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Part 7. Rulings and Agreements

Chapter 21. Exempt Organizations Automated Processing Procedures

Section 5. Letter Generation (Cont. 1)

7.21.5  Letter Generation (Cont. 1)

Exhibit 7.21.5-21  (01-01-2003)
Letter 1076 (DO/CG)
EO Favorable Determination Letter to a Non-Operating Private Foundation

EDS
Paragraph
Numbers 		Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Automatic) 		 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 income tax under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3).
 3  We have further determined that, as indicated in your application, you are a private foundation within the meaning of section 509(a) of the Code. In this letter we are not determining whether you are an operating foundation as defined in section 4942(j)(3).
(Automatic)  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 your exempt status and foundation status. In the case of an amendment to your organizational document or bylaws, please send us a copy of the
 5 amended document or bylaws. Also, you should inform us of all changes in your name or address.
(Automatic)  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). However, since you are a private foundation, you are subject to excise taxes under chapter 42 of the Code. You also may be subject to other Federal excise taxes. If you have any questions about excise, employment, or other Federal
 7 taxes, please let us know.
(Automatic)  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 sections 2055, 2106, and 2522 of the Code.
 8
(Automatic) 		 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.
 9
(Automatic) 		 You are required to file Form 990–PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as a Private Foundation. Form 990–PF 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
 10
(Automatic) 		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.
 11
(Automatic) 		 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.
 12
(Automatic) 		 You are required to make your annual return available for public inspection within 180 days after the date of publication of its availability, and you must publish the notice of availability no later than the date required for filing the return. You are also required to make available a copy of your exemption application, any supporting documents, and this exemption letter. Failure to make these documents available for public inspection may subject you to a penalty of $20 per day for each day there is a failure to comply (up to a maximum of $10,000 in the case of an annual return).
 13
(Automatic) 		 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.
3211
(Selective) 		 In accordance with section 508(a) of the Code, the effective date of this determination letter is [20V].
3213
(Selective) 		 Section 508(a)(2) of the Internal Revenue Code states that an organization organized after October 9, 1969, shall not be treated as an organization described in section 501(c)(3) for any period before giving notice that it is applying for recognition of exempt status, if such notice is given after the time prescribed in the regulations.
3215
(Selective) 		 Section 1.508–1(a)(2)(i) of the Income Tax Regulations states that an organization seeking exemption under section 501(c)(3) must file the notice described in section 508(a) within 15 months from the end of the month in which the organization was organized. Such notice is filed by submitting a properly completed and executed Form 1023, exemption application, with the key District Director.
3217
(Selective) 		 Our records indicate that your notice was postmarked [20V], which is more than 15 months from the end of the month in which you were organized. Since the provisions of section 508(a)(2) are applicable to you, the effective date of your exemption is [20V]. Contributions made to you on or after this date are tax deductible.
3223
(Selective) 		 Based on information you supplied, we recognize you as exempt from Federal income tax for the period [20V], your formation or incorporation
3224
(Selective) 		date, to [20V], your dissolution date. You are not required to file Federal income tax returns for that period.
3233
(Selective) 		 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 maintain 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.
3235
(Selective) 		 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.)
3237
(Selective) 		 Evidence submitted with your application indicates that you may engage in lobbying activities. Section 501(c)(3) of the Code specifically prohibits lobbying as a substantial part of your activities. If you do not wish to be subject to the test of substantiality under section 501(c)(3), you may elect to be covered under the provisions of section 501(h) of the Code by filing Form 5768, Election/Revocation of Election by an Eligible Section 501(c)(3) Organization to Make Expenditures to Influence Legislation. Section 501(h) establishes ceiling amounts for lobbying expenditures.
3239  We considered your grant-making procedures under section 4945(g) of the Code. Based on the information submitted and assuming your scholarship program will be conducted as proposed with objectivity and nondiscrimination in awarding grants, we determined that your procedures in awarding scholarship grants comply with the requirements of section 4945(g)(1), and that scholarships granted according to these procedures will not be "taxable expenditures" within the meaning of section 4945(d)(3).
(Selective)  This determination is conditioned on the understanding that there will be
3240
(Selective) 		no material change in the facts upon which it is based. It is further conditioned on the premise that no grants will be awarded to the trust’s creators, trustees, or members of the selection committee, or for a purpose that is inconsistent with the purposes described in section 170(c)(2)(B). The approval of your grant-making procedures is a one-time approval of your system of standards and procedures that will result in grants that meet the requirements of section 4945(g)(1). Thus, approval will apply to succeeding grant programs only as long as the standards and procedures under which they are conducted do not differ materially from those described in your request.
3241
(Selective) 		 We have not considered whether grants made under your procedures are excludable from the gross income of recipients under section 117(a) of the Code. Any funds you distribute to individuals must be made on a true charitable basis to further the purposes for which you are organized. Therefore, you should maintain adequate records and case histories so that all grant distributions can be substantiated upon request by the Internal Revenue Service.
3243  Rev. Proc. 76–47, 1976–2 C.B. 670, sets forth guidelines to be used in determining whether a grant made by a private foundation under an employer-related program to a child of an employee of the particular employer to which the program relates is a scholarship grant that meets the provisions of section 117(a) of the Code (as that section read before the Tax Reform Act of 1986).
(Selective)  If a private foundation’s program satisfies the seven conditions set forth in Sections 4.01 through 4.07 of Rev. Proc. 76–47 and meets the percentage test described in Section 4.08, the Service will assume the grants meet the provisions of section 117(a), as that section read before the Tax Reform Act of 1986.
3244
(Selective) 		 You have agreed that procedures in awarding grants under your program will be in compliance with Sections 4.01 through 4.07 of Rev. Proc. 76–47 (without regard to the amendments to section 117(a) made by the Tax Reform Act of 1986). In particular, the selection of individual grant recipients will be made by a selection committee the members of which are totally independent and separate from the private foundation, the foundation’s creator, and relevant employer. The grants will not be used as a means of inducement to recruit employees nor will a grant be terminated if the employee leaves the employer. The recipient will not be restricted in a course of study that would be of particular benefit
