Failure to provide records and state dissolution led to revocation

Plain-English summary

The IRS revoked a charity's section 501(c)(3) status after it failed to respond to repeated requests for books, financial records, board minutes, and information about its activities. Without those records, the organization did not establish that it operated exclusively for exempt purposes or that none of its earnings benefited private parties. State records also showed that the corporation had been dissolved, so it no longer existed as a legal entity capable of satisfying the organizational test. The audit report additionally cited state findings that the organization and related parties had engaged in unlawful conduct, although the identifying details were redacted. The final letter gave the organization 90 days to seek declaratory relief in one of the three federal courts authorized by section 7428.

Ruling snapshot

• Question: Did the organization continue to qualify under section 501(c)(3) after failing to provide audit records and being dissolved under state law?
• Outcome: Revocation
• Key authorities: IRC §§ 501(c)(3), 6001, 6033, and 7428; Treas. Reg. §§ 1.501(c)(3)-1, 1.6001-1, and 1.6033-2; Rev. Rul. 59-95

Full text (IRS public release)

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

Date:
04/04/2023

Taxpayer ID number (last 4 digits):

Form:

Tax periods ended:

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

Last day to file petition with United States
Tax Court:
07/03/2023

Release Number: 202339044
Release Date: 9/29/2023
UIL Code: 501.03-00

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 IRC Section 501(c)(3) and exempt under IRC Section 501(a) must be both organized and operated
exclusively for charitable, educational, or other exempt purposes within the meaning of IRC Section 501(c)(3).
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) and that no part of your net earnings inure 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, 6033(a)(1) and Rev. Rul. 59-95, 1959-1 C.B. 627. Further, you were
dissolved by the State of [redacted] for violations of the [redacted]
et seq., by procuring the organization through fraud; [redacted];
conducting its affairs in an
unlawful manner, demonstrating that you are not operated exclusively for exempt purposes.

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

Letter 6337 (Rev. 8-2022)
Catalog Number 74808E

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.

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).

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:

Internal Revenue Service
Taxpayer Advocate Office

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.

Letter 6337 (Rev. 8-2022)
Catalog Number 74808E

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.

Keep the original letter for your records.

Sincerely,

for
Lynn A. Brinkley
Director, Exempt Organizations Examinations

Enclosures:
Publication 1
Publication 594
Publication 892

Letter 6337 (Rev. 8-2022)
Catalog Number 74808E

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

CERTIFIED MAIL - Return Receipt Requested

Date:
November 14, 2022

Taxpayer ID number:

Form:

Tax periods ended:

Person to contact:
Name:
ID number:
Telephone:
Fax:
Address: Internal Revenue Service
Attn:

Manager’s contact information:
Name:
ID number:
Telephone:

Response due date:
December 14, 2022

Dear [redacted]:

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

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

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).

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

Sincerely,

for
Lynn A. Brinkley
Acting Director
Exempt Organizations Examinations

Enclosures:
Form 886-A and Attachments
Form 6018

2
Letter 3618 (Rev. 8-2019)
Catalog Number 34809F

Form 886-A
(May 2017)

Department of the Treasury — Internal Revenue Service
Explanations of Items

Schedule number
or exhibit

Name of taxpayer
Tax Identification Number (last 4 digits)
Year/Period ended

Issue:

Whether [redacted] (Taxpayer) continues to qualify for exemption
from Federal income tax under section 501(a) of the Internal Revenue Code (Code) as a charitable
organization described in Code section 501(c)(3).

Facts:

Taxpayer was incorporated in the State of [redacted] on [redacted], under the state’s
nonprofit corporation law. Taxpayer's organizing document, the Articles of Incorporation, was filed
by Taxpayer with the state and provides for the following corporate purpose:

“To provide food, clothing, transportation, housing, and financial assistance to individuals
and their families. From their [redacted] all the way to [redacted],
our mission is to improve the lives of those [redacted] by also providing emotional support
to the entire family. [redacted] is, and will always be, a charitable
organization.”

