4.75.24  Organizations Covered by a Group Ruling

Manual Transmittal

February 12, 2013

Purpose

(1) This transmits the revised IRM 4.75.24, Exempt Organizations Examination Procedures, Organizations Covered by a Group Ruling.

Background

IRM 4.75.24 contains guidance for examining central, intermediate, and subordinate organizations covered under a group return.

Material Changes

(1) The manual has been rewritten in its entirety. This manual includes some technical information found in IRM 7.20.4.4 and IRM 25.7.3 in order to explain the procedures in this manual.

(2) This manual provides instructions for dealing with group returns, determining the statute of limitations, obtaining consents to extend the statute, and requirements to notify the parent of changes to a subordinate's exempt status.

(3) This manual discusses what happens when a central organization's exemption is revoked or terminated.

(4) This manual provides sample letters for issuance to both subordinate and central organizations.

(5) This manual contains Manager, EPR, sample e-mails for when a central organization's exemption is terminated or revoked. The purpose of the e-mail is to instruct the Area Managers as to actions to take on subordinates currently on AIMS, as the parent's termination/revocation dissolves the group ruling, thus stripping the subordinate entity of its tax exempt status.

Effect on Other Documents

This manual supersedes IRM 4.75.24 (8/1/2003)

Audience

The Tax Exempt and Government Entities Operating Division and primarily Exempt Organization examiners use this IRM.

Effective Date

(02-12-2013)

Lois Lerner
Director of Exempt Organizations
Tax Exempt and Government Entities

4.75.24.1  (02-12-2013)
Overview

  1. The information in this manual supplements the technical material of IRM 7.20.4.4 and IRM 25.7.3. Refer also to IRM 4.5.3.18 regarding AIMS establishments.

  2. This manual provides additional procedures for audits of organizations under a group ruling. These procedures modify regular audit procedures found elsewhere in IRM 4.75.

  3. The issuance of group exemption letters is an administrative procedure which has been in existence for half a century. The procedures were instituted to relieve the Service from the burden of individually processing a large number of applications involving the exempt status of organizations that are affiliated with each other, organized and operated for the same purposes.

  4. Terms such as examiner, examination, and examine were changed to agent, audit, and audit, in connection with the Plain Writing Act.

4.75.24.2  (02-12-2013)
Organizational Structures

  1. A "central" or "parent" organization is an organization recognized as exempt that requests exemption under the Internal Revenue Code for a group of subordinate organizations. The central organization that holds a group exemption (rather than the IRS) determines which organizations are included as subordinates under its group exemption ruling.

  2. An "intermediate" organization is a central organization of a group exemption that is also a subordinate of another central organization; for example, a state or regional organization that is a central organization with subordinate units under its group exemption, and is itself a subordinate of a national organization under that organization’s group exemption (Rev. Proc. 80-27, section 3.03).

  3. A "subordinate" is a chapter, local post, or unit of a central organization. A subordinate may or may not be incorporated, but it must have an organizing document.

  4. Central organizations must establish that each of the subordinates included in the group exemption letter meet all these criteria:

    1. Affiliated with the parent at the close of its annual accounting period.

    2. Subjected to the parent's general supervision or control.

    3. Exempted under the same paragraph of IRC 501(c) as the other subordinates.

    4. Not organized or operated as a private foundation.

    5. Not organized and operated in a foreign country.

    Note:

    The central organization does not have to be exempt under the same paragraph of IRC 501(c) as its subordinates. The subordinates must be exempt under the same paragraph of IRC 501(c).

  5. See IRM 25.7.3.1.1 for a discussion of other requirements for exemption of the subordinates.

4.75.24.3  (02-12-2013)
Audit Considerations

  1. Group rulings present unique situations. Central organizations have the power to grant and take away exemption for their subordinates, simply by updating their annual list of subordinates. The IRS can also take away the exemption for any specific subordinate, intermediate organization, central organization, or entire group entity.

  2. You cannot modify the exempt status of a subordinate organization without modifying the group ruling itself. To take away the exemption of a specific subordinate is to remove it from coverage under the group ruling. If a subordinate fails to qualify for tax-exempt status under the same paragraph of IRC 501(c) as the other subordinates in the group, you must remove it from the group ruling, even if it qualifies for another paragraph in IRC 501(c). Thus, such an organization cannot be modified.

    Example:

    ABC, a veterans’ organization, is a subordinate organization covered by a group exemption ruling held by its parent organization. All subordinates in the group are exempt under IRC 501(c)(19) of the Internal Revenue Code. ABC's Form 990 for 201012 is under examination. The examiner determines that ABC does not meet the requirements of IRC 501(c)(19) because it fails to meet the membership tests. ABC does however qualify for tax-exemption under IRC 501(c)(4). Because ABC cannot be modified, you must propose removal from group ruling, and encourage it to apply for tax-exempt status in order to acquire its own independent exemption.

  3. If considering modifying an entire group ruling or the central organization's status, see IRM 4.75.13 concerning the effective date of modification.

    Reminder:

    An organization recognized as exempt by the IRS under IRC 501(c)(3) cannot be modified to another section of the code. If the organization does not meet the requirements of IRC 501(c)(3), its exempt status must be revoked.

  4. Subordinates who obtain a separate determination of tax-exemption letter no longer need to be included under the group ruling, and will lose their individual exemption determination if they go back to join a group ruling. See IRM 7.20.4.4(5).

  5. Administratively, group rulings result in fewer applications for exemption. Subordinates of a group ruling can also opt to reduce the number of information returns by filing a group return. See IRM 4.75.24.3.1.

  6. Group rulings also complicate the issue of the statute of limitations. Which return(s) start the running of the statute of limitations? Who is authorized to sign an extension? Who signs when the organization under audit filed via a group return? See IRM 4.75.24.3.2.

  7. Group rulings also modify the notification procedures. There are situations that require the IRS to contact the parent entity. There are also times when it is okay to contact the parent entity for assistance in an audit. See IRM 4.75.24.3.3.

4.75.24.3.1  (02-12-2013)
Group Returns

  1. Per Treasury Regulation 1.6033-2(d), a central organization may file, in addition to its own annual information return, a group return on behalf of two or more of its subordinate organizations covered by a group exemption letter which are:

    1. Affiliated with the central organization at the close of its annual accounting period.

    2. Subjected to the general supervision or control of the central organization.

    3. Exempted under the same paragraph of IRC 501(c) as the other subordinate(s).

    4. Filed on the basis of the established annual accounting period of the central organization.

  2. The group return may include only those exempt subordinates that have authorized the central organization in writing to include them in the return. The subordinates have to submit to the central organization statements specifying their gross income, receipts and disbursements, as well as such related information as is required to be stated in the group return.

  3. A central organization that files a group return must attach to the return a list of the names, addresses, and employer identification numbers of the subordinates included in the group return.

  4. Any subordinates not included in a group return are subject to the standard Form 990, 990-EZ, and 990-N filing requirements.

