7.21.5  Letter Generation

7.21.5.1  (01-01-2003)
Overview

  1. Procedures are provided on the Letter Generation System and the options available to its users.

  2. Most letters and paragraphs approved for nationwide use (to develop and close cases) are included on the letter text (It) file for the letter generation subsystem. The letter text file operates on the concept of letter and paragraph numbers.

  3. Each letter consists of one or more of the following four types of paragraphs:

    • Automatic paragraphs

    • Required paragraphs

    • Selective paragraphs

    • Customized paragraphs

7.21.5.2  (01-01-2003)
Specific Instructions

  1. These instructions are for the Exempt Organizations specialist preparing a letter to the applicant in response to information received, request for additional information or final determination.

7.21.5.2.1  (01-01-2003)
Automatic Paragraphs

  1. These paragraphs must be included in the letter and are automatically printed. They appear on the screen for reference and are not entered.

7.21.5.2.2  (01-01-2003)
Required Paragraphs

  1. These paragraphs must be included in the letter, the specialist must enter the paragraph number(s) on the Create-Letter-Screen and type in the appropriate variable information (fill-ins), which is limited to 20 characters of alpha-numeric data.

  2. Required paragraph numbers are automatically displayed at the bottom of the Create-Letter-Screen and the user can not complete the creation of the letter without entering these paragraphs.

7.21.5.2.3  (01-01-2003)
Selective Paragraphs

  1. These paragraphs are not required in the letter, the specialist must enter the appropriate number(s) on the Create-Letter-Screen. Some selective paragraphs are printed in the body of the letter (see letter exhibits).

  2. Paragraphs numbered in series 100 through 2999 and 7000 through 7999 are printed as an enclosure to the letter in the order entered on the Create-Letter-Screen.

    1. The system does not prompt the user in the use of these paragraphs. If a selected paragraph requires variable information, the user cannot complete the letter without entering data in the field next to the paragraph number on the Create-Letter-Screen.

    2. The variable entered is limited to 20 characters.

7.21.5.2.4  (01-01-2003)
Customized Paragraphs

  1. These are individually developed paragraphs that must be typed by the specialist. Customized paragraphs are printed as an enclosure to the letter in the order entered on the Create-Letter-Screen.

  2. To customize paragraphs, the specialist must enter paragraph number(s) in the range of 9000–9999.

    1. This will bring up the screen on which the customized paragraph is typed.

    2. These paragraphs are limited to ten lines of text with no more than 80 characters per line.

    3. The paragraphs can be connected by using consecutively numbered paragraphs (e.g., 9001, 9002, 9003, etc.).

    4. If space is desired between paragraphs, the first line of each paragraph must be blank with text starting on the second line. The system compensates for blank lines at the end of these paragraphs, so leaving a blank line at the end of paragraph 9000 (for example) will not create a space between paragraphs 9000 and 9001.

7.21.5.3  (01-01-2003)
Letter Text

  1. Each area office is allotted ten (10) paragraphs on the letter text for EO development letters to advise applicants where to send the requested information. This feature is intended to promote prompt association of responses with case files by directing the mail to the specific group or post of duty address.

  2. These paragraphs are numbered from 3000 to 3099 and are either automatic or selective paragraphs, which are printed in the body of the letter.

  3. The area office will add the language within the parameters on the letter text and provide the users with the numbers that are appropriate for the addresses added to the text.

  4. The language which must be used for each paragraph added is as follows:

    Please mail the information requested in this letter to the following address....”

  5. The letter text file also provides space for up to 1,000 additional paragraphs per letter number (paragraphs 7,000 through 7,999) which can be included, by selection, in the letters on the letter text file.

    1. This feature is designed to accommodate the current IRM provisions which allow area offices to print up to four months supply of letters and use them while simultaneously requesting Headquarters approval of the language.

    2. These paragraphs are also printed on an enclosure in the order entered on the Create-Letter Screen. The aea office must identifying the use for these paragraphs.

7.21.5.3.1  (01-01-2003)
Entity Information

  1. Entity information is automatically transferred from DTS to the letter generation subsystem. If entity information for a case is not present, it must be entered on the letter generation subsystem before a letter can be created for the entity. See instructions in the Exempt Organizations EDS User Manual.

7.21.5.3.2  (01-01-2003)
Signature

  1. All letters must contain a signature. Rubber (facsimile) stamps may be used for closing letters, which in most instances must be issued with the signature of the Director, Exempt Organizations.

7.21.5.4  (01-01-2003)
Development Letters

  1. In developing EO cases, the nature of the case dictates the letter to be used for requesting additional information. Before creating the letter, the user must follow the instructions in the Exempt Organizations EDS User Manual for creating or accessing the entity information.

7.21.5.4.1  (01-01-2003)
Letters for Open Cases

  1. For open cases, the appropriate letters are as follows:

    1. Letter 1312(DO/CG) — First request for additional information for cases received on Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.

    2. Letter 1313(DO/CG) — First request for additional information for cases received on Form 1024, Application for Recognition of Exemption Under Section 501(a) or Determination Under Section 120.

