| Dear Applicant:
Based on information you supplied, and assuming your operations
will be as stated in your application for recognition of exemption,
we have determined you are exempt from federal income tax
under Section 501(a) of the Internal Revenue code as an organization
described in section 501(c)(3).
Because you are a newly created organization, we are not
now making a final determination of your foundation status
under section 509(a) of the Code. However, we have determined
that you can reasonably expect to be a publicly supported
organization described in Section 509 (a)(1) and 170(b)(1)(A)(vi).
Accordingly, during an advance ruling period you will be
treated as a publicly supported organization, and not as a
private foundation. This advance ruling period begins and
ends on the dates shown above.
Within 90 days after the end of your advance ruling period,
you must send us the information needed to determine whether
you have met the requirements of the applicable support test
during the advance ruling period. If you establish that you
have been a publicly supported organization, we will classify
you as a section 509(a)(1) or 509(a)(2) organization as long
as you continue to meet the requirements of the applicable
support test. If you do not meet the public support requirements
during the advance ruling period, we will classify you as
a private foundation for future periods. Also, if we classify
you as a private foundation, we will treat you as a private
foundation from your beginning date for purposes of section
507(d) and 4940.
Grantors and contributors may rely on our determination
that you are not a private foundation until 90 days after
the end of your advance ruling period. If you send us the
required information within the 90 days, grantors and contributors
may continue to rely on the advance determination until we
make a final determination of your foundation status.
If we publish a notice in the Interna1 Revenue Bulletin
stating that we will no longer treat you as a publicly supported
organization, grantors and contributors may not rely on this
determination after the date we publish the notice. In addition,
if you lose your status as a publicly supported organization,
and a grantor or contributor was responsible for, or was aware
of, the act or failure to act that resulted in your loss of
such status, that person may not rely on this determination
from the date of the act or failure to act. Also, if a grantor
or contributor learned that we had given notice that you would
be removed from classification as a publicly supported organization,
then that person may not rely on this determination as of
the date he or she acquired such knowledge.
If you change your sources of support, your purposes, character,
or method of operation, please let us know so we can consider
the effect of the change on your exempt status and foundation
status. If you amend your organizational documentation or
bylaws, please send us a copy of the amended document or bylaws.
Also, let us know all changes in your name or address.
As of January 1, 1984, you are liable for social security
taxes under the Federal Insurance Contributions Act on amounts
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).
Organizations that are not private foundations are not subject
to the private foundation excise taxes under Chapter 42 of
the Internal Revenue Code. However, you are not automatically
exempt from other federal excise taxes. If you have any questions
about excise, employment, or other federal taxes, please let
us know.
Donors may deduct contributions to you as provided in section
170 of the Internal Revenue 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 sections 2055, 2106, and 2522 of
the Code.
Donors may deduct contributions to you 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. Revenue Ruling
67-246, published in Cumu1ative Bu11etin 1967-2, on page 104,
gives guidelines regarding when taxpayers may deduct payments
for admission to, or other participation in, fundraising activities
for charity.
Contributions to you are deductible by donors beginning
February 2, 2001.
You are not required to file Form 990, Return of Organization
Exempt From Income Tax, if your gross receipts each year are
normally $25,000 or less. If you receive a Form 990 package
in the mail, 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. Because
you will he treated as a public charity for return fi1ing
purposes during your entire advance ruling period, you should
file Form 990 for each year in your advance ruling period
that you exceed the $25,000 filing threshold even if your
sources of support do not satisfy the public support test
specified in the heading of this letter.
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 1ate, 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, please be sure your return
is complete before you file it.
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 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 need an employer identification number even if you have
no employees. If an employer identification number was not
entered on your application, we will assign a number to you
and advise you of it. Please use that number on all returns
you file and in all correspondence with the Internal Revenue
Service.
This ruling is based on the understanding that the majority
of your Board of Directors will be non-salaried, and will
not be related to salaried personel or to parties providing
services. It is also based on the understanding that salaried
individuals cannot vote on their own compensation and that
compensation decisions will be made by the board.
If we said in the heading of this letter that an addendum
applies, the addendum enclosed is an integral part of this
letter.
Because this letter could help us resolve any questions about
your exempt status and foundation status, you should keep
it in your permanent records.
If you have any questions, please contact the person whose
name and telephone number are shown in the heading of this
letter.
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