  5. The central organization may not include itself on the group return. The central organization must file its own separate return. See Treas. Reg. 1-6033-2(d).

  6. If the central, intermediate, and/or subordinate organizations are subject to unrelated business income tax or other taxes, they must file their own Forms 990-T or other tax returns. The group return may reflect a consolidated amount of unrelated business income in the Form 990 Statement of Revenue.

4.75.24.3.2  (02-12-2013)
Statute of Limitations

  1. The general rules for the statute of limitations are:

    IRC 7502. Timely Mailing Treated as Timely Filing and Paying
    If the return is postmarked: And the return is received: The statute date is based on:
    On or before the normal due date Before, on or after the normal due date Normal due date
    After the normal due date
    (No extension)
    After the normal due date Service Center received date
    On or before the extension date
    (After the normal statute date)
    On or before the extension due date Service Center received date
    On or before the extension date
    (After the normal statute date)
    After the extension due date Postmark date
    After the extension date After the extension due date Service Center received date

  2. The central organization is subject to the standard filing requirements:

    2010 Tax Year and later
    (Filed in 2011 and later)
    Form to file
    Gross receipts normally ≤ $50,000 990-N
    Gross receipts < $200,000, and
    Total assets < $500,000
    990-EZ or
    990
    Gross receipts ≥ $200,000, or
    Total assets ≥ $500,000
    990

    Note:

    Organizations eligible to submit the e-Postcard or file Form 990-EZ may choose to file a full return.

  3. A group return is always filed on a Form 990.

  4. A central organization filing a group return on behalf of two or more affiliates uses a special EIN to file the group return. This EIN is provided with the group ruling letter. To research the EIN, use command code EOGENS using the Group Exemption Number to find the EIN of the group return. Consult FAST if unable to find the EIN through regular IDRS research.

  5. A subordinate organization may or may not be included on a group return. Review BMFOLT on IDRS for the subordinate's EIN for the year in question. If a subordinate has been included on the group return, BMFOLT reflects a transaction code (TC) 590 and closing code (CC) 14. The transaction will also reflect a "PAR EIN XX-XXXXXXX" .

  6. If a subordinate claims to have been included on a group return, but IDRS does not reflect a TC 590 CC 14, secure a copy of the group return via Online SEIN. Review the return to see whether the subordinate is listed as included on the group return. Contact the FAST unit to request the input of the TC 590 CC 14.

    Note:

    If a parent organization fails to include the subordinate on the list of subordinates provided to the IRS annually, the subordinate will not be recognized as part of the group exemption. In such situations, the subordinate's status on BMFOLO/INOLES is 28, and will be subject to a Form 1120 filing requirement.

  7. If included on a group return, the subordinate's statute of limitations is based on the group return. See IRM 4.75.24.3.2 (1) to determine the statute of limitations. If not included on the group return, the subordinate is subject to normal filing requirements. See IRM 4.75.24.3.2 (2) for the filing requirements. If no return is filed, secure a delinquent return. See IRM 4.75.22.

    Note:

    If the subordinate is neither included on a group return nor files its own return for three consecutive years, the organization is subject to auto revocation. If auto revoked, the subordinate must apply for its own exemption. Do not secure a delinquent return in these situations. If the parent organization fails to file its own return for three consecutive years, the parent organization is automatically revoked and the entire group ruling is terminated.

4.75.24.3.2.1  (02-12-2013)
Extending the Statute of Limitations

  1. Request a statute extension if the case will be subject to Mandatory Review and there are less than 270 days remaining on the current statute of limitations. If not subject to Mandatory Review, ensure that the case is closed to ESS with 180 days remaining on the statute.

  2. If examining a subordinate organization's own Form 990 series return, officers of the subordinate may sign the consent. If authorized, officers of the central (or intermediate) organization may sign on behalf of the subordinate.

  3. If examining a central organization, only officers of the central organization may sign the consent.

  4. If examining a group return, secure the consent from the officers of the central organization, using the special EIN of the group return.

    Note:

    In some circumstances, contact Area Counsel when the subordinates are separate legal entities, such as corporations, trusts, or other entities.

  5. In all situations, if there is a duly authorized valid Power of Attorney, the POA may sign the consent on behalf of the organization. Attach a copy of the signed Power of Attorney to the signed consent form.

4.75.24.3.3  (02-12-2013)
Notification Requirements

  1. With the exception of modifications, terminations and revocations, there is no need to normally notify a central organization of an examination of an intermediate or subordinate organization.

  2. If unable to contact the subordinate organization, contact the central (or intermediate) organization to obtain assistance in contacting the officers of the subordinate. The central organization is responsible for ensuring that the subordinate organization continues to meet the requirements for exemption under the group ruling.

  3. See the following chart for the appropriate letter to issue and the group that issues the letter:

    Taxpayer's situation Letter to use Unit responsible for issuance
    Subordinate/intermediate non-501(c)(3) revocation ("removal from group exemption coverage" ) Letter 3610-R, 30-Day letter Exam group
    Letter to issue in response to 30-Day letter
    If valid protest received -
    Issue Rebuttal letter
    (Exhibit 4.75.24-1)
    Exam group
    If invalid protest or no reply -
    30-Day letter becomes final
    n/a
    If agreement is secured -
    Agreed final revocation letter
    (Exhibit 4.75.24-2)
    Mandatory Review
    Notification letter to Central Organization if revocation becomes final
    (Exhibit 4.75.24-3)
    Mandatory Review
    Subordinate/intermediate 501(c)(3) revocation ("removal from group exemption coverage" ) Letter 3618, 30-Day letter Exam group
    Letter to issue in response to 30-Day letter If valid protest received -
    Issue Rebuttal letter
    (Exhibit 4.75.24-1)
    Exam group
    If invalid protest or no reply -
    90-Day Final Adverse Determination Letter,
    (Exhibit 4.75.24-4)
    Mandatory Review
    If agreement is secured - 90-Day Final Adverse Determination Letter,
    (Exhibit 4.75.24-4)
    Mandatory Review
    Notification letter to Central Organization if revocation becomes final
    (Exhibit 4.75.24-3)
    Mandatory Review
    Subordinate/intermediate termination Termination Letter - 501(c)(3)
    (Exhibit 4.75.24-5)
    or
    Termination Letter - Non-501(c)(3)
    (Exhibit 4.75.24-6)
    Mandatory Review
    Notification letter to Central Organization
    (Exhibit 4.75.24-7)
    Mandatory Review
    Central non-501(c)(3) revocation 30-Day letter
    (Exhibit 4.75.24-8)
    Exam group
    Letter to issue in response to 30-Day letter If valid protest received -
    Issue Rebuttal letter
    (Exhibit 4.75.24-1)
    Exam group
    If invalid protest or no reply -
    30-Day letter becomes final
    n/a
    If agreement is secured -
    Agreed final revocation letter
    (Exhibit 4.75.24-9)
    Mandatory Review
    Central 501(c)(3) revocation 30-Day letter
    (Exhibit 4.75.24-10)
    Exam group
    Letter to issue in response to 30-Day letter If valid protest received -
    Rebuttal letter
    (Exhibit 4.75.24-1)
    Exam group
    If invalid protest or no reply -
    90-Day final adverse determination letter
    (Exhibit 4.75.24-11)
    Mandatory Review
    If agreement is secured -
    90-Day final adverse determination letter
    (Exhibit 4.75.24-11)
    Mandatory Review
    Central termination Termination letter
    (Exhibit 4.75.24-12)
    Mandatory Review

  4. Prepare all letters issued to the taxpayer. For Mandatory Review letters, leave the contact information fields blank. Upload the letter to RCCMS and note on the Form 3198-A the file name for the letter and its folder location on RCCMS.