    3. Letter 2386(DO/CG) — First request for additional information for cases received on Form 1028, Application for Recognition of Exemption Under Section 521 of the Internal Revenue Code.

    4. Letter 2384(DO/CG) — First request for additional information for IRC 501(c)(9) organizations.

    5. Letter 2382(DO/CG) — Second and subsequent requests for additional information. Can be used with any type of application when the response to the first request for information is inadequate.

    6. Letter 1209(DO/CG) — Development letter to organizations applying under incorrect code section.

7.21.5.4.2  (01-01-2003)
Follow-up Letters

  1. For follow-up action on existing organizations, the appropriate letters are as follows:

    1. Letter 1046(DO/CG) — follow-up after an advance ruling of foundation status;

    2. Letter 2381(DO/CG) — amendment, legal entities, and,

    3. Letter 1037(DO/CG) — development letter concerning possible termination.

7.21.5.4.3  (01-01-2003)
Pattern Paragraphs

  1. Pattern paragraphs covering a large number of issues are available in the series 100 through 2999. If there is no appropriate computerized paragraph, or if there is a need to expand on a computerized paragraph, the specialist must type (customize) the appropriate 9000 series paragraph.

  2. Because the paragraphs will print in the order in which they are entered on the Create-Letter-Screen, 9000 paragraphs can also be used to expand on computerized paragraphs in series 100 through 2999 and 7000 through 7999. See Section 5.2.4, above, and the Exempt Organizations EDS User Manual for specific instructions on the use of 9000 series paragraphs.

7.21.5.4.4  (01-01-2003)
Other EO Letters

  1. Other EO letters can be created through the letter generation subsystem. The letters, with instructions, are included in this Manual as exhibits. A complete list of the letters, by description, letter numbers and exhibit numbers are reflected in Exhibit 7.21.5–1.

  2. The letter is printed in two parts; the cover letter and the enclosure. Paragraphs specifying the information needed will be printed after the enclosure.

Exhibit 7.21.5-1  (01-01-2003)
Computer Generated (DO/CG) Letters

Description Letter Number Exhibit Number
Favorable letter 501(c)(3) and 509(a)(1), [including 170(b)(1)(A)(i) through (vi)], 509(a)(2), or 509(a)(3). 947(DO/CG) 7.21.5-2
Favorable letter all paragraphs of 501(c) except (3). 948(DO/CG) 7.21.5-3
Favorable letter for Farmers’ Cooperative under 521. 949(DO/CG) 7.21.5-4
Reinstatement of exempt status. 974(DO/CG) 7.21.5-5
Notice to parent organization when subordinate is terminated. 975(DO/CG) 7.21.5-6
Approval of amendments/change in operation. 976(DO/CG) 7.21.5-7
Development letter after organization files a return. 993(DO/CG) 7.21.5-8
Acknowledgment of receipt of application/notice of referral to Headquarters. 996(DO/CG) 7.21.5-9
Notice of income tax filing requirement after no response to prior Letter 993(DO/CG) 1034(DO/CG) 7.21.5–10
Follow-up on request for verification of exemption or filing of application. 1035(DO/CG) 7.21.5-11
Development—possible termination. 1037(DO/CG) 7.21.5-12
Incomplete Letter 1042(DO/CG) 7.21.5-13
Favorable letter 501(c)(3) and advance ruling on foundation status under 509(a). 1045(DO/CG) 7.21.5-14
Follow-up after expiration of advance ruling given by 1045 (DO/CG) letter. 1046(DO/CG) 7.21.5-15
Presumption of private foundation status after no response to follow-up 1046(DO/CG). 1048(DO/CG) 7.21.5-16
Favorable letter on foundation status—509(a)(1), 509(a)(2), or 509(a)(3) after response to follow-up 1046(DO/CG). 1050(DO/CG) 7.21.5-17
Favorable letter under 501(c)(3) and advance ruling on foundation status; org. not eligible for a definitive ruling. 1051(DO/CG) 7.21.5-18
Favorable letter under 509(a)(3) for a NECT 1071(DO/CG) 7.21.5–19
Favorable letter of private operating foundation under 4942(j)(3) 1075(DO/CG) 7.21.5.20
Favorable letter of non-operating private foundation. 1076(DO/CG) 7.21.5.21
Favorable letter of private operating foundation status under 4942(j)(3) after receipt of Form 4653. 1077(DO/CG) 7.21.5-22
Favorable letter of non-private foundation status under 509(a)(1), 509(a)(2), or 509(a)(3) after presumption of PF status or receipt of Form 4653. 1078(DO/CG) 7.21.5-23
Favorable letter under 501(c)(3) and adverse ruling on foundation status; org. is a PF. 1079(DO/CG) 7.21.5-24
Favorable letter under 501(c)(3) and adverse ruling on 4942(j)(3) status. 1080(DO/CG) 7.21.5-25
Favorable letter under 501(c)(3) and presumption of PF status after no response. 1081(DO/CG) 7.21.5-26
Notice of transfer of case to correct KD. 1160(DO/CG) 7.21.5-27
Favorable letter under 501(c)(3) for org. with IRC 508(a) effective date problem. 1194(DO/CG) 7.21.5-28
Development-org. is already exempt or under a group ruling. 1308(DO/CG) 7.21.5-29
Development-organization applying under incorrect section of IRC. 1309(DO/CG) 7.21.5-30
Proposed adverse —no response to Letter 1309(DO/CG) 1310(DO/CG) 7.21.5-31
Development letter for EO applications on Form 1023 1312(DO/CG) 7.21.5-32
Development letter for EO applications on Form 1024 1313(DO/CG) 7.21.5-33
Failure to establish exempt status adverse—501(c)(3) after no response to Letter 1312(DO/CG) 1314(DO/CG) 7.21.5-31
Failure to establish exempt status adverse—501(c) [except (3)] after no response to Letter 1313(DO/CG) or Letter 2384(DO/CG) 1315(DO/CG) 7.21.5-32
Proposed adverse letter (denial) after no response 1316(DO/CG) 7.21.5-33
Technical Advice Request Notice to Taxpayer 1399(DO/CG) 7.21.5-34
Modification letter extending an initial 2 or 3 year advance ruling period under 509(a) to 5 years 2171(DO/CG) 7.21.5-35
Modification letter of foundation status from IRC 509(a)(2) to 509(a)(2) 2240(DO/CG) 7.21.5-36
Private Foundation determination letter after advance ruling period ends 2241(DO/CG) 7.21.5-37
Termination letter 2242(DO/CG) 7.21.5-38
Private Foundation determination letter after no public support during advance ruling 2243(DO/CG) 7.21.5-39
Withdrawal letter 2244(DO/CG) 7.21.5-43
Advance ruling under IRC 507(b)(1)(B)—Termination of Private Foundation status 2245(DO/CG) 7.21.5-44
Favorable determination letter for 501(c)(9), (17), or (20) Organization with 505(c) effective date problem 2285(DO/CG) 7.21.5-45
Letter granting extension of time to submit info (User Fees) 2337(DO/CG) 7.21.5-46
Amendment—Legal Entities letter 2381(DO/CG) 7.21.5-47
Second request for additional information 2382(DO/CG) 7.21.5-48
Second request for additional information to Letter 1046 2383(DO/CG) 7.21.5-49
501(c)(9) Development letter 2384(DO/CG) 7.21.5-50
Failure to establish exempt status adverse—521 after no response to Letter 2386(DO/CG) 2385(DO/CG) 7.21.5-51
Development letter for EO applications on Form 1028 2386(DO/CG) 7.21.5-52
EO paragraphs for Group Exemptions 2419 (DO/CG) 7.21.5-53
EO Failure to Establish—Adverse letter 501(c)(3)—Church 2435(DO/CG) 7.21.5-54

