Charity loses exemption after ignoring repeated examination requests

Plain-English summary

The IRS repeatedly asked a charity for financial and operational records needed to examine its continued qualification under section 501(c)(3). An initial letter was returned, but later requests were successfully delivered to multiple addresses associated with the organization and its officers. The organization did not respond or produce the requested records. Without those records, it could not establish that it operated exclusively for exempt purposes, avoided private inurement, or complied with the recordkeeping and reporting duties in sections 6001 and 6033. The IRS therefore revoked its exemption effective at the start of the examined tax year.

Ruling snapshot

• Question: Did the organization establish continued section 501(c)(3) qualification when it failed to respond to repeated requests for records?
• Outcome: revocation
• Key authorities: IRC §§ 501(c)(3), 6001, and 6033; Treas. Reg. §§ 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                                              June 9, 2022
Tax Exempt and Government Entities                                    Taxpayer ID number:

Number: 202248014                                                     Form:
Release Date: 12/2/2022
                                                                      Tax periods ended:

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

UIL: 501.03-00

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 failed to
produce documents to establish that you are operated exclusively for exempt purposes within the meaning of
IRC Section 501(c)(3), 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 IRC Sections 6001 and
6033(a)(1) 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 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        U.S. Court of Federal Claims       U.S. District Court for the District of Columbia
400 Second Street, NW          717 Madison Place, NW              333 Constitution Ave., N.W.
Washington, DC 20217           Washington, DC 20439               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,

Lynn A. Brinkley
Acting Director, Exempt Organizations Examinations

Enclosures:
Publication 1
Publication 594
Publication 892

Letter 6337 (12-2020)
Catalog Number 74808E

Department of the Treasury                                             Date:
Internal Revenue Service                                              09/3/2021
Tax Exempt and Government Entities                                    Taxpayer ID number:

                                                                      Form:

                                                                      Tax periods ended:

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

                                                                      Manager's contact information:
CERTIFIED MAIL – Return Receipt Requested                             Name:
                                                                      ID number:
                                                                      Telephone:
                                                                      Response due date:

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.

       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.

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

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.

Additional information
You can get any of the forms and publications mentioned in this letter by visiting our website at
www.irs.gov/forms-pubs or by calling 800-TAX-FORM (800-829-3676).

If you have questions, you can contact the person shown at the top of this letter.

Sincerely,

for Sean E. O'Reilly
Director, Exempt Organizations Examinations

Enclosures:
Form 886-A
Form 6018

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

Department of the Treasury – Internal Revenue Service                Schedule number
     Form 886-A                                                                                              or exhibit
      (May 2017)                             Explanations of Items
 Name of taxpayer                                                Tax Identification Number (last 4 digits)   Year/Period ended
 Open Hearts And Spiritual Mind Foundation                       5696                                        201912



Issue:

Whether Open Hearts And Spiritual Mind Foundation qualifies for exemption under Section
501(c)(3) of the Internal Revenue Code?

Facts:

The initial contact letter requesting documentation of various financial items and setting up an
interview with the organization was sent to the most current address listed to the Internal
Revenue Service on July 1, 2021. This was returned as undeliverable. This address was as
follows:

PO Box 5824
Hillside, NJ 07205

The initial contact letter was resent on July 8, 2021 to the addresses listed on Form 990 for tax
period ending December 31, 2019. One was for the organization and the other was for the
officer Rudolph k. Johnson. The letters were successfully delivered per UPS tracking numbers
1Z1483590197038792 and 1Z1483590199126808. The addresses were as follows:

80 Boyden Ave,
Maplewood, NJ 07040

156 Harper Ave
Irvington, NJ 07111

Due to no response, the initial contact letter was resent on July 28, 2021. Internal research
showed alternative addresses for the most current officers listed on Form 990 for tax period
ending December 31, 2020. There was no alternative address listed for the organization. The
letters were successfully delivered per UPS tracking numbers 1Z1483590198487582,
1Z1483590195951576, 1Z1483590198639597 and USPS tracking 70151520000353636403.
The addresses were as follows:

Open Hearts And Spiritual Mind Foundation Inc
c/o Rudolph K Johnson Jr
PO Box 5824
Hillside, NJ 07205


Open Hearts And Spiritual Mind Foundation Inc
c/o Rudolph K Johnson Jr
1028 Chancellor Ave Fl 2
Maplewood, NJ 07040


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

                                        Department of the Treasury – Internal Revenue Service                Schedule number
     Form 886-A                                                                                              or exhibit
      (May 2017)                             Explanations of Items
 Name of taxpayer                                                Tax Identification Number (last 4 digits)   Year/Period ended
 Open Hearts And Spiritual Mind Foundation                       5696                                        201912




Open Hearts And Spiritual Mind Foundation Inc
c/o Chrystala Lherrison
209 Hollywood Ave
Hillside, NJ 07205

Open Hearts And Spiritual Mind Foundation Inc
c/o Chrystala Lherrison
94 Elizabeth Ave
Newark, NJ 07108

The organization failed to respond to the initial contact letters sent for tax period ending
December 31, 2019.

Law:

IRC § 6001 provides that every person liable for any tax imposed by the IRC, or for the collection
thereof, shall keep adequate records as the Secretary of the Treasury or his delegate may from
time to time prescribe.

IRC § 6033(a)(1) provides, except as provided in IRC § 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.

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

Treas. Reg. § 1.6001-1(e) states that the books or records required by this section shall be kept at
all times available for inspection by authorized internal revenue officers or employees, and shall
be retained as long as the contents thereof may be material in the administration of any internal
revenue law.




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

                                        Department of the Treasury – Internal Revenue Service                Schedule number
     Form 886-A                                                                                              or exhibit
      (May 2017)                             Explanations of Items
 Name of taxpayer                                                Tax Identification Number (last 4 digits)   Year/Period ended
 Open Hearts And Spiritual Mind Foundation                       5696                                        201912



Treas. Reg § 1.6033-1(h)(2) provides that every organization which has established its right to
exemption from tax, whether or not it is required to file an annual return of information, shall
submit such additional information as may be required by the district director for the purpose of
enabling him to inquire further into its exempt status and to administer the provisions of
subchapter F (section 501 and the following), chapter 1 of the Code and IRC § 6033.

Rev. Rul. 59-95, 1959-1 C.B. 627, concerns an exempt organization that was requested to
produce a financial statement and statement of its operations for a certain year. However, its
records were so incomplete that the organization was unable to furnish such statements. The
Service held that the failure or inability to file the required information return or otherwise to
comply with the provisions of IRC § 6033 and the regulations which implement it, may result in the
termination of the exempt status of an organization previously held exempt, on the grounds that
the organization has not established that it is observing the conditions required for the continuation
of exempt status.

Government’s Position:

In accordance with the above cited provisions of the Code and regulations under IRC §§ 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.

The Organization has failed repeatedly to respond to the Service’s request for information in
contrast to section 1.6033-1(h)(2) of the regulations which require an organization to provide
such information as requested to allow the Service to make a determination of that
organization’s exempt status.

It is the Service's position that the organization failed to meet the reporting requirements under
IRC §§ 6001 and 6033 to be recognized as exempt from federal income tax under
IRC § 501(c)(3). Accordingly, it is proposed that the organization's exempt status be revoked
effective January 1, 2019.

Taxpayer’s Position:

Taxpayer’s position is unknown.

Conclusion:

It is the Services position that the Organization does not qualify for exemption from federal
income tax under IRC §501(c)(3). The proposed date of the revocation is January 1, 2019.



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