4.75.24.4  (02-12-2013)
Revocations

  1. When determining that a subordinate or intermediate organization should no longer be tax-exempt, you are effectively proposing to remove the organization from the group ruling. This terminates their exempt status, and constitutes an adverse action that triggers the subordinate's rights to appeal. When writing the report of examination, minimize the use of such terms as "revoke" and "revocation" . Instead, use the phrase "removal from the group exemption" or some variant thereof.

  2. Removal of any subordinates that are under an IRC 501(c)(3) group ruling triggers the administrative record requirement. See IRM 4.75.32.

  3. A revocation of a central organization's exemption automatically results in the revocation of all subordinates in the group ruling. If the central organization is subject to declaratory judgment procedures under IRC 7428, Mandatory Review (or Appeals) issues a 90-day final adverse determination letter (FADL). If the central organization is not subject to IRC 7428, the 30 day letter serves as the final letter, unless the revocation is protested or agreed whereby a final agreed revocation letter is issued by Mandatory Review. See a sample agreed revocation letter at Exhibit 4.75.24-9. See also IRM 4.75.20.

  4. For all revocations of central or subordinate organizations under examination, prepare Form 2363-A to update the EO BMF status to 22. Leave the Form 2363-A in the case file (and/or upload the Form 2363-A to RCCMS). See IRM 4.75.31 regarding securing converted returns or enforcing income tax on revoked organizations.

  5. If Mandatory Review concurs with (or Appeals sustains) the revocation, Mandatory Review will send Form 2363-A to the FAST unit to update the EO BMF status to 22. In the case of a central organization being revoked, the GEN file updates all the subordinates to status 28.

4.75.24.5  (02-12-2013)
Terminations

  1. Organizations that have their own exemption letter are corporations, trusts, or associations. Organizations included under a group ruling may receive charters from the central organization. This is common with many fraternal and veterans’ organizations.

  2. For termination procedures, see IRM 4.75.16. When examining a subordinate that has a charter from the parent, in lieu of or in addition to a certificate of incorporation, determine whether the charter has been rescinded/revoked by the central organization. Obtain a copy of the letter rescinding/revoking the charter of the subordinate entity.

  3. When a central organization dissolves/terminates, the group ruling's exemption is also terminated. The central organization notifies the subordinates of the termination of their exemption under the group ruling. A subordinate may then file for a separate exemption letter through the regular Form 1023/1024 procedures.

  4. For all subordinate/intermediate termination cases, prepare Form 2363-A to update the status to 20. Leave the Form 2363-A in the case file (and/or upload the Form 2363-A to RCCMS). Mandatory Review sends the Form 2363-A to the FAST unit upon completion of the case review.

  5. When a central organization terminates, prepare Form 2363-A to update the special EIN's status to 29. Leave the Form 2363-A in the case file (and/or upload the Form 2363-A to RCCMS). Mandatory Review sends the Form 2363-A to the FAST unit upon completion of the case review. When processed, the subordinates are updated to EO BMF status 28.

4.75.24.6  (02-12-2013)
Concurrent Examinations

  1. When a central organization is terminated, when its exemption is revoked (automatically or manually), or when it files a final return, its group ruling dissolves. The action impacts any current examination of an intermediate or subordinate organization. All members of the group ruling are updated to EO BMF status 28. Any former subordinate organizations who later file a Form 990 series return are updated to status 40 or 36, depending on the code section claimed on the return. Subordinate organizations are also placed in status 40 or 36 upon notification by a central organization that it is dissolving its group ruling (but not terminating).

  2. When possible, attempt to coordinate audits of parent and subordinate organizations. For those auditing subordinate organizations, check AIMS to see if the parent and/or the group return is under audit. Contact the group conducting the audit to discuss the audit issues and coordinate actions.

  3. Certain actions are taken by Mandatory Review when these events occur:

    For all central organization terminations and revocations:
    1. Mandatory Review or Appeals issues the final letter (termination, revocation, or FADL to the central organization.)
    2. The reviewer, or Appeals, notifies the Manager, Mandatory Review, of the issuance of the letter to the central organization.
    3. The Manager, Mandatory Review, in turn notifies the Manager, EPR, of the termination or revocation of the central organization.
    4. The Manager, EPR, sends a secure e-mail to the Area Managers providing directions concerning any subordinates/intermediates in their inventories. See Exhibit 4.75.24-14 for terminations. See Exhibit 4.75.24-15 for non-501(c)(3) revocations. See Exhibit 4.75.24-16 for 501(c)(3) revocations.

    In addition, for 501(c)(3) central organization revocations:
    5. When the waiting period pursuant to IRC 7428 ends, either the Statute Coordinator, Mandatory Review, or Appeals, depending on the location of the file, notifies the Manager, Mandatory Review of whether a petition was filed with the court.
    6. The Manager, Mandatory Review, informs the Manager, EPR.
    7. If no petition was filed, the Manager, EPR, sends a secure e-mail to the Area Managers instructing them to proceed with final actions. See Exhibit 4.75.24-17.

    Note:

    Cases where a petition was filed remain in suspense.

    8. Upon notification by Appeals or Counsel of the conclusion of the court case(s), the Manager, EPR, sends a secure e-mail to the Area Managers with instructions for removing cases from suspense and concluding the audits. See Exhibit 4.75.24-18 and Exhibit 4.75.24-19.

  4. The following table is a timing chart with respect to actions taken on the parent and subordinate organizations:

    If the parent's revocation/termination... Then for the subordinate...
    Occurs prior to that of the subordinate Close the examination of the Form 990.
    Pursue other taxes (excise/employment).
    Occurs after that of the subordinate Follow normal procedures.