Exhibit 7.21.5-2  (01-01-2003)
Letter 947 (DO/CG)
EO Favorable Determination Letter 501(c)(3)/509(a)(1)–(4)

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).
 2
(Selective)
 We have further determined that you are not a private foundation within the meaning of section 509(a) of the Code, because you are an organization described in sections 509(a)(1) and 170(b)(1)(A)(i).
 3
(Selective)
 We have further determined that you are not a private foundation within the meaning of section 509(a) of the Code, because you are an organization described in sections 509(a)(1) and 170(b)(1)(A)(ii).
 4
(Selective)
 We have further determined that you are not a private foundation within the meaning of section 509(a) of the Code, because you are an organization described in sections 509(a)(1) and 170(b)(1)(A)(iii).
 5
(Selective)
 We have further determined that you are not a private foundation within the meaning of section 509(a) of the Code, because you are an organization described in sections 509(a)(1) and 170(b)(1)(A)(iv).
 6
(Selective)
 We have further determined that you are not a private foundation within the meaning of section 509(a) of the Code, because you are an organization described in sections 509(a)(1) and 170(b)(1)(A)(v).
 7
(Selective)
 We have further determined that you are not a private foundation within the meaning of section 509(a) of the Code, because you are an organization described in sections 509(a)(1) and 170(b)(1)(A)(vi).
 8
(Selective)
 We have further determined that you are not a private foundation within the meaning of section 509(a) of the Code, because you are an organization described in section 509(a)(2).
 9
(Selective)
 We have further determined that you are not a private foundation within the meaning of section 509(a) of the Code, because you are an organization described in section 509(a)(3).
 10
(Selective)
 We have further determined that you are not a private foundation within the meaning of section 509(a) of the Code, because you are an organization described in section 509(a)(4).
 13
(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.
 14
(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. This does not apply, however, if you make or have made a timely election under section 3121(w) of the Code to be exempt from such tax. You are not liable for the tax imposed under the Federal Unemployment Tax Act (FUTA).
 15
(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).
 17
(Automatic)
 Since you are not a private foundation, you are not subject to the excise taxes under Chapter 42 of the Code. However, if you are involved in an excess benefit transaction, that transaction might be subject to the excise taxes of section 4958. Additionally, you are not automatically exempt from other federal excise taxes. If you have any questions about excise, employment, or other Federal taxes, please contact your key district office.
 18
(Selective)
 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)(^) 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)(^) organization.
 19
(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 Code sections 2055, 2106, and 2522.
 20
(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.
 21
(Automatic)
 In the heading of this letter we have indicated whether you must file Form 990, Return of Organization Exempt From Income Tax. If Yes is indicated, you are required to file Form 990 only if your gross receipts each year are normally more than $25,000. However, if you receive a Form 990 package in the mail, please file the return even if you do not exceed the gross receipts test. If you are not required to file, simply attach the label provided, check the box in the heading to indicate that your annual gross receipts are normally $25,000 or less, and sign the return.
 22
(Automatic)
 If a return is required, it must be filed by the 15th day of the fifth month after the end of your annual accounting period. A penalty of $20 a day is charged when a return is filed late, unless there is reasonable cause for the delay. However, the maximum penalty charged cannot exceed $10,000 or 5 percent of your gross receipts for the year, whichever is less. For organizations with gross receipts exceeding $1,000,000 in any year, the penalty is $100 per day per return, unless there is reasonable cause for the delay. The maximum penalty for an organization with gross receipts exceeding $1,000,000 shall not exceed $50,000. This penalty may also be charged if a
 23
(Automatic)
return is not complete, so be sure your return is complete before you file it.
 24
(Automatic)
 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).
 25
(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.
 26
(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.
ADDITIONAL PARAGRAPHS
3201
(Selective)
 Revenue Procedure 75–50, published in Cumulative Bulletin 1975–2 on page 587, sets forth guidelines and record keeping requirements for determining whether private schools have racially nondiscriminatory policies as to students. You must comply with this revenue procedure to maintain your tax-exempt status.
3203
(Selective)
 You claimed to be an organization described in section 509(a)(1). The information you submitted, however, indicates that you receive a substantial part of your support in the form of gross receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, and from membership dues, gifts, grants, and contributions. Therefore, we have classified you as an organization described in section 509(a)(2) of the Code.
3205
(Selective)