Article VII of Taxpayer’s Articles of Incorporation provides that the organization is organized
exclusively for charitable, religious, educational, and scientific purposes under section 501(c)(3) of
the Code, or corresponding section of any future federal tax code. Taxpayer's organizing
document provides for a dissolution clause intended to allow Taxpayer to satisfy the organizational
requirements for Federal exemption.

Taxpayer's Articles of Incorporation identifies the incorporator as [redacted] with a
residential or business address of [redacted]. [redacted]
is also appointed as the resident agent of the corporation. According to Article
IV, the street address of the registered office of the corporation (P.O. Boxes are not acceptable by
the state) is [redacted]. The initial
directors listed in Article VI of Taxpayer's organizing document are [redacted],
[redacted], and [redacted]. [redacted] has a mailing address in [redacted] while
[redacted] has a mailing address in [redacted]. A copy of Taxpayer's organizing document is
appended as Exhibit A.

The street address in [redacted] furnished by [redacted] as his residential or business
address corresponds to a [redacted] called [redacted] which offers mailbox services. See
Exhibit B. The website for [redacted] contains the following description of mailbox
services offered to its customers:

“We provide you with a unique street address box number where you can have all your
mail sent. When a new piece of mail arrives, our staff automatically scan the front of the
envelope. You can then manage your mail through an online control panel and can request
that we open and scan the contents, shred and recycle the item, or forward-ship it to your
home or business address.”

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

Form 886-A
(May 2017)

Department of the Treasury — Internal Revenue Service
Explanations of Items

Schedule number
or exhibit

Name of taxpayer
Tax Identification Number (last 4 digits)
Year/Period ended

In [redacted], Taxpayer filed Form [redacted],
[redacted], with the Internal Revenue
Service (IRS). [redacted] of the Form [redacted] requires [redacted] organizations to list the names,
titles and mailing addresses of all officers, directors, and trustees. The same [redacted] individuals
listed as the initial directors on Taxpayer’s organizing document are listed in [redacted] of the Form
[redacted]. [redacted] is listed as the Executive Director, [redacted] is listed as a Director
and [redacted] is listed as the Managing Director. Their addresses correspond to the ones
referenced on Taxpayer's organizing document. The Form [redacted] is signed by
[redacted] as the Executive Director according to the declaration on page 3.

The mailing address furnished for Taxpayer on its Form [redacted] is:

[redacted]

Taxpayer's address in [redacted] corresponds to a [redacted] which offers mailbox
services. According to information posted by [redacted] on the Internet, the [redacted] located at
[redacted] in [redacted], offers the following mailbox services:

• A real street address in lieu of a P.O. Box.

• Package and mail receipt notifications

• Mail holding and forwarding

• Call-in mail check

A copy of the pertinent website content posted by or on behalf of the [redacted] located in
[redacted] in [redacted] is appended as Exhibit C.

In its Form [redacted], Taxpayer attested that it is both organized and operated
exclusively for charitable purposes. Taxpayer did not furnish a copy of its Articles of Incorporation
since the organizing document is not required to be filed with the [redacted] Form
[redacted]. Based on the representations and attestations made by Taxpayer in its Form [redacted],
the IRS issued a favorable determination letter dated [redacted], granting Taxpayer recognition
of exemption under section 501(c)(3) of the Code effective [redacted]. Taxpayer was
classified as a public charity under sections 509(a)(1) and 170(b)(1)(A)(vi) of the Code based on its
attestation regarding public support in [redacted] of the Form [redacted].

IRS records show that Taxpayer filed Form [redacted], for the [redacted],
[redacted], and [redacted] calendar tax years. Taxpayer filed Form [redacted] in lieu of a Form [redacted] or Form
[redacted] return. The organization indicated on Form [redacted] that its gross receipts are normally $
[redacted] or less. The address reported by Taxpayer on its Forms [redacted] is the same address reported on
the Form [redacted] - [redacted].