Exhibit 4.75.24-1 
Sample Rebuttal Letter

 
Internal Revenue Service   Department of the Treasury
TE/GE Exempt Organizations Examinations
[Insert street address]
[Insert city, state, and zip code]
 
 
Date: [Insert date]   Taxpayer Identification Number:
[Insert TIN]
Form:
[Insert form number]
Tax Year(s) Ended:
[Insert tax periods]
Person to Contact/ID Number:
[Insert name, ID number]
Contact Numbers:
Phone: [Insert phone number]
Fax: [Insert fax number]
[Insert name of entity]
[Insert street address]
[Insert city, state, and zip code]

Manager's Name/ID Number:
[Insert name, ID number]
Manager's Contact Number:
[Insert phone number]
 
Dear Sir or Madam:
We have considered your protest and have concluded that it does not alter our original determination.
We are enclosing a copy of the "Government's Reply to Taxpayer's Protest" for your information.
Accordingly, the case is being forwarded to the Office of Appeals for further consideration. They will reply directly to you. No further action by you is necessary.
Thank you for your cooperation.
  Sincerely,
 
 
  [Insert name]
EO Examining Agent
Enclosure:
Government's Reply to Taxpayer's Protest

Exhibit 4.75.24-2 
Agreed Final Revocation Letter - Non-501(c)(3) Subordinate

Internal Revenue Service   Department of the Treasury
TE/GE Exempt Organizations Examinations
1100 Commerce Street M/C 4920 DAL
Dallas, TX 75242
 
       
Date: [Insert date]   Taxpayer Identification Number:
[Insert TIN]
Form:
[Insert form number]
Tax Period(s) Ended:
[Insert tax periods]
Person to Contact/ID Number:
[Insert name, ID number]
[Insert name of entity]
[Insert street address]
[Insert city, state, and zip code]
  Contact Numbers:
Phone: [Insert phone number]
Fax: [Insert fax number]
         

CERTIFIED MAIL - RETURN RECEIPT REQUESTED

Dear Sir or Madam:

In a determination letter dated [ date ], you were held to be exempt from Federal income tax under section 501(c)([ ]) of the Internal Revenue Code (the Code).

Based on recent information received, we have determined you have not operated in accordance with the provisions of section 501(c)([ ]) of the Code. Accordingly, your exemption from Federal income tax is revoked effective [ date ]. This is a final letter with regard to your exempt status.

We previously provided you a report of examination explaining why we believe revocation of your exempt status was necessary. At that time, we informed you of your right to contact the Taxpayer Advocate, as well as your appeal rights. On [ date ] you signed Form 6018-A, Consent to Proposed Action, agreeing to the revocation of your exempt status under section 501(c)([ ]) of the Code.

You are required to file Federal income tax returns for the tax period(s) shown above. If you have not yet filed these returns, please file them with the Ogden Service Center within 60 days from the date of this letter, unless a request for an extension of time is granted. File returns for later tax years with the appropriate service center indicated in the instructions for those returns.

You have the right to contact the office of the Taxpayer Advocate. Taxpayer Advocate assistance is not a substitute for established IRS procedures, such as the formal appeals process. The Taxpayer Advocate cannot reverse a legally correct tax determination, or extend the time fixed by law that you have to file a petition in a United States court. The Taxpayer Advocate can, however, see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling. You may call toll-free, 1-877-777-4778, and ask for Taxpayer Advocate Assistance. If you prefer, you may contact your local Taxpayer Advocate at:
Taxpayer Advocate Service
[1st Line Address]
[2nd Line Address]
[City, State Zip]
[Phone Number]

If you have any questions, please contact the person whose name and telephone number are shown at the beginning of this letter.

Thank you for your cooperation.
  Sincerely,




[Insert name]
Director, EO Examinations
 

Exhibit 4.75.24-3 
Notification Letter to Central Organization - Revocation of Subordinate

 
Internal Revenue Service Department of the Treasury
TE/GE Exempt Organizations Examinations
1100 Commerce Street M/C 4920 DAL
Dallas, TX 75242
 
 
Date: Taxpayer Identification Number:
[Insert TIN]
Person to Contact/ID Number:
[Insert name, ID number]
[Insert name of entity]
[Insert street address]
[Insert city, state, and zip code]
Contact Numbers:
Phone: [Insert phone number]
Fax: [Insert fax number]
 
Dear Sir or Madam:
RE: [Subordinate organization’s name]
EIN: [Subordinate organization’s EIN]
Effective [insert date], we removed [insert subordinate organization name] from coverage under your group exemption. Your subordinate is no longer exempt under Section 501(c)( _) of the Internal Revenue Code.
If you have any questions, please contact the person listed above.
  Sincerely,
 
 
  [Insert name]
Director, EO Examinations

Exhibit 4.75.24-4 
90-Day Final Adverse Determination Letter - Revocation of 501(c)(3) Subordinate

 
Internal Revenue Service   Department of the Treasury
TE/GE Exempt Organizations Examinations
1100 Commerce Street M/C 4920 DAL
Dallas, TX 75242
 
 
Date: [Insert date]   Taxpayer Identification Number:
[Insert TIN]
Person to Contact:
[Insert name]
Employee Identification Number:
[Insert ID Number]
[Insert name of entity]
[Insert attention line]
[Insert street address]
[Insert city, state, and zip code]
Employee Telephone Number:
[Insert phone number] (Phone)
[Insert fax number] (Fax)
 
CERTIFIED MAIL
Dear [Sir or Madam],
This is a final adverse determination regarding your exempt status under section 501(c)(3) of the Internal Revenue Code (the Code). Our favorable determination letter to you dated [date] is hereby revoked and you are no longer exempt under section 501(a) of the Code effective [date].
The revocation of your exempt status was made for the following reason[s]:
[Insert applicable and appropriate summary of the reasons for the revocation.]
Contributions to your organization are no longer deductible.
{Note: If, the organization has deductibility code “2”, this paragraph is not applicable}
You are required to file income tax returns on Form [1120 or 1041]. If you have not already filed these returns and the agent has not provided you instructions for converting your previously filed Form(s) 990 [or 990-EZ or 990-BL or 990-PF] to Form(s) 1120 [or Form(s) 1041], you should file these income tax returns with the appropriate Service Center for the tax year[s] ending [date], and for all tax years thereafter in accordance with the instructions of the return.
[As you were a private foundation as of the effective date of revocation, you are considered to be taxable private foundation until you terminate your private foundation status under section 507 of the Code. In addition to your income tax return, you must also continue to file Form 990-PF by the 15th Day of the fifth month after the end of your annual accounting period.]
Processing of income tax returns and assessments of any taxes due will not be delayed should a petition for declaratory judgment be filed under section 7428 of the Internal Revenue Code.
If you decide to contest this determination, you may file an action for declaratory judgment under the provisions of section 7428 of the Code in one of the following three venues: United States Tax Court, the United States Court of Federal Claims, or the United States District Court for the District of Columbia. A petition or complaint in one of these three courts must be filed before the 91st day after the date this determination was mailed to you if you wish to seek review of our determination. Please contact the clerk of the respective court for rules and the appropriate forms regarding filing petitions for declaratory judgment by referring to the enclosed Publication 892. Please note that the United States Tax Court is the only one of these courts where a declaratory judgment action can be pursued without the services of a lawyer. You may write to the courts at the following addresses:
United States Tax Court
400 Second Street, NW
Washington, DC 20217
US Court of Federal Claims
717 Madison Place, NW
Washington, DC 20005
U. S. District Court for the District of Columbia
333 Constitution Ave., N.W.
Washington, DC 20001
You also have the right to contact the Office of the Taxpayer Advocate. Taxpayer Advocate assistance is not a substitute for established IRS procedures, such as the formal Appeals process. The Taxpayer Advocate cannot reverse a legally correct tax determination, or extend the time fixed by law that you have to file a petition in a United States court. The Taxpayer Advocate can, however, see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling. You may call toll-free, 1-877-777-4778, and ask for Taxpayer Advocate Assistance. If you prefer, you may contact your local Taxpayer Advocate at:
Taxpayer Advocate Service
[1st Line Address]
[2nd Line Address]
[City, State Zip]
[Phone Number]
If you have any questions, please contact the person whose name and telephone number are shown in the heading of this letter.
  Sincerely,
 