3245 to the relevant employer or to the foundation.
(Selective)  Section 4.08 of Rev. Proc. 76–47 provides a percentage test guideline. It states that in the case of a program that awards grants to children of employees of a particular employer, the program meets the percentage test if either of the following tests is met: the number of grants awarded under that program in any year to such children does not exceed 25 percent of the number of employees’ children who were eligible, were applicants for such grants, and were considered by the selection committee in selecting the recipients of grants in that year, or the number of grants awarded under the program in any year to
3246 such children does not exceed 10 percent of the number of employees’ children who can be shown to be eligible for grants (whether or not they submitted an application) in that year.
(Selective)  You have agreed that your program will meet the requirements of either the 25 percent or 10 percent test of Section 4.08 applicable to a program that awards grants to children of employees of a particular employer. Records should be maintained to show that you meet the applicable percentage test of Section 4.08.
3247  This ruling is issued with the understanding that in applying the 10 percent test applicable to employees’ children set forth in Rev. Proc. 76–47, you will only include as eligible those children who meet the eligibility standards described in Rev. Proc. 85–51, 1985–2 C.B. 717.
(Selective)  This ruling will remain in effect as long as the procedures in awarding grants under your program remain in compliance with Sections 4.01 through 4.08 of Rev. Proc. 76–47 (without regard to the amendments to section 117(a) made by the Tax Reform Act of 1986). If you enter into any other program covering the
3248
(Selective) 		same individuals, the percentage test of Rev. Proc. 76–47 must be met in the aggregate.
3250  We considered your grant-making procedures under section 4945(g) of the Code. Based on the information submitted and assuming your scholarship program will be conducted as proposed with objectivity and nondiscrimination in awarding loans, we determined that your procedures in awarding educational loans comply with the requirements of section 4945(g)(3), and that loans granted according to these procedures will not be "taxable expenditures" within the meaning of section 4945(d)(3).
(Selective)  This determination is conditioned on the understanding that there will be
3251 no material change in the facts upon which it is based. It is further conditioned on the premise that no loans will be awarded to your trust’s creators, trustees, or members of the selection committee, or for a purpose that is inconsistent with the purposes described in section 170(c)(2)(B).
(Selective)  The approval of your educational loan procedures is a one-time approval of your system of standards and procedures that will result in loans that meet the requirements of section 4945(g)(3). Thus, approval will apply to succeeding educational loan programs only as long as the standards and procedures under which they are conducted do not differ materially from those described in your
3252 request.
(Selective)  Any funds you distribute to individuals must be made on a true charitable basis in furtherance of the purposes for which you are organized. Therefore, you should keep adequate records and case histories so that any or all loan distributions can be substantiated upon request by the Internal Revenue Service.
3254
(Selective) 		 Rev. Proc. 80–39, 1980–2 C.B. 772, sets forth guidelines to be used in determining whether educational loans made by a private foundation under an employer-related program to a child of an employee of the particular employer to which the program relates are taxable expenditures under section 4945 of the Code. If a private foundation’s program satisfies the seven conditions set forth in Sections 4.03 through 4.09 of Rev. Proc. 80–39 and meets the percentage test described in Section 4.10, the Service will assume the loans are not taxable expenditures.
3255
(Selective) 		 You have agreed that procedures in awarding loans under your program will be in compliance with Sections 4.03 through 4.09 of Rev. Proc. 80–39. In particular, the section of individual loan recipients will be made by a selection committee the members of which are totally independent and separate from the private foundation, the foundation’s creator, and the relevant employer. The loans will not be used as a means of inducement to recruit employees nor will a loan be terminated if the employee leaves the employer. The recipient will not be restricted in a course of study that would be of particular benefit to the relevant employer or to the foundation.
3256  Section 4.10 of Rev. Proc. 80–39 provides a percentage test guideline. It states that in the case of a program that awards loans to children of employees of a particular employer, the program meets the percentage test if either of the following tests is met: (1) the number of loans awarded under that program in any year to such children does not exceed 25 percent of the number of employees’ children who were (i) eligible, (ii) were applicants for such loans, and (iii) were considered by the selection committee in selecting the recipients of loans in that year, or (2) the number of loans awarded under the program in any year to such children does not exceed 10 percent of the number of
3257
(Selective) 		employees’ children who can be shown to be eligible for loans (whether or not they submitted an application) in that year.
   You have agreed that your program will meet the requirements of either the 25 percent or 10 percent percentage test of Section 4.10 applicable to a program that awards loans to children of employees of a particular employer. You should be maintained to show that you meet the applicable percentage test of Section 4.10.
   This ruling is issued with the understanding that in applying the 10 per-
3258 cent test applicable to employees’ children set forth in Rev. Proc. 80–39, you will only include as eligible those children who meet the eligibility standards described in Rev. Proc. 85–51, 1985–2 C.B. 717.
(Selective)  This ruling will remain in effect as long as the procedures in awarding loans under your program remain in compliance with Sections 4.03 through 4.10 of Rev. Proc. 80–39. If you enter into any other program covering the same individuals, the percentage test of Rev. Proc. 80–39 must be met in the aggregate.
3260
(Selective) 		 We considered your grant-making procedures under section 4945(g) of the Internal Revenue Code. Based on the information submitted and assuming your scholarship and loan programs will be conducted as proposed with objectivity and nondiscrimination in the awarding of grants and loans, we determined that your procedures in the awarding of scholarship grants and educational loans comply with the requirements in sections 4945(g)(1) and 4945(g)(3) and that scholarships and loans granted according to these procedures will not be "taxable expenditures" within the meaning of section 4945(d)(3).
3261
(Selective) 		 This determination is conditioned on the understanding that there will be no material change in the facts upon which it is based. It is further conditioned on the premises that no grants or loans will be awarded to the trust’s creators, trustees, or members of the selection committee, or for a purpose that is inconsistent with the purposes described in section 170(c)(2)(B). The approval of your grant-making procedures is a one-time approval of your system of standards and procedures that will result in grants and loans