 You claimed to be an organization described in section 509(a)(2). The information you submitted, however, indicates that you receive a substantial part of your support in the form of gifts, grants, and contributions from the general public and/or from governmental units. Therefore, we have classified you as an organization described in sections 509(a)(1) and 170(b)(1)(A)(vi) of the Code.
3206
(Selective)
 This ruling is based on the understanding that the majority of your Board of Directors will be non-salaried and will not be related to salaried personnel or to parties providing services. It is also based on the understanding that salaried individuals cannot vote on their own compensation and that compensation decisions will be made by the board.
3207
(Selective)
 This ruling is based on the understanding that you will enter a formal agreement with the state regulatory agency to operate as a provider under the Special Nutrition Food Program and to operate that program within the state’s guidelines.
3208
(Selective)
 As part of a continuing program, we periodically examine the operations of tax-exempt organizations. The purpose of this program is to determine whether the organizations are operating within the scope of the laws under which they are granted exemption. Therefore, you should keep information that would show that you are operating for section 501(c)(3) purposes. The information should include the training given to the child care providers, number of inspections, reports submitted to the state, and other pertinent information about your activities. You should also keep records of your income and your disbursements of funds.
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. This notice is filed by submitting a properly completed and signed 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) apply 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 keep records to show that funds are expended only for those purposes. If you distribute funds to other organizations, your records should show whether they are exempt under section 501(c)(3). In cases where the recipient organization is not exempt under section 501(c)(3), there should be evidence that the funds will remain dedicated to the required purposes and that they will be used for those purposes by the recipient.
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 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. This section establishes ceiling amounts for lobbying expenditures.
3277  If you are a wholly-owned instrumentality of a state or a political subdivision of a state, wages paid for services performed for you are not subject to unemployment taxes under the Federal Unemployment Tax Act (FUTA) or to any portion of the social security taxes under the Federal Insurance Contributions Act (FICA). Wages of your employees hired after March 31, 1986 are subject to only the medicare portion of the social security tax. If you want full social security coverage for your employees, it may be obtained only by an agreement under section 218 of the Social Security Act between the state and the Secretary of Health and Human Services.
3278
(Selective)
 Any questions you may have concerning your liability for FICA or FUTA taxes should be addressed to the Internal Revenue Service, Office of the Associate Chief Counsel (Employee Benefits and Exempt Organizations), CC:EBEO, Room 5213, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 200044.
3341
(Selective)
 If you do not agree with our determination, 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 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 Code provides, in part, that, “A declaratory judgement 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.”
3345
(Selective)
 If you do not appeal this determination of the effective date of exemption within 30 days from the date of this letter, 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 judgement 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 remedies available to it within the Internal Revenue Service."
3347
(Selective)
 No further appeal is available within the Internal Revenue Service on the denial of your request for retroactive relief under section 1.9100 of the regulations regarding the effective date of your exemption. You may still take advantage, however, of the declaratory judgment rights as described in the enclosed Publication 892.
7750
(Selective)
 You are not subject to the specific publishing requirements of Revenue Procedure 75-50, 1975-2 C.B., page 587, as long as you are operating under a contract with the local government. If your method of operation changes to the extent that your charter is terminated, cancelled, or not renewed, you should notify us. You will also be required to comply with Revenue Procedure 75-50.
7751
(Selective)
 You are not subject to the specific publishing requirements of Revenue Procedure 75-50, 1975-2 C.B., page 587, as long as you are operating under a contract with the local government. If your method of operation changes to the extent that your charter is terminated, not approved, cancelled, or not renewed, you should notify us. You will also be required to comply with Revenue Procedure 75-50.
3348
(Selective)
 If you agree with the determination, please sign and return the enclosed Form 6018 as soon as possible.
5997
(Automatic)
 If we have indicated in the heading of this letter that an addendum applies, the enclosed addendum is an integral part of this letter. Because this letter could help resolve any questions about your exempt status and foundation status, you should keep it in your permanent records.
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)
Form 990 Required:
[20 V]
8012
(Required)
Addendum Applies:
[20V]
8610
(Selective)
Enclosure(s):
8620
(Selective)
Form 6018
8630
(Selective)
Addendum

