IRS revokes an inactive charity's 501(c)(3) status

Plain-English summary

A charity had been recognized under section 501(c)(3) for a national movement,
fundraising to assist other charities, and related administrative and
promotional activities. During an IRS examination, its representative said the
organization had been inactive since 2019 and had not conducted exempt or
financial activities during the year under review. The organization also did
not provide all requested information about closed bank accounts, the absence
of financial activity, and cancellation of debt. The IRS concluded that the
organization no longer met the operational test because it was not carrying
out any section 501(c)(3) activities. It revoked the exemption effective on a
redacted date and directed the organization to file corporate income tax
returns for the redacted years identified in the report.

Ruling snapshot

• Question: Does an inactive organization continue to satisfy the operational requirements of section 501(c)(3)?
• Outcome: Revocation
• Key authorities: IRC §§ 501(a), 501(c)(3), 170, 503, and 7428; Treas. Reg. § 1.501(c)(3)-1(a)(1), (c)(1), and (d)(1); Rev. Rul. 58-617

Full text (IRS public release)

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

[redacted]

[redacted]

Date:
[redacted]

Taxpayer ID number (last 4 digits):
[redacted]

Form:
[redacted]

Tax periods ended:
[redacted]

Person to contact:
Name: [redacted]
ID number: [redacted]
Telephone: [redacted]
Fax: [redacted]

Release Number: 202630018
Release Date: 7/24/26
UIL Code: 501.03-00

Last day to file petition with United States
Tax Court:
[redacted]

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: Federal tax law
mandates that exempt organizations be organized and operated exclusively for purposes described in Internal
Revenue Code Section 501(c)(3). Our review shows that you have not conducted any activities associated with
your tax exempt purpose since 2019 and, as such, have failed to meet the operational requirements to continue
your tax-exempt status under IRC section 501(c)(3).

Organizations that are not exempt under IRC Section 501 generally are required to file federal income tax returns
and pay tax, where applicable. For further instructions, forms and information please visit IRS.gov.

What you must do if you disagree with this determination

If you want to contest our final determination, you have 90 days from the date this determination letter was
mailed to you to file a petition or complaint in one of the three federal courts listed below.

How to file your action for declaratory judgment

If you decide to contest this determination, you can file an action for declaratory judgment under the provisions
of Section 7428 of the Code in either:
• The United States Tax Court,
• The United States Court of Federal Claims, or
• The United States District Court for the District of Columbia

You must file a petition or complaint in one of these three courts within 90 days from the date we mailed this
determination letter to you. You can download a fillable petition or complaint form and get information about
filing at each respective court's website listed below or by contacting the Office of the Clerk of the Court at one
of the addresses below. Be sure to include a copy of this letter and any attachments and the applicable filing fee
with the petition or complaint.

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

You can eFile your completed U.S. Tax Court petition by following the instructions and user guides available
on the Tax Court website at ustaxcourt.gov/dawson.html. You will need to register for a DAWSON account to
do so. You may also file your petition at the address below:

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

The websites of the U.S. Court of Federal Claims and the U.S. District Court for the District of Columbia contain
instructions about how to file your completed complaint electronically. You may also file your complaint at one of
the addresses below:

US Court of Federal Claims
717 Madison Place, NW
Washington, DC 20439
uscfc.uscourts.gov

US District Court for the District of Columbia
333 Constitution Avenue, NW
Washington, DC 20001
dcd.uscourts.gov

Processing of income tax returns and assessments of any taxes due will not be delayed if you file a petition for
declaratory judgment under IRC Section 7428.

The IRS office whose phone number appears at the top of the notice can best address and access your tax
information and help get you answers. However, you may be eligible for free help from the Taxpayer Advocate
Service (TAS) if you can't resolve your tax problem with the IRS or if you believe an IRS procedure just isn't
working as it should. TAS is an independent organization within the IRS that helps taxpayers and protects
taxpayer rights. Visit TaxpayerAdvocate.IRS.gov/contact-us or call 877-777-4778 (TTY/TDD 800-829-4059)
to find the location and phone number of your local advocate. Learn more about TAS and your rights under the
Taxpayer Bill of Rights at TaxpayerAdvocate.IRS.gov. Do not send your Tax Court petition to TAS. Use the
Tax Court address provided earlier in the letter. Contacting TAS does not extend the time to file a petition.

Where you can find more information

Enclosed are Publication 1, Your Rights as a Taxpayer, and Publication 594, The IRS Collection Process, for
more comprehensive information.

Find tax forms or publications by visiting IRS.gov/forms or calling 800-TAX-FORM (800-829-3676). If you
have questions, you can call the person shown at the top of this letter.

If you prefer to write, use the address shown at the top of this letter. Include your telephone number, the best
time to call, and a copy of this letter.

You may fax your documents to the fax number shown above, using either a fax machine or online fax service.
Protect yourself when sending digital data by understanding the fax service's privacy and security policies.

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

Keep the original letter for your records.