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

Form 886-A
(May 2017)

Department of the Treasury — Internal Revenue Service
Explanations of Items

Schedule number
or exhibit

Name of taxpayer
Tax Identification Number (last 4 digits)
Year/Period ended

In [redacted], the Tax Exempt and Governmental Entities (TE/GE) division of the IRS
selected Taxpayer for examination of its books and records covering the [redacted] calendar year. The
notice of examination package, which is dated [redacted], consists of IRS letter #6031,
Form [redacted], Publication 1, Your Rights as a Taxpayer,
Notice 609, Privacy Act Notice, and Publication 3498-A, The Examination Process (Audits by Mail).
The notice of examination package was mailed to Taxpayer at the last known address on file for
the organization, which is as follows:

[redacted]

As noted on page [redacted] of the [redacted]-page [redacted] issued with the examination notice, the examination of
Taxpayer's books and records is intended to verify that the organization:

1. Operates in accordance with section 501(c)(3) of the Code

2. Is eligible to file Form 990-N based on gross receipts, and

3. Filed all required returns including information returns.

As part of standard audit procedures, the IRS examiner requested that Taxpayer furnish certain
records and information needed to determine whether the organization is operating in furtherance
of charitable and other exempt purposes described in section 501(c)(3) of the Code. [redacted] #
[redacted] issued to Taxpayer on [redacted], requests copies of the following records and
information covering the [redacted] calendar year under examination:

• Chart of accounts

• General ledger

• Adjusted trial balance

• Cash disbursements journal.

• Monthly bank statements for Taxpayer’s primary operating (checking) account together with
canceled checks or check images furnished by the bank.

• Monthly statements for all credit cards that may have been issued to Taxpayer.

• Minutes of meetings held by Taxpayer’s Board of Directors and committees of the Board.

• Internal policies and procedures regarding the handling and recording of cash donations.

• Lease agreements and other information relating to any office or other facility used by Taxpayer
to conduct activities.

• Contracts and other arrangements with individuals and/or organizations which solicit and raise
funds for Taxpayer including, but not limited to, professional fundraising organizations.

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

Form 886-A
(May 2017)

Department of the Treasury — Internal Revenue Service
Explanations of Items

Schedule number
or exhibit

Name of taxpayer
Tax Identification Number (last 4 digits)
Year/Period ended

• The organization’s website address, if any, and the identity of the party that hosts the website.
If no website is maintained, Taxpayer was requested to provide copies of records which
describe the activities conducted in [redacted]. In the absence of formal marketing and fundraising
materials, Taxpayer was asked to provide a statement describing the activities, services,
programs, and events conducted by the organization in [redacted].

• Information regarding the accounting software used by Taxpayer for preparation of its books
and records.

The response due date for [redacted] # [redacted] was [redacted]. Taxpayer did not respond to the [redacted] or
otherwise contact the IRS examiner or the group manager by the due date. In accordance with
established IRS procedures, a follow-up “Delinquency Notice” letter was issued to Taxpayer with a
copy of [redacted] # [redacted] on [redacted], with a response due date of [redacted]. The
delinquency notice states, in part, that if the organization does not fully respond to the IDR by the
response due date, the IRS will propose revocation of Taxpayer’s exempt status. The delinquency
notice was not returned by the post office as undeliverable.

Taxpayer did not respond to the delinquency notice or otherwise contact the IRS examiner.
Neither the IRS examiner nor the group manager subsequently received any of the requested
records and information from [redacted] or any other officer or director of Taxpayer.

There is no evidence that Taxpayer is an affiliate or chapter of any other exempt organization or
network of charities that operate within the United States. The [redacted] Form [redacted] filed by
Taxpayer references a website ([redacted]) in section E. The IRS examiner was
unable to find the website domain listed by Taxpayer on its [redacted] Form [redacted]. Taxpayer did not
identify a website on Form [redacted] filed for [redacted] and [redacted].