Exhibit 7.21.5-3  (01-01-2003)
Letter 948 (DO/CG)
EO Favorable Determination Letter All 501(c) Except (3)

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 the section indicated above.
 3
(Automatic)
 Unless specifically excepted, you are liable for taxes under the Federal Insurance Contributions Act (social security taxes) for each employee to whom you pay $100 or more during a calendar year. And, unless excepted, you are also liable for tax under the Federal Unemployment Tax Act for each employee to whom you pay $50 or more during a calendar quarter if, during the current or preceding calendar year, you had one or more employees at any time in each of 20 calendar weeks or you paid wages of $1,500 or more in any calendar quarter. If you have any questions about excise, employment, or other Federal taxes, please address them to this office.
 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. 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)
 In the heading of this letter we have indicated whether you must file Form 990, Return of Organization Exempt From Income Tax. If Yes is indicated, you are required to file Form 990 only if your gross receipts each year are normally more than $25,000. However, if you receive a Form 990 package in the mail, please file the return even if you do not exceed the gross receipts test. If you are not required to file, simply attach the label provided, check the box in the heading to indicate that your annual gross receipts are normally $25,000 or less, and sign the return.
 8
(Automatic)
 If a return is required, it must be filed by the 15th day of the fifth month after the end of your annual accounting period. A penalty of $20 a day is charged when a return is filed late, unless there is reasonable cause for the delay. However, the maximum penalty charged cannot exceed $10,000 or 5 percent of your gross receipts for the year, whichever is less. For organizations with gross receipts exceeding $1,000,000 in any year, the penalty is $100 per day per return, unless there is reasonable cause for the delay. The maximum penalty for an organization with gross receipts exceeding $1,000,000 shall not exceed $50,000. This penalty may also be charged if a
 9
(Automatic)
return is not complete, so please be sure your return is complete before you file it.
 10
(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.
 11
(Automatic)
 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 each day there is a failure to comply (up to a maximum of $10,000 in the case of an annual return).
 12
(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.
101
(Selective)
 This ruling is conditioned on your compliance with section 89(k) of the Code. Specifically, you are required to have a written document that contains all provisions relating to an employee’s right to participate in and benefit under the plan. Other documents, summary plan descriptions or insurance policies, may be incorporated by reference but must be specifically identified. In order for your benefits to be considered legally enforceable, they must be so described in your written document to show that their amounts and circumstances under which they are received are definitely determinable and are not subject to the discretion of the employer. Your plan document is deficient because:
 103
(Selective)
 Please submit a copy of a revised plan document that fully complies with section 89(k) to the address shown in the heading of this letter by December 31, 1990.
 105
(Selective)
 We note that your present eligibility requirements could, in the future, result in a finding of discrimination and thereby jeopardize your exemption. For example, section 89(h) of the Code would only allow the exclusion of employees who have not completed one year of service (or in the case of core benefits under a health plan, 6 months of service) in testing for discrimination under section 505(b)(1), whereas your plan excludes:
106
(Selective)
 We note that your present eligibility requirements could, in the future, result in a finding of discrimination and thereby jeopardize your exemption. For example, section 89(h) of the Code would only allow the exclusion of employees who normally work less than 17 1/2 hours per week in testing for discrimination under section 505(b)(1), whereas your plan excludes:
107
(Selective)
 We note that your present eligibility requirements could, in the future, result in a finding of discrimination and thereby jeopardize your exemption. For example, section 89(h) of the Code would only allow the exclusion of employees who normally work during not more than 6 months during any year in testing for discrimination under section 505(b)(1), whereas your plan excludes:
108
(Selective)
 We note that your present eligibility requirements could, in the future, result in a finding of discrimination and thereby jeopardize your exemption. For example, section 89(h) of the Code would only allow the exclusion of employees who have not attained age 21 in testing for discrimination under section 505(b)(1), whereas your plan excludes:
3206
(Selective)
 This ruling is based on the understanding that the majority of your Board of Directors will be non-salaried and will not be related to salaried personnel or to parties providing services. It is also based on the understanding that salaried individuals cannot vote on their own compensation and that compensation decisions will be made by the board.
3207
(Selective)
 This ruling is based on the understanding that you will enter a formal agreement with the state regulatory agency to operate as a provider under the Special Nutrition Food Program and to operate that program within the state’s guidelines.
3208
(Selective)
 As part of a continuing program, we periodically examine the operations of tax-exempt organizations. The purpose of this program is to determine whether the organizations are operating within the scope of the laws under which they are granted exemption. Therefore, you should keep information that would show that you are operating for section 501(c)(3) purposes. The information should include the training given to the child care providers, number of inspections, reports submitted to the state, and other pertinent information about your activities. You should also keep records of your income and your disbursements of funds.
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.
3226
(Selective)
 Exemption under section 501(c)(4) is recognized as of [20V].
3227
(Selective)
your date of formation or incorporation, to [20V], the effective date of your exemption under section 501(c)(3).
3231
(Selective)
 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.
3277
(Selective)