3262 which meet the requirements of section 4945(g)(1) and 4945(g)(3). Thus, approval will apply to succeeding grant and loan programs only as long as the standards and procedures under which they are conducted do not differ materially from those described in your request.
(Selective)  We have not considered whether grants made under your procedures are excludable from the gross income of recipients under section 117(a) of the Code. Any funds you distribute to individuals must be made on a true charitable
3263
(Selective) 		basis in furtherance of the purposes for which you are organized. Therefore, you should maintain adequate records and case histories so that any or all grant and loan distributions can be substantiated upon request by the Internal Revenue Service.
3265
(Selective) 		 Rev. Proc. 76–47, 1976–2 C.B. 670, sets forth guidelines to be used in determining whether a grant made by a private foundation under an employer-related program to a child of an employee of the particular employer to which the program relates is a scholarship grant that meets the provisions of section 117(a) of the Code (as that section read before the Tax Reform Act of 1986). Rev. Proc. 80–39, 1980–2 C.B. 772, sets forth guidelines to be used in determining whether educational loans made by a private foundation under an employer-related program to a child of an employee of the particular employer to which the program relates are taxable expenditures under section 4945 of the
3266
(Selective) 		Code. The Service will assume that scholarship or fellowship grants will meet the provisions of section 117(a) (as that section read before the Tax Reform Act of 1986) if a private foundation’s program satisfies the seven conditions set forth in Sections 4.01 through 4.07 and meets the percentage test described in Section 4.08 of Rev. Proc. 76–47. The Service will also assume that educational loans are not taxable expenditures if a private foundation’s program satisfies the seven conditions set forth in Sections 4.03 through 4.09 and meets the percentage test described in section 4.10 of Rev. Proc. 80–39. You have agreed that procedures in awarding grants and loans under your
3267
(Selective) 		program will be in compliance with Sections 4.01 through 4.07 of Rev. Proc. 76–47 (without regard to the amendments to section 117(a) made by the Tax Reform Act of 1986), and Sections 4.03 through 4.09 of Rev. Proc. 80–39, respectively. In particular, the selection of individual grant or loan recipients will be made by a selection committee the members of which are totally independent and separate from the private foundation, the foundation’s creator, and the relevant employer. The grants or loans will not be used as a means of inducement to recruit employees nor will a grant or loan be terminated if the
3268 employee leaves the employer. The recipient will not be restricted in a course of study that would be of particular benefit to the relevant employer or to the foundation.
  Section 4.08 of Rev. Proc. 76–47 and Section 4.10 of Rev. Proc. 80–39 provide a percentage test guideline. They state that in the case of a program that awards grants or loans to children of employees of a particular employer, the program meets the percentage test if either of the following tests is met:
(Selective) (1) the number of grants or loans awarded under the program in any year to such children does not exceed 25 percent of the number of employees’ children who
3269
(Selective) 		(i) were eligible, (ii) were applicants for such grants or loans, and (iii) were considered by the selection committee in selecting the recipients of grants or loans in that year, or (2) the number of grants or loans awarded under the program in any year to such children does not exceed 10 percent of the number of employees’ children who can be shown to be eligible for grants or loans (whether or not they submitted an application) in that year. Section 4.10 of Rev. Proc. 80–39 provides that if a private foundation’s employer-related program encompasses educational loans and scholarship or fellowship grants to the same group of eligible employees’ children, the percentage tests in Section 4.10 apply to the total number of individuals receiving combined
3270 grants of scholarships, fellowships, and educational loans
(Selective)  You have agreed that your program will meet the requirement of either the 25 percent or 10 percent percentage test of Section 4.08 of Rev. Proc. 76–47 and Section 4.10 of Rev. Proc. 80–39 applicable to a program that awards grants and loans, respectively, to children of employees of a particular employer. Records should be maintained to show that you meet the applicable percentage test of Section 4.08 or 4.10.
3271  This ruling is issued with the understanding that in applying the 10 percent test applicable to employees’ children set forth in Rev. Procs. 76–47 and 80–39, you will include as eligible only those children who meet the eligibility standards described in Rev. Proc. 85–51, 1985–2 C.B. 717.
(Selective)  This ruling will remain in effect as long as the procedures in awarding grants and loans under your programs remain in compliance with Sections 4.01 through 4.08 of Rev. Proc. 76–47 (without regard to the amendments to section 117(a) made by the Tax Reform Act of 1986), and Section 4.08 through 4.10 of
3272
(Selective) 		 Rev. Proc. 80–39, respectively. If you enter into any other program covering the same individuals, the percentage test of Rev. Procs. 76–47 and 80–39 must be met in the aggregate.
3341
(Selective) 		 If you do not agree with our determination, you may request consideration of the matter by the Office of Regional Director of Appeals. To do this you should file a written appeal as explained in the enclosed Publication 892. Your appeal should give the facts, law, and any other information to support your position. If you want a hearing, please request it when you file your appeal and you will be contacted to arrange a date. The hearing may be held at the regional office, or, if you request, at any mutually convenient district office. If you will be represented by someone who is not one of your principal officers, that person will need to file a power of attorney or tax
3342
(Selective) 		information authorization with us.
3343
(Selective) 		 If you do not appeal this determination within 30 days from the date of this letter, as explained in Publication 892, this letter will become our final determination on this matter. Further, if you do not appeal this determination within the time provided, it will be considered by the Internal Revenue Service as a failure to exhaust available administrative remedies. Section 7428(b)(2) of the Internal Revenue Code provides, in part, that, "A declaratory judgment or decree under this section shall not be issued in any proceeding unless the Tax Court, the Claims Court, or the district court of the United States for the District of Columbia determines that the organization involved has exhausted administrative
3344
(Selective) 		remedies available to it within the Internal Revenue Service."
5997
(Automatic) 		 If we have indicated 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 resolve any questions about your exempt status and foundation status, you should keep it in your permanent records.
5998
(Selective) 		 We have sent a copy of this letter to your representative as indicated in your power of attorney.
5999  If you have any questions, please contact the person whose name and telephone number are shown in the heading of this letter.
(Automatic) Sincerely yours,
8500
(Automatic) 		Director, Exempt Organizations
8010
(Required) 		Accounting Period Ending:
[20V]
8011
(Required) 		Addendum Applies:
[20V]
8610
(Selective) 		Enclosure:
Addendum

