purposes. Because it did not provide that proof or maintain adequate supporting records, the IRS revoked its exemption.

Ruling snapshot

• Question: Did the organization continue to qualify under Section 501(c)(3) when its claimed foreign charitable projects were not supported by its returns, balance sheets, or records?
• Outcome: Revocation
• Key authorities: IRC §§ 170(b)(1)(A), 501(c)(3), 507, 508, and 509; Treas. Reg. § 1.501(c)(3)-1; Rev. Rul. 71-460

Full text (IRS public release)

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

Date: July 30, 2021

Taxpayer ID number:

Number: 202242014

Release Date: 10/21/2022

Tax periods ended:

Form:

Person to contact:
Name:

ID number:
Telephone:

UIL: 501.03-00 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)(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
established that you are operated exclusively for an exempt purpose within the meaning of IRC Section 501(c)
(3). You have failed to keep and retain records to determine whether you have been operating in accordance to
the requirements for organizations exempt under IRC Section 501(c)(3), and to provide records to the Internal
Revenue Service upon reasonable requests as required by IRC Sections 6001 and 6033(a)(1).

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.

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 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 Determination on
Tax-Exempt Status. You may write to the courts at the following addresses:

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

U.S. Court of Federal Claims
717 Madison Place, NW
Washington, DC 20439

U.S. District Court for the District of Columbia
333 Constitution Ave., N.W.
Washington, DC 20001

Letter 6337 (12-2020)
Catalog Number 74808E

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).

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
Internal Revenue Service
Tax Exempt and Government Entities

Date:
June 8, 2020

Taxpayer ID number:

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)(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.

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.

Enclosures:
Form 886-A
Form 6018
Form 4621
Publication 1

Sincerely,

Sean E. O’Reilly
Director, Exempt Organizations
Examinations

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

Schedule number or exhibit

Form 886-A EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended

ISSUES:

Whether continues to qualify for exemption as an organization described in the
Internal Revenue Code (IRC) Section 501(c)(3) as a Public Charity?

FACTS:

Organizational History

The was Incorporated on in the State of
applied for tax-exempt status by filing Form - Application for Recognition of Exemption
Under Section 501(c)(3) of the Internal Revenue Code, on . The Internal Revenue
Service (IRS) determined on that the organization will be classified as exempt under
Section 501(c)(3) of the Internal Revenue Code effective as a Public charity
under IRC Section 170(b)(1)(A)(vi). The exemption allows donors to deduct contributions to the
organization under IRC Section 170.

Operation History

The original name of the organization was “ ”.

The organization was created by , the founder. started the first
, from his after the completion of degree and upon
returning from the . stated that converted personal home in
into a at the initial stage. As the organization activities increases and additional
funding were donated, expanded operations to opening and in
.

As the organization evolved, the was created from the “
”. The founder stated that was created to help
fund the donations for creating , and in further stated that the
“ ” built and so far in .

Related Entity

The is an extension of “ ”.

The operation and activities of the organization are all being conducted in . On the last form
filed by “ ”, their calendar year was
to . Their purpose was to remodel and build additions to existing
and and to improve infrastructure in .

Per Internal Revenue Service records, “ ” was
revoked for not filing tax returns for more than years.

Form 886-A (1-1994) Catalog Number 20810W Page 1 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended

During the interview, , founder of the , stated that the was
created from “ ” in order to handle the financial
activities of the organization. stated that both and
, are the same entity and that the activities of the
are currently been conducted in .
“ ” name, is no longer used and per IRS purposes, that organization has been revoked.

Board of Directors

The officers, directors and trustees on the board are:

Name Officers

President, Treasurer

Director

Director

Financial Report

Per Form for tax year , the reported the following financial information:

Revenue

Contributions, Gifts, Grants $

Investment Income

Total $

Expenses

Grants $

Total $

Total profit $

Form 886-A (1-1994) Catalog Number 20810W Page 2 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended

Per the Statement of Revenues & Functional Expenses, the had the following
Revenue:

Revenue Income

Contributions, Gifts, Grants $

Investment Income

Total $

Expenses

Grants $

Other Expenses

Total $

Total profit $

Per Form for tax year , the reported the following financial
information:

Revenue

Contributions, Gifts, Grants $

Investment Income

Total $

Expenses

Grants $

Total

Total profit $

Form 886-A (1-1994) Catalog Number 20810W Page 3 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended

Incomplete returns

The filed a Form - Short Form of Organization Exempt from Income
Tax return for tax year on . The Form was received by the Internal
Revenue Service on . On , the Internal Revenue Service sent
the a letter stating that they were returning the Form , Short Form of
Organization Exempt from Income Tax because the return filed was incomplete. The organization
failed to include all the required information. Also, the letter stated that the total assets or gross
receipts are greater than the amount applicable to Form .

stated that the was planning to prepare a revised Form for tax year
with the correct information and return a complete Form to the Internal Revenue
Service for processing.