 If you are a wholly-owned instrumentality of a state or a political subdivision of a state, wages paid for services performed for you are not subject to unemployment taxes under the Federal Unemployment Tax Act (FUTA) or to all portions of the social security taxes under the Federal Insurance Contributions Act (FICA). Wages of your employees hired after March 31, 1986 are subject to only the medicare portion of the social security tax. If you want full social security coverage for your employees, it may be obtained only by an agreement under section 218 of the Social Security Act between the state and the Secretary of Health and Human Services.
3301
(Selective)
 A section 501(c)(7) organization is permitted to receive up to 35 percent of its gross receipts, including investment income, from sources outside of its membership without losing its tax-exempt status. Of the 35 percent, not more than 15 percent of the gross receipts may be derived from the use of the club’s facilities or services by the general public. Income in excess of these limits may jeopardize your continued tax-exempt status.
3303
(Selective)
 Contributions or gifts to nonprofit volunteer fire companies for exclusively public purposes are deductible under section 170(c)(1) of the Code.
3305
(Selective)
 Section 170(c)(5) of the Code provides for the deduction for Federal income tax purposes of contributions to cemetery companies of the type described in section 501(c)(13). To be deductible, the contributions must be voluntary and must be made to or for the use of a nonprofit cemetery whose funds are irrevocably dedicated to the care of the cemetery as a whole. A donor may not deduct a contribution made for the perpetual care of a particular lot or crypt. Furthermore, payments made to a cemetery company as a part of the purchase price of a burial lot or crypt, even though irrevocably dedicated to the perpetual care of the cemetery as a whole, are not deductible.
3307
(Selective)
 Donors may not deduct contributions to you because you are not an organization described in section 170(c) of the Code. Under section 6113, any fundraising solicitation you make must include an express statement (in a conspicuous and easily recognizable format) that contributions or gifts to you are not deductible as charitable contributions for Federal income tax purposes. This provision does not apply, however, if your annual gross receipts are normally $100,000 or less, or if your solicitations are made to no more than ten persons during a calendar year. The law provides penalties for failure to comply with this requirement, unless failure is due to reasonable cause.
3309
(Selective)
 This ruling/determination is based on your representation that at least 75 percent of your members are past or present members of the Armed Forces of the United States defined under section 501(c)(19) of the Code. It is also based on your representation that substantially all of your other members, if any, are individuals who are cadets, or are spouses, widows, or widowers of past or present members of the Armed Forces of the United States or of cadets.
3311
(Selective)
 Based on your representation that at least 90 percent of your members are war veterans and that you are organized and operated primarily for purposes consistent with your current status as a war veterans organization, donors can deduct contributions made to or for the use of your organization.
3313
(Selective)
 If, in the future, your organization does not meet this membership test or if your purposes, character, or method of operation changes, donors cannot deduct contributions to or for the use of your organization, as provided by section 170. Please notify your key District Director of any such change so that office may consider the effect on the deductibility of contributions by these donors.
3319
(Selective)
 You will be recognized as exempt only in years when your receipts from members, for the purpose of meeting losses and expenses, are at least 85 percent of your total income.
3321
(Selective)
 Based on information you supplied, we recognize you as exempt from Federal income tax under section 501(c)(15) of the Internal Revenue Code for tax years when your gross receipts from interest, dividends, rents, royalties, and premiums (including deposits and assessments) do not exceed $150,000 ($350,000 for the tax years beginning after December 31, 1986.). If you have any questions about excise, employment, or other Federal taxes, your key District Director will be glad to answer them.
 You are not required to file Federal income tax returns as long as you do
3323
(Selective)
not change your organization’s character, purpose, or method of operation and a as long as this exemption remains in effect. You should report any changes, including name or address, to your key District Director. If your annual gross receipts are normally more than $25,000, you are required to file Form 990, Return of Organization Exempt From Income Tax, by the 15th day of the fifth month following the close of your annual accounting period.
3325
(Selective)
 Cash and noncash benefits realized by a person on account of your activities must be included in gross income to the extent provided in the Code. No opinion is expressed or implied as to whether there is any provision available under the Code to exclude from gross income contributions to you or payments made by you. Further, no opinion is expressed or implied as to whether you are liable for taxes under the Federal Insurance Contributions Act (social security taxes) or the Federal Unemployment Tax Act on the payment of benefits. If you have any questions about these matters, please contact your key district office.
3327
(Selective)
 No opinion is expressed or implied as to whether employer contributions to you are deductible under the Code.
3329
(Selective)
 This determination does not take into account the impact, if any, of Public Law 98–369, the Deficit Reduction Act of 1984.
3335
(Selective)
 We have concluded that your organization currently satisfies the requirement of sections 501(c)(9) and 505 of the Code. However, we have not considered whether your plan meets the nondiscrimination requirements of section 89.
3336
(Selective)
 Under the provisions of section 170 of the Code, donors may deduct contributions to you.
5997
(Automatic)
 If we have indicated in the heading of this letter that an addendum applies, the enclosed addendum is an integral part of this letter. Because this letter could help resolve any questions about your exempt status, 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)
Internal Revenue Code
Section 501(c)([2V])
8011
(Required)
Accounting Period Ending:
[20 V]
8012
(Required)
Form 990 Required:
[20V]
8013
(Required)
Addendum Applies:
[20V]
8610
(Selective)
Enclosure:
Addendum