Sincerely,

[redacted]

Lynn A. Brinkley
Director, Exempt Organizations Examinations

Enclosures:
Publication 1
Publication 594
Publication 892

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

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

[redacted]

[redacted]

Date:
[redacted]

Taxpayer ID number:
[redacted]

Form:
[redacted]

Tax periods ended:
[redacted]

Person to contact:
Name: [redacted]
ID number: [redacted]
Telephone: [redacted]
Fax: [redacted]

Manager's contact information:
Name: [redacted]
ID number: [redacted]
Telephone: [redacted]

Response due date:
[redacted]

CERTIFIED MAIL - Return Receipt Requested

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 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.

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

4. Request that we refer this matter for technical advice from the Office of Associate Chief Counsel
(Employee Benefits, Exempt Organizations, and Employment Taxes) if you feel the issue hasn't been
addressed in published precedent or has been treated inconsistently by the IRS. If you're considering
making such a request, contact the person shown at the top of this letter. A decision made in a technical
advice memorandum related to tax-exempt status is final if it is issued before an appeal is requested. You
will not be able to appeal to the IRS Appeals Office if you disagree with the technical advice
memorandum.

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,

Jason Brasch

Enclosures:
Form 886-A
Form 6018
Form 4621-A
Publication 1
Publication 892
Publication 3498

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

Department of the Treasury - Internal Revenue Service

Form 886-A
(May 2017)

Explanation of Items

Schedule number or exhibit

Name of taxpayer
[redacted]

Tax Identification Number
(last 4 digits)
[redacted]

Year/Period ended
[redacted]

ISSUE:

Whether [redacted] (“Taxpayer”) qualifies for tax-exemption as an organization described in
the Internal Revenue Code Section 501(c)(3).

FACTS:

Taxpayer was incorporated under the laws of the State of [redacted] as a non-profit corporation on
[redacted] and has a current status of “active”. Taxpayer was granted tax exempt status
under Internal Revenue Code Section 501(c)(3) on [redacted] as a publicly supported
organization under [redacted] and [redacted].

The planned activities consisted of a national [redacted] movement, fundraising
to assist other 501(c)(3) organizations, and administrative and promotional activities.

The Taxpayer has been filing the Form [redacted] from years [redacted].

On [redacted], the assigned agent made initial contact and sent Letter 6031 and IDR 1
requesting financial documentation for tax period [redacted] and a three-year average of gross receipts.
After [redacted] of no response, the assigned agent issued Letter 5077-B, TE/GE IDR Delinquency
Notice. On [redacted], the assigned agent issued Letter 5077-A, Pre-Summons Notice.
The assigned agent received IDR 1 response on [redacted], stating that there was no
activity conducted during the tax year [redacted].

On [redacted], the initial interview was conducted with [redacted] President
and [redacted] (“POA”), representing the Taxpayer. [redacted] stated that the organization has been
inactive since [redacted], and thus has not performed any activities associated with the exempt purpose
or conducted and financial activity during the year under examination.

IDR 2 was sent on [redacted], requesting proof of the closed bank accounts, verification of no
financial activity during the examination year, and clarification of the debt cancellation associated
with one of the organizations accounts amounting to [redacted]. The organization has yet to provide
the requested information.

LAW:

IRC 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

Catalog Number 20810W Page 1 of 3 www.irs.gov Form 886-A (Rev. 5-2017)

candidate for public office.

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.

Section 1.501(c)(3)-1(c)(1) of the Regulations provides that an organization 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). Reg.
1.501(c)(3)-1(d)(1) 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.

Revenue Ruling 58-617, 1958-2 CB 260, (Jan. 01, 1958), provides that rulings and
determinations letters granting exemption from federal income tax to an organization described
in IRC 501(a) of the Internal Revenue Code of 1954, to which contributions are deductible by
donors in computing their taxable income in the manner and to the extent provided by IRC 170,
are effective only so long as there are no material changes in the character of the organization,
the purposes for which it was organized, or its methods of operation. Failure to comply with this
requirement may result in serious consequences to the organization for the reason that the ruling
or determination letter holding the organization exempt may be revoked retroactively to the date of
the changes affecting its exempt status, depending upon the circumstances involved, and subject
to the limitations on retroactivity of revocation found in 503 of the Code.

TAXPAYER POSITION:

The Taxpayer's position is currently unknown.

GOVERNMENT POSITION:

The Taxpayers exempt purpose was to implement a national [redacted]
movement and fundraise with other 501(c)(3) organizations. The Taxpayer has not conducted any
charitable activities since [redacted].

Section 1.501(c)(3)-1(d)(1) of the Regulations provides 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.

In relation to Revenue Ruling 58-617, an organization's exempt status will remain in effect only so
long as there are no material changes in the character of the organization, the purposes for which

Catalog Number 20810W Page 2 of 3 www.irs.gov Form 886-A (Rev. 5-2017)

it was organized, or its method of operations. The Taxpayer did not conduct any exempt activities
outlaid in IRC Section 501(c)(3) from [redacted], which is a material change in the character
for which Taxpayer was organized.

As such, the organization fails to meet the operational requirements to continue its tax-exempt
status under IRC section 501(c)(3). Therefore, The Taxpayer's tax-exempt status should be
revoked with an effective revocation date of [redacted].

Conclusion:

The Taxpayer does not meet the operational requirements under 501(c)(3) of the Internal
Revenue Code, and the organization's tax-exempt status should be revoked as of [redacted].

Forms 1120, U.S. Corporation Income Tax Return should be filed for the calendar years
[redacted], should there be any corrected tax liability.

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