On , the filed a Form return for the tax year with the
Internal Revenue Service. The Internal Revenue Service received the Form return on
. On , the Internal Revenue Service issued out a letter to the
stating that they can’t process Form because Schedule A was not prepared.

Current Operations

On the original Form , the organization stated that the would be organized
and operated exclusively to further the charitable and educational purposes of the organization.

In the original filed Form return, the organization described its mission as
“ ”.

In the amended return, the organization described its mission as “
”. In the original filed Form return, the organization described
the primary exempt purpose as “ ”.

During the initial interview, stated that the is still operating its exempt
purpose but activities are being conducted in provided the revenue agent with
pamphlets and booklets describing the building of and in and showing the
physical locations to visit. also stated that there were no activities in the and that
all activities were being conducted in .

There were no indications on the organization’s Form and Form tax
returns that the organization is actively engaged in building facilities in another country and
furthermore, no financial activities were listed on the return to verify exempt activity. The
organization did not provide supporting documentation for expenses incurred. The balance sheet
did not reflect any assets that matched the value of and as described by the
organization as their main exempt activities. The balance sheet reflects only a total of $ and

Form 886-A (1-1994) Catalog Number 20810W Page 4 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended

$ cash and savings balance respectively in and year end. No value was
reported for land, building, or equipment in both years.

During the interview with on regarding sources of income and
fundraising, stated that had received some donations, but could not remember how
much had contributed on own. Listed below are the names and amounts of the individuals
that donated to the :

Contributor Amount Date

$

Total Contribution Amount $

Listed below is the test, to meet public support test:

Contributions:

Substantial Contributor - $

Other Donors -

Total Contributions- $

X %=$

Substantial Contributor amount minus % limitation

($ -$ )=$

Contributions minus amounts over %

($ -$ )=$

Total for numerator- $

Total for Denominator-$

Public Support Fraction: $ or percent.

Donated building

had personal property that donated to the “ ” on but
did not take a deduction on personal return. From the internet, the property value at that time

Form 886-A (1-1994) Catalog Number 20810W Page 5 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended

was $ . stated that wanted to turn the property into a museum, and have
it marked as a historical site. Then on , the quit claim the personal
property donated by to the Trustee of because the county and
could not come to an agreement on the property lines delineation for real estate taxes on a
residential property versus exempt property. The value of the property at this time was
$ . The value of the property from the time it was donated to the versus being
quit claim to the Trustee of was $ . The property value had decreased.
The organization did not list any property owned or any gain or loss from property on the
tax return.

also stated that all exempt activities are conducted in and that the workers from
the were hired to help with the construction of facilities.

On , during an interview with POA , stated that
explained to that while was employed as a , would receive donations from
patients as was about to retire. then put those donations in a box that stored at
personal residence. later misplaced the box with money given from patients and
later found the box and deposited the money in the Foundation’s bank account.

LAW:

IRC section 170(b)(1)(A) In the case of an individual, the deduction provided in subsection (a)
shall be limited as provided in the succeeding subparagraphs.

Any charitable contribution to—

(i) a church or a convention or association of churches,

(ii) an educational organization which normally maintains a regular faculty and
curriculum and normally has a regularly enrolled body of pupils or students in attendance at the
place where its educational activities are regularly carried on,

(iii) an organization the principal purpose or functions of which are the providing of
medical or hospital care or medical education or medical research, if the organization is a hospital,
or if the organization is a medical research organization directly engaged in the continuous active
conduct of medical research in conjunction with a hospital, and during the calendar year in which
the contribution is made such organization is committed to spend such contributions for such
research before January 1 of the fifth calendar year which begins after the date such contribution
is made,

(iv) an organization which normally receives a substantial part of its support (exclusive
of income received in the exercise or performance by such organization of its charitable,
educational, or other purpose or function constituting the basis for its exemption under section
501(a)) from the United States or any State or political subdivision thereof or from direct or indirect
contributions from the general public, and which is organized and operated exclusively to receive,
hold, invest, and administer property and to make expenditures to or for the benefit of a college or

Form 886-A (1-1994) Catalog Number 20810W Page 6 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended

university which is an organization referred to in clause (ii) of this subparagraph and which is an
agency or instrumentality of a State or political subdivision thereof, or which is owned or operated
by a State or political subdivision thereof or by an agency or instrumentality of one or more States
or political subdivisions,

(v) a governmental unit referred to in subsection (c)(1)

(vi) charities that normally receive a substantial part of their support from
governmental units and/or from direct or indirect contributions from the general public.