Exhibit 7.21.5-4  (01-01-2003)
Letter 949 (DO/CG)
EO Favorable Determination Letter — Farmers’ Cooperative

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 exemption application, we have determined you are exempt from Federal income tax to the extent provided by section 521 of the Internal Revenue Code.
 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. 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.
 5
(Automatic)
 Although you are not required to file an income tax return on Form 1120, you must file an income tax return on Form 990–C, Farmers’ Cooperative Association Income Tax Return, each year. It is due by the fifteenth day of the ninth month after the end of your annual accounting period. If your existence is terminated, please mark "Final Return" on the Form 990–C for the last year of your existence.
 7
(Automatic)
 If you have employees, you may be liable for Federal employment taxes including the withholding of income tax. See Circular E, Employer’s Tax Guide (Publication 15) and Circular A, Agricultural Employer’s Tax Guide (Publication 51) for more information. If you have any questions or need the publications, please let us know.
 9  Here are some of the legal requirements that must be met to maintain your exempt status:
(Automatic) 1. Substantially all of your capital stock (other than nonvoting preferred) must be held by producers who are marketing their products or purchasing their supplies and equipment through you.
 11
(Automatic)
2. The value of products you market for nonmembers may not exceed the value of products you market for members.
 13 3. The value of supplies and equipment you purchase for n nonmembers may not exceed the value of supplies and equipment you purchase for members.
(Automatic) 4. The value of supplies and equipment you purchase for persons who are neither members nor producers may not be more than 15 percent of the value of all purchases.
 15 5. All patrons (members or nonmembers) must share in the net proceeds of your business on a patronage basis.
(Automatic) You need an employer identification number even if you have no employees. This number should be used on all returns you file and in all correspondence with the Internal Revenue Service. 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.
ADDITIONAL PARAGRAPHS
 3223
(Selective)
 Based on information you supplied, we recognize you as exempt from Federal income tax for the period [20V], your formation or incorporation
 3225
(Selective)
date, to [20V], your dissolution date. You are required to file Form(s) 990–C for that period.
5997
(Automatic)
 If we have indicated in the heading of this letter that an addendum applies, the enclosed addendum is an integral part of this letter.
5998
(Selective)
 We have sent a copy of this letter to your representative as indicated in your power of attorney.
5999  Please keep this letter in your permanent records. Thank you for your cooperation.
(Automatic) Sincerely yours,
8500
(Automatic)
Director, Exempt Organizations
8010
(Required)
Accounting Period Ending:
[20 V]
8011
(Required)
Addendum Applies:
[20V]
8610
(Selective)
Enclosure:
Addendum

Exhibit 7.21.5-5  (01-01-2003)
Letter 974 (DO/CG)
EO Reinstatement Letter

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Automatic)
 We sent you a letter on the above date terminating your exemption from Federal income tax as an organization of the kind described in section 501(a) or 521 of the Internal Revenue Code. The letter was sent because you had not filed a required annual information return.
 3
(Automatic)
 Now that you have filed a return, or were included in a group return, our termination letter is withdrawn and your exemption is reinstated. Your exemption is based in part upon your continuing to file annual information returns and furnish other information when requested.
5998
(Selective)
 We have sent a copy of this letter to your representative as indicated in your power of attorney.
5999  Please keep this notification for your records.
(Automatic) Sincerely yours,
8500
(Automatic)
Director, Exempt Organizations
8010
(Required)
Date of Our Termination Letter:
[20V]

Exhibit 7.21.5-6  (01-01-2003)
Letter 975 (DO/CG)
EO Letter to Parent Organizations When Subordinate Is Terminated