A search of the State of [redacted] corporate database, which provides information on the status
of entities incorporated under [redacted] state law, shows that Taxpayer’s [redacted] was formally dissolved as
a corporation effective [redacted]. A copy of the entity status search for
Taxpayer secured from the State of [redacted] online filing system is appended as Exhibit D. An
electronic copy of [redacted] dissolution of Taxpayer was also made available on the state’s
website and is appended as Exhibit E.

The [redacted] indicates that the [redacted] against Taxpayer, its officers [redacted],
[redacted], and [redacted], and [redacted] by the Attorney
General of the State of [redacted]. Following a [redacted], the [redacted] held that the Taxpayer and the
related [redacted] engaged in unlawful conduct in violation of the [redacted]
([redacted]), et seq., by procuring the organizations through fraud;
[redacted]; and
conducting its affairs in an unlawful manner. [redacted]. An order for [redacted]
was filed with the corporations’ division on [redacted].

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

Form 886-A
(May 2017)

Department of the Treasury — Internal Revenue Service
Explanations of Items

Schedule number
or exhibit

Name of taxpayer
Tax Identification Number (last 4 digits)
Year/Period ended

Applicable Law:

Section 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.

Section 1.501(c)(3)-1(a)(1) of the Treasury Regulations states that 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 - charitable, religious,
educational, scientific, literary, testing for public safety, or for the prevention of cruelty to children or
animals. If an organization fails to meet either the organizational test or the operational test, it is
not exempt.

Section 1.501(c)(3)-1(b)(1)(i) of the regulations provides that an organization is organized
exclusively for one or more exempt purposes only if its articles of organization (as defined in
subparagraph (2)) limit its purposes to one or more exempt purposes and do not expressly
empower it to engage, otherwise than as an insubstantial part of its activities, in activities which in
themselves are not in furtherance of one or more exempt purposes.

Section 1.501(c)(3)-1(b)(2) of the regulations provides that the term “articles of organization” or
"articles" includes the trust instrument, the corporate charter, the articles of association, or any
other written instrument by which an organization is created.

Section 1.501(c)((3)-1(c) of the regulations describes the operational test requirements for
501(c)(3) exemption. The operational test focuses on how the organization is actually operated,
regardless of whether it is properly organized for tax-exempt purposes.

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). An
organization will not be so regarded if more than an insubstantial part of its activities is not in
furtherance of an exempt purpose. This is referred to as the “primary activities” test.

Section 1.501(c)(3)-1(c)(2) of the regulations 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.

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

Section 6001 of the Code provides, in part, 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,

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

Form 886-A
(May 2017)

Department of the Treasury — Internal Revenue Service
Explanations of Items

Schedule number
or exhibit

Name of taxpayer
Tax Identification Number (last 4 digits)
Year/Period ended

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.

Section 1.6001-1(c) of the regulations provides that in addition to 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 regulations sections
1.6033-1 through 1.6033-3.

Section1.6001-1(e) of the regulations provides 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.

Section 6033 of the Code provides, in general, that every organization exempt under IRC 501(a)
shall file an annual return, stating specifically the items of gross income, receipts, and
disbursements, and such other information for the purpose of carrying out the Internal Revenue
laws as the Secretary may by forms of regulations prescribe, and shall 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.

Section 6033 of the Code provides an exception to the annual filing requirement in the case of an
organization described in section 501(c) (other than a private foundation or a supporting
organization described in section 509(a)(3)) the gross receipts of which in each taxable year are
normally not more than $50,000. See section 1.6033-2(g)(1)(iii) of the regulations.

Section 1.6033-2(g)(5) of the regulations provide that an organization that is not required to file an
annual return by virtue of the gross receipts exception must submit an annual electronic notice
notification as described in section 6033(i) of the Code.

Section 1.6033-2(i)(2) of the regulations provides that every organization which is exempt from tax,
whether or not it is required to file an annual information return, shall submit such additional
information as may be required by the Internal Revenue Service for the purpose of inquiring into its
exempt status and administering the provisions of subchapter F (section 501 and following),
chapter 1 of subtitle A of the Code and section 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

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

Form 886-A
(May 2017)

Department of the Treasury — Internal Revenue Service
Explanations of Items

Schedule number
or exhibit

Name of taxpayer
Tax Identification Number (last 4 digits)
Year/Period ended

with the provisions of section 6033 of the Code 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.