Exhibit 7.21.5-22  (01-01-2003)
Letter 1077 (DO/CG)
EO Favorable Determination Letter on Private Operating Foundation Status After 4653

EDS
Paragraph
Numbers 		Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Automatic) 		 This modifies our letter to you in which we classified you as a private foundation but had not considered whether you qualify as an operating private foundation.
 3
(Automatic) 		 Based on additional information you furnished, and the assumption that your operations will be as you have stated, we have now classified you as an operating foundation as defined in section 4942(j)(3) of the Internal Revenue Code. We also confirm your classification as a private foundation within the meaning of section 509(a) of the Code. Your exempt status under section 501(a) of the Code as an organization described in section 501(c)(3) is still in effect.
 5
(Automatic) 		 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 your 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.
 7
(Automatic) 		 If we have indicated 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 resolve any questions about your private foundation status, please keep it in your permanent records.
5998
(Selective) 		 We have sent a copy of this letter to your representative as indicated in your power of attorney.
5999  If you have any questions, please contact the person whose name and telephone number are shown above.
(Automatic) Sincerely yours,
8500
(Automatic) 		Director, Exempt Organizations
8010
(Required) 		Our Letter Dated:
[20V]
8011
(Required) 		Addendum Applies:
[20V]
8610
(Selective) 		Enclosure:
Addendum