 
  [Name of Designated Official]
Designated Official
Enclosure:
Publication 892

Exhibit 4.75.24-5 
Termination Letter - 501(c)(3) Subordinate

 
Internal Revenue Service   Department of the Treasury
TE/GE Exempt Organizations Examinations
1100 Commerce Street MC 4920 DAL
Dallas, TX 75242
 
 
Date: [Insert date]  
Taxpayer Identification Number:
[Insert TIN]
Form:
[Insert form number]
Tax Period Ended:
[Insert tax period]
Person to Contact:
[Insert name of reviewer]
Employee Identification Number:
[Insert ID number]
[Insert name of entity]
[Insert street address]
[Insert city, state, and zip code]
Employee Telephone Number:
[Insert phone number] (Phone)
[Insert fax number] (Fax)
 
Dear Sir or Madam,
We have concluded our examination of your Form[s] [990/990-EZ/990-N], [Return of Organization Exempt from Income Tax/Short Form Return of Organization Exempt From Income Tax/( electronic postcard)] for the year[s] ended [insert tax year(s)]. We have accepted your return[s] as filed.
On [insert date] you dissolved your organizational document and have discontinued operations. You have distributed your residual assets to another organization recognized as tax exempt under section 501(c)(3) of the Internal Revenue Code.
As a result of the dissolution, your exempt status under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3) is terminated and no longer effective after [insert date of dissolution].
Contributions to you are not deductible after [insert date of dissolution].
If you have any questions, please contact the person whose name and telephone number are shown in the heading of this letter.
Thank you for your cooperation.
  Sincerely,
 
 
  [Insert name]
Director, EO Examinations

Exhibit 4.75.24-6 
Termination Letter - Non-501(c)(3) Subordinate

 
Internal Revenue Service   Department of the Treasury
TE/GE Exempt Organizations Examinations
1100 Commerce Street MC 4920 DAL
Dallas, TX 75242
 
 
Date: [Insert date]  
Taxpayer Identification Number:
[Insert TIN]
Form:
[Insert form number]
Tax Period Ended:
[Insert tax period]
Person to Contact:
[Insert name of reviewer]
Employee Identification Number:
[Insert ID number]
[Insert name of entity]
[Insert street address]
[Insert city, state, and zip code]
Employee Telephone Number:
[Insert phone number] (Phone)
[Insert fax number] (Fax)
 
Dear Sir or Madam,
We have concluded our examination of your Form[s] [990/990-EZ/990-N], [Return of Organization Exempt from Income Tax/Short Form Return of Organization Exempt From Income Tax/( electronic postcard)] for the year[s] ended [insert tax year(s)]. We have accepted your return[s] as filed.
On [insert date] you dissolved your organizational document and have discontinued operations. You have distributed your residual assets to another organization recognized as tax exempt under section 501(c)(_) of the Internal Revenue Code.
As a result of the dissolution, your exempt status under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(_) is terminated and no longer effective after [insert date].
If you have any questions, please contact the person whose name and telephone number are shown in the heading of this letter.
Thank you for your cooperation.
  Sincerely,
 
 
  [Insert name]
Director, EO Examinations

Exhibit 4.75.24-7 
Notification Letter to Central Organization - Termination of Subordinate

 
Internal Revenue Service Department of the Treasury
TE/GE Exempt Organizations Examinations
1100 Commerce Street M/C 4920 DAL
Dallas, TX 75242
 
 
Date: Taxpayer Identification Number:
[Insert TIN]
Person to Contact/ID Number:
[Insert name, ID number]
[Insert name of entity]
[Insert street address]
[Insert city, state, and zip code]
Contact Numbers:
Phone: [Insert phone number]
Fax: [Insert fax number]
 
Dear Sir or Madam:
RE: [Subordinate organization’s name]
EIN: [Subordinate organization’s EIN]
Effective [insert date], [insert subordinate organization’s name]’s exemption under Section 501(c)( _) of the Internal Revenue Code is terminated because [insert subordinate’s name] dissolved.
As a result, your group ruling letter no longer covers [insert subordinate organization’s name].
If you have any questions, please contact the person listed above.
  Sincerely,
 
 
  [Insert name]
Director, EO Examinations

Exhibit 4.75.24-8 
Central Organization 30-Day Proposed Revocation Letter (Non-501(c)(3))

 
Internal Revenue Service   Department of the Treasury
TE/GE Exempt Organizations Examinations
[Insert street address]
[Insert city, state, and zip code]
 
 
Date: [Insert date]   Taxpayer Identification Number:
[Insert TIN]
Form:
[Insert form number]
Tax Year(s) Ended:
[Insert tax periods]
Person to Contact/ID Number:
[Insert name, ID number]
Contact Numbers:
Phone: [Insert phone number]
Fax: [Insert fax number]
[Insert name of entity]
[Insert street address]
[Insert city, state, and zip code]
Manager's Name/ID Number:
[Insert name, ID number]
Manager's Contact Number:
[Insert phone number]
Response Due Date:
[Insert date (Month Day, Year)]
 
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
Dear Sir or Madam:
We are enclosing our report of examination explaining why we believe revocation of your organization's exempt status is necessary.
If You Agree With The Proposed Revocation
Sign the enclosed Form 6018-A, Consent to Proposed Action, and return it to the contact person at the address listed above by the response due date. We will then send you a final letter revoking your exempt status.
If You Do Not Agree With The Proposed Revocation
1. You may request a meeting or telephone conference with the manager listed above.
2. You may file a protest with the Appeals office of the IRS by submitting a written request within 30 calendar days from the date of this letter to the contact person at the address listed above. A valid protest must contain:
 