Organization's Position:

Taxpayer's position is unknown at this time.

Government’s Position:

Analysis

The facts indicate that Taxpayer received recognition of exemption under section 501(c)(3) of the
Code in [redacted] based on information presented in its Form [redacted]. Taxpayer
attested that it is both organized and operated exclusively for charitable purposes.

The TE/GE division of the IRS maintains an examination program for exempt organizations to
determine whether they are complying with statutory requirements regarding their tax-exempt
status, the proper filing of returns, and other tax reporting matters. Taxpayer filed Form [redacted],
[redacted], with the IRS for the [redacted] calendar year.

Operational Test Not Met

Taxpayer was selected for audit to ensure that the organization’s activities and operations align
with their approved exempt status and to verify that the filing of Form [redacted] was proper based on
the organization’s gross receipts.

Section 6001 of the Code and the regulations thereunder impose requirements on exempt
organizations to keep books and records to substantiate information required under section 6033
of the Code. Although Taxpayer filed [redacted] in lieu of a return, the organization is
nevertheless required to produce records and other information requested by the IRS to verify that
it operates in furtherance of its exempt purpose. See regulations section 1.6033-2(i)(2).

As part of standard audit procedures, the IRS examiner requested basic financial records including
books of account, minutes of Board meetings and records and information pertaining to Taxpayer’s
activities. Such records and information are needed to verify whether Taxpayer continues to be
operated exclusively for one or more of the exempt purposes specified in section 501(c)(3) of the
Code. Taxpayer failed to respond to repeated reasonable requests to allow the IRS to examine its
books and records including its receipts, disbursements, and other items required to be kept and
maintained pursuant to sections 6001 and 6033(a)(1) of the Code.

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

Form 886-A
(May 2017)

Department of the Treasury — Internal Revenue Service
Explanations of Items

Schedule number
or exhibit

Name of taxpayer
Tax Identification Number (last 4 digits)
Year/Period ended

Accordingly, Taxpayer has failed to meet the requirements of section 501(c)(3) of the Code and
sections 1.501(c)(3)-1(a) and 1.501(c)(3)-1(c) of the regulations, in that the organization has not
established that it is operated exclusively for exempt purposes and that no part of its net earnings
inures to the benefit of private shareholders or individuals. See also Rev. Rul. 59-95.

Taxpayer is No Longer a Legal Entity Under State Law

A basic premise of tax-exempt status under section 501(c)(3) of the Code is that it may apply only
to an organization that is organized pursuant to “articles of organization” within the meaning of
section 1.501(c)(3)-1(b)(2) of the regulations. Such articles of organization include a corporate
charter, articles of incorporation, or similarly named instrument in the case of a corporation. Public
records made available online by the State of [redacted] show that Taxpayer was dissolved as a
corporate entity pursuant [redacted] filed on [redacted]. See Exhibit E. Upon the
dissolution of Taxpayer by the State of [redacted], Taxpayer is no longer exempt by
operation of law since the organization is no longer a separate legal entity that can qualify for
exemption under section 501(c)(3). See section 1.501(c)(3)-1(b) of the regulations regarding the
organizational test requirements.

Conclusion:

For the reasons stated above, the IRS has determined that Taxpayer is no longer exempt from
Federal income tax under section 501(a) of the Code as an organization described in Code section
501(c)(3). The IRS is proposing to revoke Taxpayer's 501(c)(3) tax-exempt status effective
[redacted], the [redacted] calendar year under examination.

Please note that this Form 886-A, Explanation of Items, which is also known as the revenue agent
report (RAR), constitutes an integral part of the attached 30-day letter #3618. Please refer to the
attached letter #3618 for additional information including appeals rights and other options available
to the organization and, the instructions for how to respond.

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