Exhibit 7.21.5-23  (01-01-2003)
Letter 1078 (DO/CG)
EO Favorable Determination Letter on Foundation Status

EDS
Paragraph
Numbers 		Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Automatic) 		 Based on the information you recently submitted, we have classified your organization as one that is not a private foundation within the meaning of section 509(a) of the Internal Revenue Code because you are described in
 2
(Selective) 		sections 509(a)(1) and 170(b)(1)(A)(i).
 3
(Selective) 		sections 509(a)(1) and 170(b)(1)(A)(ii).
 4
(Selective) 		sections 509(a)(1) and 170(b)(1)(A)(iii).
 5
(Selective) 		sections 509(a)(1) and 170(b)(1)(A)(iv).
 6
(Selective) 		sections 509(a)(1) and 170(b)(1)(A)(v).
 7
(Selective) 		sections 509(a)(1) and 170(b)(1)(A)(vi).
 8
(Selective) 		section 509(a)(2).
 9
(Selective) 		section 509(a)(3).
 10
(Selective) 		section 509(a)(4).
 12
(Automatic) 		 Your exempt status under section 501(a) of the Internal Revenue Code as an organization described in 501(c)(3) is still in effect.
 14
(Required) 		 This classification is based on the assumption that your operations will continue as you have stated. 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 your exempt status and foundation status. This supersedes our letter dated [20V].
 16
(Required) 		 Grantors and contributors may rely on this determination unless the Internal Revenue Service publishes notice to the contrary. However, if you lose your section 509(a)([1V]) 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)([1V]) organization.
3332
(Selective) 		 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).
3337
(Selective) 		 You are required to file Form 990 only if your gross receipts each year are normally more than $25,000. For guidance in determining whether your gross receipts are "normally" more than $25,000, see the instructions for Form 990. 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
3338
(Selective) 		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.
3339
(Selective) 		 You are required to make your annual return available for public inspection for three years after the return is due. You are also required to make available a copy of your exemption application, any supporting documents, and this exemption letter. Failure to make these documents available for public inspection may subject you to a penalty of $20 per day for each day there is a failure to comply (up to a maximum of $10,000 in the case of an annual return).
5997
(Automatic) 		 If we have indicated 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 resolve any questions about your private foundation status, you should keep it in your permanent records.
5998
(Selective) 		 We have sent a copy of this letter to your representative as indicated in your power of attorney.
5999  If you have any questions, please contact the person whose name and telephone number are shown above.
(Automatic) Sincerely yours,
8500
(Automatic) 		Director, Exempt Organizations
8010
(Required) 		Addendum Applies:
[20V]
8610
(Selective) 		Enclosure:
Addendum