a statement of the facts you do not agree with, if any
the applicable law, if any, you are relying on
arguments in support of your position
a penalty of perjury statement
  For more detailed information regarding what is required for a valid protest, please refer to page one of the enclosed Publication 892, How to Appeal an IRS Decision on Tax-Exempt Status, and page six of the enclosed Publication 3498, The Examination Process.
  The Appeals office is independent of the Exempt Organizations division and resolves most disputes informally. Publication 3498 also includes information on your rights as a taxpayer and the IRS collection process. Please note that Fast Track Mediation referred to in Publication 3498, generally does not apply after issuance of this letter.
  If you and Appeals do not agree on some or all of the issues after your Appeals conference, or if you do not request an Appeals conference, you may file suit in the United States Tax Court, the United States Court of Federal Claims, or the United States District Court, after satisfying procedural and jurisdictional requirements.
3. You may request that we refer this matter for technical advice as explained in Publication 892 and an annual revenue procedure. Please call the contact person if you are considering requesting technical advice. If we issue a determination letter to you based on a technical advice memorandum issued by the Exempt Organizations Rulings and Agreements function, then no further administrative appeal will be available to you within the IRS on the matter.
If You Do Not Respond To This Proposal
If we do not hear from you within 30 calendar days from the date of this letter, we will process your case based on the recommendations shown in the report of examination and this letter will become final.
In The Event Of Revocation
1. You will be required to file federal income tax returns for the tax year(s) shown above. File these returns with the contact person within 30 calendar days from the date of this letter, unless an extension of time is granted. File returns for later tax years with the appropriate service center indicated in the return instructions.
2. Revenue Procedure 80-27 provides guidance on group exemptions. According to this revenue procedure, in the event of revocation we also revoke your group exemption. As a result, none of your subordinates would be tax exempt. You would need to notify each subordinate of this action. Then, each subordinate desiring tax exemption would file an individual application. Otherwise, each subordinate would file a federal tax return.
Taxpayer Advocate
You have the right to contact the Taxpayer Advocate Service. Their assistance is not a substitute for established IRS procedures, such as the formal appeals process. They cannot reverse a legally correct tax determination, or extend the time fixed by law that you have to file a petition in a United States court. However, they can see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling. You may call toll-free 1-877-777-4778 and ask for Taxpayer Advocate assistance. If you prefer, you may contact your local Taxpayer Advocate at:
Internal Revenue Service
Taxpayer Advocate Service
[1st Line Address]
[2nd Line Address]
[City, State, Zip]
[Phone Number]
If you have any questions, please contact the person listed above.
Thank you for your cooperation.
  Sincerely,
 
 
  [Insert name]
Director, EO Examinations
Enclosures:
Report of Examination
Form 6018-A
Publication 892
Publication 3498

Exhibit 4.75.24-9 
Central Organization Agreed Final Revocation Letter (Non-501(c)(3))

 
Internal Revenue Service Department of the Treasury
TE/GE Exempt Organizations Examinations
1100 Commerce Street M/C 4920 DAL
Dallas, TX 75242
 
 
Date: Taxpayer Identification Number:
[Insert TIN]
Form:
[Insert form number]
Tax Year(s) Ended:
[Insert tax periods]
Person to Contact/ID Number:
[Insert reviewer name, ID number]
[Insert name of entity]
[Insert street address]
[Insert city, state, and zip code]
Contact Numbers:
Phone: [Insert phone number]
Fax: [Insert fax number]
 
Dear Sir or Madam:
On [insert date], we granted you exemption from federal income tax under Section 501(c)(_) of the Internal Revenue Code ("the Code" ). On [insert date], we issued a group exemption for you and your subordinate organizations. We assigned you Group Exemption Number ("GEN" ) [insert GEN].
We audited you for the year[s] indicated above. We determined you did not comply with the rules and regulations of Section 501(c)(_) of the Code. Your tax exemption is revoked, effective [insert date]. This is a final letter with regard to your exempt status.
On [insert date], we gave you our report of examination explaining why we believe this revocation is necessary. We told you of your right to contact the Taxpayer Advocate, and your appeal rights. On [insert date], you signed Form 6018-A, Consent to Proposed Action, agreeing to the revocation.
You are required to file federal tax returns for the tax period(s) shown above. Unless an extension of time is granted or the returns are already filed, send them to Ogden Service Center within 60 days from the date on this letter. Returns for later years are filed with the appropriate service center indicated in the return instructions.
Revenue Procedure 80-27 provides guidance on group exemptions. According to this revenue procedure, when we revoke your tax exemption we also revoke your group exemption. Effective [date], your Group Exemption Number [insert GEN] is no longer valid. Please tell your subordinates of this action. Each subordinate that wants tax exemption should file an individual application. Otherwise, each subordinate should file a federal income tax return.
You have the right to contact the Taxpayer Advocate Service. Their assistance is not a substitute for established IRS procedures, such as the formal appeals process. They cannot reverse a legally correct tax determination, or extend the time fixed by law that you have to file a petition in a United States court. However, they can see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling. You may call toll-free 1-877-777-4778 and ask for Taxpayer Advocate assistance. If you prefer, you may contact your local Taxpayer Advocate at:
Internal Revenue Service
Taxpayer Advocate Service
[1st Line Address]
[2nd Line Address]
[City, State Zip]
[Phone Number]
If you have any questions, please contact the person listed above.
Thank you for your cooperation.
  Sincerely,
 
 
  [Insert name]
Director, EO Examinations

Exhibit 4.75.24-10 
Central Organization 30-Day Proposed Revocation Letter (501(c)(3))

 
Internal Revenue Service   Department of the Treasury
TE/GE Exempt Organizations Examinations
[Insert street address]
[Insert city, state, and zip code]
 
 
Date: [Insert date]   Taxpayer Identification Number:
[Insert TIN]
Form:
[Insert form number]
Tax Year(s) Ended:
[Insert tax periods]
Person to Contact/ID Number:
[Insert name, ID number]
Contact Numbers:
Phone: [Insert phone number]
Fax: [Insert fax number]
[Insert name of entity]
[Insert street address]
[Insert city, state, and zip code]
Manager's Name/ID Number:
[Insert name, ID number]
Manager's Contact Number:
[Insert phone number]
Response Due Date:
[Insert date (Month Day, Year)]
 
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
Dear Sir or Madam:
Why You are Receiving this Letter
We propose to revoke your status as an organization described in section 501(c)(3) of the Internal Revenue Code (Code). Enclosed is our report of examination explaining the proposed action.
What You Need to Do if You Agree
Sign the enclosed Form 6018, Consent to Proposed Action, and return it to the contact person at the address listed above (unless you have already provided us a signed Form 6018). We'll issue a final revocation letter determining that you aren't an organization described in section 501(c)(3) return.
After we issue the final revocation letter, we’ll announce that your organization is no longer eligible for contributions deductible under section 170 of the Code.
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 revocation letter. Failing to respond to this proposal will adversely impact your legal standing to seek a declaratory judgment because you failed to exhaust your administrative remedies.
What you Need to Do if You Disagree with the Proposed Revocation
1. You may request a meeting or telephone conference with the manager listed above.
2. You may file a protest with the Appeals office of the IRS by submitting a written request within 30 calendar days from the date of this letter to the contact person at the address listed above. A valid protest must contain:
 


