|
Dear Applicant:
Based on information
supplied, and assuming your operations will be as stated in
your application for recognition of exemption, we have determined
you are exempt from federal tax under section 501 (a) of the
Internal Revenue Code as an organization described in section
501 (c) (3).
We have further determined
that you are not a private foundation within the meaning of
section 509 (a) of the Code, because you are an organization
described in section 509 (a) (3).
If your sources of
support, or your purposes, character, or method of operation
change, please let us know so we can consider the effect of
the change on you exempt status and foundation status. In
the case of an amendment to your organizational document or
bylaws, please send us a copy of the amended document or bylaws.
Also you should inform us of all changes in your name or address.
As of January 1,
1984, you are liable for taxes under the Federal Insurance
Contributions Act (social security taxes) on remuneration
of $100 or more you pay to each of your employees during a
calendar year. You are not liable for the tax imposed under
the Federal Unemployment Tax Act (FUTA).
Since you are not
a private foundation, you are not subject to the excise taxes
under Chapter 42 of the Code. However, if you are involved
in an excess benefit transaction, that transaction might be
subject to the excise taxes of section 4958. Additionally,
you are not automatically exempt from other federal excise
taxes. If you have any questions about excise, employment,
or other federal taxes, please contact your key district office.
Grantors and contributors may rely on this determination
unless that Internal Revenue Service publishes notice to the
contrary. However, if you lose your section 509 (a) (3) status,
a grantor or contributor may not rely on this determination
if he or she was in part responsible for, or was aware of,
the act or failure to act, or the substantial or material
change on the part of the organization that resulted in your
loss of such status, or if he or she acquired knowledge that
the Internal Revenue Service had given notice that you would
no longer be classified as a section 509 (a) (3) organization.
Donors may deduct
contributions to you as provided in section 170 of the Code.
Bequests, legacies, devises, transfers, or gifts to you or
for your use are deductible for federal estate and gift tax
purposes if they meet the applicable provisions of Code sections
2055, 2106, and 2522.
Contribution deductions
are allowable to donors only to the extent that their contributions
are gifts, with no consideration received. Ticket purchases
and similar payments in conjunction with fundraising events
may not necessarily qualify as deductible contributions, depending
on the circumstances. See Revenue Ruling 67-246, published
in Cumulative Bulletin 1967-2, on page 104, which sets forth
guidelines regarding the deductibility, as charitable contributions,
of payments made by taxpayers for admission to or other participation
in fundraising activities for charity.
In the heading of
this letter we have indicated whether you must file Form 990,
Return of Organization Exempt From Income Tax. If Yes is indicated,
you are required to file form 990 only if your gross receipts
each year are normally more than $25,000. However, if you
receive a Form 990 package in the mail, please file the return
even if you do not exceed the gross receipts test. If you
are not required to file, simply attach the label provided,
check the box in the heading to indicate that your annual
gross receipts are normally $25,000 or less, and sign the
return.
If a return is required,
it must be filed by the 15th day of the fifth month after
the end of your annual accounting period. A penalty of $20
a day is charged when a return is filed late, unless there
is reasonable cause for the delay. However, the maximum penalty
charged cannot exceed $10,000 or 5 percent of your gross receipts
for the year, whichever is less. For organizations with gross
receipts exceeding $1,000,000 in any year, the penalty is
$100 per day per return, unless there is reasonable cause
for the delay. The maximum penalty for an organization with
gross receipts exceeding $1,000,000 shall not exceed $50,000.
This penalty may also be charged if a return is not complete,
so be sure your return is complete before you file it.
You are required
to make your annual information return, Form 990 or Form 990-EZ,
available for public inspection for three years after the
later of the due date of the return or the date the return
is filed. You are also required to make available for public
inspection your exemption application, any supporting documents,
and your exemption letter. Copies of these documents are also
required to be provided to any individual upon written or
in person request without charge other than reasonable fees
for copying and postage. You may fulfill this requirement
by placing these documents on the Internet. Penalties may
be imposed for failure to comply with these requirements.
Additional information is available in Publication 557, Tax-Exempt
Status for Your Organization, or you may call our toll free
number shown above.
You are not required
to file federal income tax returns unless you are subject
to the tax on unrelated business income under section 511
of the Code. If you are subject to this tax, you must file
an income tax return on Form 990-T, Exempt Organization Business
Income Tax Return. In this letter we are not determining whether
any of your present or proposed activities are unrelated trade
or business as defined in section 513 of the Code.
You need an employer
identification number even if you have no employees. If an
employer identification number was not entered on your application,
a number will be assigned to you and you will be advised of
it. Please use that number on all returns you file and in
all correspondence with the Internal Revenue Service.
This determination
is based on evidence that your funds are dedicated to the
purposes listed in section 501 (c) (3) of the Code. To assure
your continued exemption, you should keep records to show
that funds are expended only for those purposes. If you distribute
funds to other organizations, your records should show whether
they are exempt under section 501 (c) (3). In cases where
the recipient organization is not exempt under section 501
(c) (3), there should be evidence that the funds will remain
dedicated to the required purposes and that they will be used
for those purposes by the recipient.
If distributions
are made to individuals, case histories regarding the recipients
should be kept showing names, addresses, purposes of awards,
manner of selection, relationship (if any) to members, officers,
trustees or donors of funds to you, so that any and all distributions
made to individuals can be substantiated upon request by the
Internal Revenue Service. (Revenue Ruling 56-304, C.B. 1956-2,
page 306.)
If we have indicated
in the heading of this letter that an addendum applies, the
enclosed addendum is an integral part of this letter.
Because this letter
could help resolve any questions about your exempt status
and foundation status, you should keep it in your permanent
records.
We have sent a copy
of this letter to your representative as indicated in your
power of attorney.
If you have any questions,
please contact the person whose name and telephone number
are shown in the heading of this letter.
| |
Sincerely yours,
|
| |
 |
| |
Steven T. Miller
Director, Exempt Organizations |
|