Internal Revenue Service section 501(c)(3) exempts from federal income tax organizations
which are 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.

Internal Revenue Service section 507(d)(2)(A) For purposes of paragraph (1), the term
“substantial contributor” means any person who contributed or bequeathed an aggregate amount
of more than $5,000 to the private foundation, if such amount is more than 2 percent of the total
contributions and bequests received by the foundation before the close of the taxable year of the
foundation in which the contribution or request is received by the foundation from such person.

Internal Revenue Service section 508(b) Except as provided in subsection (c), any organization
(including an organization in existence on October 9, 1969) which is described in section 501(c)(3)
and which does not notify the Secretary, at such time and in such manner as the Secretary may
by regulations prescribe, that it is not a private foundation shall be presumed to be a private
foundation.

Internal Revenue Service section 509(a) For purposes of this title, the term “private foundation”
means a domestic or foreign organization described in section 501(c)(3) other than—

(1) an organization described in section 170(b)(1)(A) (other than in clauses (vii) and (viii);

(2) an organization which— normally receives more than one-third of its support in each
taxable year from any combination of—

(i) gifts, grants, contributions, or membership fees, and

(ii) gross receipts from admissions, sales of merchandise, performance of services, or
furnishing of facilities, in an activity which is not an unrelated trade or business (within the
meaning of section 513), not including such receipts from any person, or from any bureau or
similar agency of a governmental unit (as described in section 170(c)(1)), in any taxable year to

Form 886-A (1-1994) Catalog Number 20810W Page 7 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended

the extent such receipts exceed the greater of $5,000 or 1 percent of the organization’s support in
such taxable year,

from persons other than disqualified persons (as defined in section 4946) with respect to the
organization, from governmental units described in section 170(c)(1), or from organizations
described in section 170(b)(1)(A) (other than in clauses (vii) and (viii))

Income Tax Regulations (“Treas. Reg.”)

Treas. Reg. Section 1.501(c)(3)-1(d)(i) states that an organization may be exempt as an
organization described in 501(c)(3) if it is organized and operated exclusively for one or more of
the following purposes: religious, charitable, scientific, testing for public safety, literary,
educational, or prevention of cruelty to children or animals.

Treas. Reg. Section 1.501(c)(3)-1(a)(1) of the regulations 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.

Treas. Reg. Section 1.501(c)(3)-1(c)(1) of the regulations provides that an organization will be
regarded as “operated exclusively” for one or more exempt purposes only if it engages primarily in
activities which accomplish one or more of such exempt purposes specified in section 501(c)(3)

Treas. Reg. Section 1.501(c)(3)-1(d)(1)(ii) is an organization is not organized or operated
exclusively for one or more of the purposes specified in subdivision (i) of this subparagraph unless
it serves a public rather than a private interest. Thus, to meet the requirement of this subdivision,
it is necessary for an organization to establish that it is not organized or operated for the benefit of
private interests such as designated individuals, the creator or his family, shareholders of the
organization, or persons controlled, directly or indirectly, by such private interests.

Revenue Ruling 63-252, 1963-2 C.B. 101 Deductibility of contributions by individuals to a charity
organized in the United States which thereafter transmits some or all of its funds to a foreign
charitable organization.

Revenue Ruling 68-165, 1968-1 C.B. 253 A domestic nonprofit corporation (composed of
educational, civic, business, and other groups) that joins with a counterpart group in a country in
Latin America to promote student and cultural exchanges and to provide technical and material
assistance for self-help projects designed to improve the living conditions of underprivileged
people in Latin America may be exempt from Federal income tax under section 501(c)(3)

Revenue Ruling 71-460, 1971-2 C.B. 231 A domestic corporation that conducts a part or all of its
charitable activities in a foreign country is not precluded from exemption under section 501(c)(3)
of the Code.

Form 886-A (1-1994) Catalog Number 20810W Page 8 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended

Revenue Ruling 72-369 states, in part, that in order for an organization to pass the operational
test, the organization's resources must be devoted to purposes that qualify as exclusively
charitable.

Revenue Ruling 80-286 An otherwise qualifying organization that was formed to foster the
cultural and educational development of children by arranging for and participating in the
temporary exchange of children between families of a foreign country and the U.S. qualifies for
exemption under section 501(c)(3) of the Code

Christian Manner International Inc. V. Commissioner, 71. T.C. 661, exemption denied because
principle activity not verified as in furtherance of exempt purpose. Principle activity not an
education purpose activity.

Mysteryboy Inc. v. Comm'r, 2010 Tax Ct., exemption was denied because the corporation was
not exempt from tax under section 501(a) because it was not an organization described in section
501(c)(3).