a statement of the facts you do not agree with, if any
the applicable law, if any, you are relying on
arguments in support of your position
a penalty of perjury statement
  For more detailed information regarding what is required for a valid protest, please refer to page one of the enclosed Publication 892, How to Appeal an IRS Decision on Tax-Exempt Status, and page six of the enclosed Publication 3498, The Examination Process.
  The Appeals office is independent of the Exempt Organizations division and resolves most disputes informally. Publication 3498 also includes information on your rights as a taxpayer and the IRS collection process. Please note that Fast Track Mediation referred to in Publication 3498, generally does not apply after issuance of this letter.
  If you and Appeals do not agree on some or all of the issues after your Appeals conference, or if you do not request an Appeals conference, you may file suit in the United States Tax Court, the United States Court of Federal Claims, or the United States District Court, after satisfying procedural and jurisdictional requirements.
3. You may request that we refer this matter for technical advice as explained in Publication 892 and an annual revenue procedure. Please call the contact person if you are considering requesting technical advice. If we issue a determination letter to you based on a technical advice memorandum issued by the Exempt Organizations Rulings and Agreements function, then no further administrative appeal will be available to you within the IRS on the matter.
In The Event Of Revocation
1. If you receive a final revocation letter, you'll be required to file federal income tax returns for the tax year(s) shown above as well as for subsequent tax years.
2. Revenue Procedure 80-27 provides guidance on group exemptions. According to this revenue procedure, in the event of revocation we also revoke your group exemption. As a result, none of your subordinates would be tax exempt. You would need to notify each subordinate of this action. Then, each subordinate desiring tax exemption would file an individual application. Otherwise, each subordinate would file a federal tax return.
Taxpayer Advocate
You have the right to contact the Taxpayer Advocate Service. Their assistance is not a substitute for established IRS procedures, such as the formal appeals process. They cannot reverse a legally correct tax determination, or extend the time fixed by law that you have to file a petition in a United States court. However, they can see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling. You may call toll-free 1-877-777-4778 and ask for Taxpayer Advocate assistance. If you prefer, you may contact your local Taxpayer Advocate at:
Internal Revenue Service
Taxpayer Advocate Service
[1st Line Address]
[2nd Line Address]
[City, State, Zip]
[Phone Number]
If you have any questions, please contact the person listed above.
Thank you for your cooperation.
  Sincerely,
 
 
  [Insert name]
Director, EO Examinations
Enclosures:
Report of Examination
Form 6018
Publication 892
Publication 3498

Exhibit 4.75.24-11 
Central Organization 90-Day Final Adverse Determination Letter (501(c)(3))

 
Internal Revenue Service   Department of the Treasury
TE/GE Exempt Organizations Examinations
1100 Commerce Street M/C 4920 DAL
Dallas, TX 75242
 
 
Date: [Insert date]   Taxpayer Identification Number:
[Insert TIN]
Person to Contact:
[Insert name of reviewer]
Employee Identification Number:
[Insert ID Number]
[Insert name of entity]
[Insert attention line]
[Insert street address]
[Insert city, state, and zip code]
Employee Telephone Number:
[Insert phone number] (Phone)
[Insert fax number] (Fax)
 
CERTIFIED MAIL
Dear [Sir or Madam]:
This is a final adverse determination regarding your exempt status under section 501(c)(3) of the Internal Revenue Code (the Code). Our favorable determination letter to you dated [date] is hereby revoked and you are no longer exempt under section 501(a) of the Code effective [date].
The revocation of your exempt status was made for the following reason[s]:
[Insert applicable and appropriate summary of the reasons for the revocation.]
Contributions to your organization are no longer deductible.
{Note: If, the organization has deductibility code "2" , this paragraph is not applicable}
Revenue Procedure 80-27 provides guidance on group exemptions. According to this revenue procedure, when we revoke your tax exemption, we also revoke your group exemption. Effective [date], your Group Exemption Number [insert GEN] is no longer valid. Please tell your subordinates of this action. Each subordinate that wants tax exemption should file an individual application. Otherwise, each subordinate should file a federal tax return.
You are required to file federal tax returns for the tax period(s) shown above. Unless an extension of time is granted or the returns are already filed, send them to Ogden Service Center within 60 days from the date on this letter. Returns for later years are filed with the appropriate service center indicated in the return instructions.
If you decide to contest this determination, you may file an action for declaratory judgment under the provisions of section 7428 of the Code in one of the following venues:


the United States Tax Court
the United States Court of Federal Claims
the United States District Court for the District of Columbia
A petition or complaint in one of these three courts must be filed before the 91st day after the date this determination was mailed to you if you wish to seek review of our determination. Please contact the clerk of the respective court for rules and the appropriate forms regarding filing petitions for declaratory judgment by referring to the enclosed Publication 892. Please note that the United States Tax Court is the only one of these courts where a declaratory judgment action can be pursued without the services of a lawyer. You may write to the courts at the following addresses:
United States Tax Court
400 Second Street, NW
Washington, DC 20217
U.S. Court of Federal Claims
717 Madison Place, NW
Washington, DC 20005
U. S. District Court for the District of Columbia
333 Constitution Ave., N.W.
Washington, DC 20001
Filing a petition for declaratory judgment however, does not delay the processing of income tax returns and assessments of any taxes due.
You have the right to contact the Taxpayer Advocate Service. Their assistance is not a substitute for established IRS procedures, such as the formal appeals process. They cannot reverse a legally correct tax determination, or extend the time fixed by law that you have to file a petition in a United States court. However, they can see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling. You may call toll-free 1-877-777-4778 and ask for Taxpayer Advocate assistance. If you prefer, you may contact your local Taxpayer Advocate at:
Internal Revenue Service
Taxpayer Advocate Service
[1st Line Address]
[2nd Line Address]
[City, State, Zip]
[Phone Number]
If you have any questions, please contact the person listed above.
  Sincerely,
 
 
  [Insert name]
Director, EO Examinations
Enclosures:
Publication 892
Form 6018, Consent to Proposed Action - Section 7428

Exhibit 4.75.24-12 
Central Organization Termination Letter

 
Internal Revenue Service Department of the Treasury
TE/GE Exempt Organizations Examinations
1100 Commerce Street M/C 4920 DAL
Dallas, TX 75242
 
 
Date: Taxpayer Identification Number:
[Insert TIN]
Person to Contact/ID Number:
[Insert name, ID number]
[Insert name of entity]
[Insert street address]
[Insert city, state, and zip code]
Contact Numbers:
Phone: [Insert phone number]
Fax: [Insert fax number]
 
Dear Sir or Madam:
We have concluded our examination of your Form[s] [990/990-EZ], [Return of Organization Exempt from Income Tax/Short Form Return of Organization Exempt From Income Tax] for the year[s] ended [insert tax year(s)]. We have accepted your return[s] as filed.
On [insert date] you dissolved your organizational document and have discontinued operations. You have distributed your residual assets for one or more exempt purposes within the meaning of section 501(c)(_) of the Internal Revenue Code.
As a result of the dissolution, your exempt status under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(_) is terminated and no longer effective after [insert date of dissolution].