Exhibit 7.21.5-24  (01-01-2003)
Letter 1079 (DO/CG)
EO Favorable Determination Letter 501(c)(3) Status — Adverse on Foundation Status

EDS
Paragraph
Numbers 		Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Automatic) 		 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 income tax under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3).
 3  We have further determined that, based on the information supplied in your application, you are a private foundation within the meaning of section 509(a) of the Code. The basis for this determination is shown in the enclosed Form 5795. In this letter we are not determining whether you are an operating foundation described in section 4942(j)(3).
(Automatic)  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 your exempt status and foundation status. In the case of an amend-
 5 ment 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.
(Automatic)  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). However, since you are a private foundation, you are subject to excise taxes under Chapter 42 of the Code. You also may be subject to other Federal excise
 7 taxes. If you have any questions about excise, employment, or other Federal taxes, please let us know.
(Automatic)  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 sections 2055, 2106, and 2522 of the Code.
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(Automatic) 		 You are required to file Form 990–PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as a Private Foundation. Form 990–PF 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
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(Automatic) 		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.
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(Automatic) 		 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.
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(Automatic) 		 You are required to make your annual return available for public inspection within 180 days after the date of publication of its availability and you must publish the notice of availability no later than the date required for filing the return. You are also required to make available a copy of your exemption application, any supporting documents, and this exemption letter. Failure to make these documents available for public inspection may subject you to a penalty of $20 per day for each day there is a failure to comply (up to a maximum of $10,000 in the case of an annual return).
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(Automatic) 		 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.
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(Automatic) 		 If you do not agree with our determination that you are a private foundation, you may request consideration of this matter by the Office of Regional Director of Appeals. To do this you should file a written appeal as explained in the enclosed Publication 892. Your appeal should give the facts, law, and any other information to support your position. If you want a hearing, please request it when you file your appeal and you will be contacted to arrange a date. The hearing may be held at the regional office, or, if you request, at any mutually convenient district office. If you will be represented by someone who is not one of your principal officers, that person will need to file a
 17 power of attorney or tax information authorization with us.
   If you do not appeal this determination on your private foundation status within 30 days from the date of this letter, as explained in Publication 892, this letter will become our final determination on this matter. Further, if you do not appeal this determination within the time provided, it will be considered by the Internal Revenue Service as a failure to exhaust available administrative remedies. Section 7428(b)(2) of the Code provides, in part, that, "A declaratory judgment or decree under this section shall not be issued in any proceeding unless the Tax Court, the Claims Court, or the district court of the
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(Automatic) 		 United States for the District of Columbia determines that the organization involved has exhausted administrative remedies available to it within the Internal Revenue Service."
3223
(Selective) 		 Based on information you supplied, we recognize you as exempt from Federal income tax for the period [20V], your formation or incorporation
3224
(Selective) 		date, to [20V], your dissolution date. You are not required to file Federal income tax returns for that period.
3239  We considered your grant-making procedures under section 4945(g) of the Code. Based on the information submitted and assuming your scholarship program will be conducted as proposed with objectivity and nondiscrimination in awarding grants, we determined that your procedures in awarding scholarship grants comply with the requirements of section 4945(g)(1),and that scholarships granted according to these procedures will not be "taxable expenditures" within the meaning of section 4945(d)(3).
(Selective)  This determination is conditioned on the understanding that there will be
3240 no material change in the facts upon which it is based. It is further conditioned on the premise that no grants will be awarded to the trust’s creators, trustees, or members of the selection committee, or for a purpose that is inconsistent with the purposes described in section 170(c)(2)(B) of the Code.
(Selective) The approval of your grant-making procedures is a one-time approval of your system of standards and procedures that will result in grants that meet the requirements of section 4945(g)(1) of the Code. Thus, approval will apply to succeeding grant programs only as long as the standards and procedures under which they are conducted do not differ materially from those described in your
3241 request.