TAXPAYER’S POSITION:

position has not been provided.

GOVERNMENT’S POSITION:

An organization exempt from federal income taxes as described in IRC section 501(c)(3) must
be organized exclusively for one or more of the following classifications:

Religious

Charitable

Scientific

Testing for Public Safety

Literary

Educational

Fostering of national or international amateur
Sports, and

Prevention of cruelty to animals and children

In order to meet the operational test, an organization must show that they engaged primarily in
activities which accomplish one or more of such exempt purposes specified in section 501(c)(3)
of the Internal Revenue Code. received exemption to be organized and
operated exclusively to further their charitable and educational purposes. has not been
conducting any exempt activities as requested in the exempt application during the and
tax years. has not provided any evidence that the organization has conducted any
other activities that would be exempt under IRC Section 501(c)(3).

Form 886-A (1-1994) Catalog Number 20810W Page 9 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended

In order to remain a public charity (and not a private foundation), a Section 501(c)(3)
organization must obtain at least 1/3 of its donated revenue from a fairly broad base of public
support. The public support can be from individuals, companies and/or other public charities.
The public support fraction for the shows $ or % for . This is
well below the 1/3 required for the organization to qualify as a publicly supported organization
under IRC Sections 509(a)(1) and Section 170(b)(1)(A)(vi). Similarly, a larger percentage of the
donations came from in .

After reviewing and comparing the Foundation’s books and records with the returns filed for the
periods ending and ; the organization did not provide
any convincing evidence that confirmed the organization engaged in any exempt activities such
as building of and , as claimed. There was no documentation to show the
construction of facilities that was under construction or already built; the cost of materials used
to build the facilities and cost for individuals hired to build the facilities. The organization did not
provide supporting documentation to prove that the expenses incurred were in fact for
legitimate exempt activities. As noted, the balance sheet did not reflect any assets that matched
the value of and as described by the organization that they engaged in
building and facilities. The balance sheet reflects only a total of $ and
$ cash and savings balance respectively in and year end. As such, the
did not provide any record to support the fact that they are engaged in any
significant exempt charitable activities.

stated that individuals in were hired to build facilities. There were no cancelled
checks provided, no W2 or Form filed with the IRS that would have suggested that the
paid for services rendered or that those payments actually occurred here in United
States or .

The booklet and pamphlets provided with the name on the front, reflected the
value of the and in . However, the value of those facilities was not listed
on the Foundation’s books and records and on returns filed for tax years and
.

stated that all the activities of the were being performed in but there
was no evidence on the books and records that such exempt activities were being conducted.

The review of returns for periods ending in and
along with the review of previous returns filed by
disclosed the organizations did not engage exclusively for charitable
exempt purpose.

The and returns did not reflect any evidence that the organization is conducting
exempt activities nor that the building or facilities in are being used for education purposes or
caring for sick and elderly.

Form 886-A (1-1994) Catalog Number 20810W Page 10 publish.no.irs.gov Department of the Treasury-Internal Revenue Service

Schedule number or exhibit

Form 886-A EXPLANATIONS OF ITEMS

Name of taxpayer Tax Identification Number Year/Period ended

Based on Christian Manner International Inc. V. Commissioner, 71. T.C. 661, The
doesn’t meet the requirements of a 501(c)(3) because the organization does not
have an exempt purpose and did not engage in any exempt activities during the years
examined.

Although conducting a part or all of an organization’s charitable activities in a foreign country
does not preclude exemption under IRC Section 501(c)(3) per Revenue Ruling 71-460, 1971-2
C.B. 231. However, the organization must have an exempt purpose and must be actively
involved in the conduct of the exempt activities for which it received an exempt status either in
United States or in a foreign country. There must be adequate records to support the activities
conducted either in United States or in a foreign country. In this case, the supporting records
were not provided by .

In order for an organization to pass the operational test, the organization's resources must be
devoted to purposes that qualify as exclusively charitable as discussed in Revenue Ruling 72-
369 whereas operation failed the operational test because the organization is not
engaged primarily in the conduct of exempt activities.

Therefore, the organization is not furthering any exempt purpose under IRC Section 501(c)(3).

CONCLUSION:

Accordingly, exempt status as an organization described under IRC
Section 501(c)(3) should be revoked, effective because the could
not demonstrate that it operated for an exempt purpose. The has not
established that it is observing the conditions required for the continuation of exempt status
under IRC Section 501(c)(3).

Form U.S. Corporate Income Tax Return should be filed for the periods ending on
and .

Form 886-A (1-1994) Catalog Number 20810W Page 11 publish.no.irs.gov Department of the Treasury-Internal Revenue Service