[Contributions to you are not deductible after [date].]
Revenue Procedure 80-27 provides guidance on group exemptions. According to this revenue procedure, in the event of termination, we must also terminate your group exemption. Effective [date], your Group Exemption Number [insert GEN] is no longer valid. Please tell your subordinates of this action. Each subordinate that wants tax exemption should file an individual application. Otherwise, each subordinate should file a federal tax return.
If you have any questions, please contact the person whose name and telephone number are shown in the heading of this letter.
Thank you for your cooperation.
  Sincerely,
 
 
  [Insert name]
Director, EO Examinations

Exhibit 4.75.24-13 
Closing Letter - Surveyed Examination of Subordinate After Group Exemption Dissolution

 
Internal Revenue Service   Department of the Treasury
TE/GE Exempt Organizations Examinations
1100 Commerce Street MC 4980 DAL
Dallas, TX 75242
 
 
Date: [Insert date]   Form:
[Insert form number]
Tax Year Ended:
[Insert tax periods]
Taxpayer Identification Number:
[Insert TIN]
Person to Contact:
[Insert name]
Employee Identification Number:
[Insert ID number]
[Insert name of entity]
[Insert street address]
[Insert city, state, and zip code]
  Employee Telephone Number:
[Insert phone number] (Phone)
[Insert fax number] (Fax)
 
Dear Sir or Madam,
We are terminating our current examination of your organization. You were recognized as exempt under group ruling number [enter GEN]. However, this group ruling exemption is no longer in effect as of [enter date].
If you want the IRS to recognize you as tax exempt, you need to file an application for exemption. You can find information regarding the application process on the charities and non-profits page on www.irs.gov. Otherwise, you are responsible for filing federal income tax returns for taxable periods subsequent to [enter date].
If you have any questions, please contact the person listed above.
Thank you for your cooperation.
  Sincerely,
 
 
  [Insert name]
Director, EO Examinations

Exhibit 4.75.24-14 
Secure E-Mail message from Manager, EPR, to Area Managers Regarding the Termination of a Central Organization

Subject: Central Organization Termination

On [insert date], Mandatory Review issued a termination letter to [insert name of organization]. Under Rev. Proc. 80-27, the group exemption is dissolved. Any organization under GEN [insert GEN] will now be updated to EO BMF status 28 and be subject to a Form 1120 filing requirement.

Please check your inventory to see if you have any subordinate organizations included in the group ruling of the aforementioned parent under examination. If you have cases in status 10, please survey the case. If you have cases in status 12, continue to pursue any excise and/or employment taxes. For income tax purposes for years prior to [insert effective date of termination], continue to pursue unrelated business income. For years after that date, follow the instructions in IRM 4.75.31 for converted returns.

Exhibit 4.75.24-15 
Secure E-Mail message from Manager, EPR, to Area Managers Regarding the Revocation of a Central Organization – Non 501(c)(3)

Subject: Central Organization Revocation (non-501(c)(3))

On [insert date], Mandatory Review issued a final revocation letter to [insert name of central organization]. Under Rev. Proc. 80-27, the group exemption is revoked. Any organization under GEN [insert GEN] will now be updated to EO BMF status 28 and be subject to a Form 1120 filing requirement.

Please check your inventory to see if you have any subordinate organizations included in the group ruling of the aforementioned parent under examination. If you have cases in status 10, please survey the case. If you have cases in status 12, continue to pursue any excise and/or employment taxes. For income tax purposes for years prior to [insert effective date of revocation], continue to pursue unrelated business income. For years after that date, follow the instructions in IRM 4.75.31 for converted returns. For any cases where you are pursuing revocation but no taxes, survey the case. See IRM 4.75.24-13 for the appropriate closing letter.

Exhibit 4.75.24-16 
Secure E-Mail message from Manager, EPR, to Area Managers Regarding the Revocation of a Central Organization (501(c)(3) - FADL Issued)

Subject: Central Organization Final Adverse Determination Letter Issued

On [insert date], Mandatory Review issued a 90-day final adverse determination letter proposing revocation to [insert name of central organization]. Under Rev. Proc. 80-27, the group exemption will be revoked if the revocation becomes final. Any organization under GEN [insert GEN] would be updated to EO BMF status 28 and be subject to a Form 1120 filing requirement.

Please check your inventory to see if you have any subordinate organizations included in the group ruling of the aforementioned parent under examination. If you have cases in status 10, please survey the case. If you have cases in status 12, continue to pursue any excise and/or employment taxes. For income tax purposes for years prior to [insert effective date of revocation], continue to pursue unrelated business income. For any cases where you are pursuing revocation or would consider income taxes/converted returns in subsequent years, request a statute extension for at least one year and suspense the case.

Exhibit 4.75.24-17 
Secure E-Mail message from Manager, EPR, to Area Managers Regarding the Revocation of a Central Organization (501(c)(3) - FADL Not Petitioned)

Subject: Central Organization Revocation Final

On [insert date], Mandatory Review issued a 90-day final adverse determination letter proposing revocation to [insert name of central organization], which did not file a petition with the courts. Under Rev. Proc. 80-27, the group exemption is revoked. Any organization under GEN [insert GEN] is to be updated to EO BMF status 28 and is subject to a Form 1120 filing requirement.

Please check your inventory to see if you have any subordinate organizations included in the group ruling of the aforementioned parent under examination. If you have cases in status 10, please survey the case. If you have cases in status 12, continue to pursue any excise and/or employment taxes. For income tax purposes for years prior to [insert effective date of revocation], continue to pursue unrelated business income. For subsequent years, see IRM 4.75.31 for converted returns. If pursuing revocation but no taxes, survey the case. See IRM 4.75.24-13 for the appropriate closing letter.

Exhibit 4.75.24-18 
Secure E-Mail message from Manager, EPR, to Area Managers Regarding the Revocation of a Central Organization (501(c)(3) - Courts Upheld)

Subject: Central Organization Final Adverse Letter Petitioned

On [insert date], Mandatory Review issued a 90-day final adverse determination letter proposing revocation to [insert name of central organization]. The organization has lost its court case. Under Rev. Proc. 80-27, the group exemption is revoked. Any organization under GEN [insert GEN] is to be updated to EO BMF status 28 and is subject to a Form 1120 filing requirement.

Please check your inventory to see if you have any subordinate organizations included in the group ruling of the aforementioned parent under examination. If you have cases in status 10, please survey the case. If you have cases in status 12, continue to pursue any excise and/or employment taxes. For income tax purposes for years prior to [insert effective date of revocation], continue to pursue unrelated business income. For subsequent years, see IRM 4.75.31 for converted returns. If pursuing revocation but no taxes, survey the case. See IRM 4.75.24-13 for the appropriate closing letter.

Exhibit 4.75.24-19 
Secure E-Mail message from Manager, EPR, to Area Managers Regarding the Revocation of a Central Organization (501(c)(3) - Courts Rejected)

Subject: Central Organization Final Adverse Letter Petitioned

On [insert date], Mandatory Review issued a 90-day final adverse determination letter proposing revocation to [insert name of central organization]. We did not prevail in the court case. Therefore, please check your inventory to see if you have any subordinate cases in suspense. If so, please remove those cases from suspense and continue with the examinations.


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