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Automatic)
 We have sent a letter to one of your subordinate organizations, and have enclosed a copy for your records. The letter terminates the organization’s Federal income tax exemption because the annual information return, Form 990, was not filed for the year or years stated in the letter.
 3
(Automatic)
 Since the subordinate is included in the tax exemption ruling that covers your subordinate units, the letter amends your group ruling to exclude this subordinate. If contributions to your subordinates are deductible for Federal income tax purposes, the letter advises that contributions to this particular subordinate are no longer deductible.
 5
(Automatic)
 You may want to remind your subordinates of the filing requirements so they may keep their tax-exempt status.
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
8610
(Automatic)
Enclosure:
Copy of this letter

Exhibit 7.21.5-7  (01-01-2003)
Letter 976 (DO/CG)
EO Amendment/Change in Operation Letter

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Automatic)
 Thank you for submitting the information shown on the enclosure. We have made it a part of your file.
 3
(Automatic)
 The changes indicated do not adversely affect your exempt status and the exemption letter issued to you continues in effect.
 5
(Automatic)
 Please let us know about any future change in the character, purpose, method of operation, name or address of your organization. This is a requirement for retaining your exempt status.
 6
(Selective)
 You have indicated that you plan to finance your activities with tax-exempt bond proceeds. By letter dated [20V] you have agreed to request a confirmation ruling as to the effect of bond financing on your exempt status from the Exempt Organizations Division, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC 20224, Attn: CP:E:EO in a reasonable time prior to the bond issuance date. Therefore, bond authorities should not rely on this determination concerning the effect of tax exempt bond financing on your exempt status.
 7
(Selective)
 You have indicated that you may use tax-exempt bond financing. However, you have no immediate or foreseeable plans to use such financing. Bond authorities should be aware that the Service has made no ruling concerning the effect of tax-exempt bond financing on your exempt status. You may obtain a confirmation ruling concerning the effect of tax-exempt bond financing on your exempt status from the Exempt Organizations Division, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224, Attn: CP:E:EO.
 8
(Selective)
 Since you have not indicated that you intend to finance your activities with the proceeds of tax exempt bond financing, in this letter, we have not determined the effect of such financing on your tax exempt status.
2001
(Automatic)
Item Changed  From   To
5998
(Selective)
 We have sent a copy of this letter to your representative as indicated in your power of attorney.
5999  Thank you for your cooperation.
(Automatic) Sincerely yours,
8500
(Automatic)
Director, Exempt Organizations
8010
(Required)
Date of Exemption:
[20V]
8011
(Required)
Internal Revenue Code
Section 501(c)([2V])

Exhibit 7.21.5-8  (01-01-2003)
Letter 993 (DO/CG)
EO Development Letter After Organization Files a Return

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Required)
 Your organization filed an exempt organization annual information return with the [20V] Service Center. The service center has processed the return but has no record that the Internal Revenue Service has issued you a determination letter recognizing your exemption from Federal income tax. This office, therefore, has been requested to determine your correct filing requirement.
 3
(Automatic)
 If you have not yet applied for recognition of exemption, you should complete an exemption application (Form 1023 or Form 1024, whichever is appropriate) and submit it to this office with a copy of this letter. Application forms are available at most Internal Revenue Service offices. If you previously submitted an application but never received a determination letter from the Service, please send us a copy of your application.
 5
(Automatic)
 If you have previously been determined to be exempt from Federal income tax, send us a copy of the letter in which the Internal Revenue Service stated it had determined that your organization was exempt from tax. If your organization is an affiliated subordinate of a central organization and is covered by its group exemption letter, send us a copy of that letter.
 7
(Automatic)
 If your organization was previously recognized as exempt from tax but has since changed its name, send us a copy of your Certificate of Amendment of the Articles of Incorporation endorsed by the appropriate State official showing the name change and any other organizational changes. In lieu of the above, send us a copy of the minutes of the meeting authorizing the name change if the organization is an unincorporated association, or an amended Indenture of Trust if the organization is a trust. Also, please notify us of each employer identification number you have used if you have used a number other than the one shown above.
 9
(Automatic)
 When you reply, please provide your telephone number and the most convenient time for us to call in case we need more information. Address your response to the contact person named in the heading of this letter.
 11
(Automatic)
 If we do not receive your response within 30 days from the date of this letter, we will assume your organization is not exempt from tax. You will then be required to file the appropriate Federal income tax return.
ADDITIONAL PARAGRAPHS
3000–3099  Please mail the information requested in this letter to the following address:
  [Addresses and instructions for the use of these paragraphs will be provided by the District Office.]
5999  Thank you for your cooperation.
(Automatic) Sincerely yours,

Exhibit 7.21.5-9  (01-01-2003)
Letter 996 (DO/CG)
EO Acknowledgment of Application Receipt and Referral to National

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Automatic)
 We received your application for recognition of exemption from Federal income tax.
 3
(Selective)
 We will consider your application as soon as possible and let you know whether you are exempt.
 4  We referred your application to our National Office for ruling and they will reply direct to you. If you have any questions, please write to:
(Selective)  Assistant Commissioner (E)
 Internal Revenue Service
 1111 Constitution Avenue, NW
 Washington, D.C. 20224

 Attention: E:EO
 7
(Automatic)
 If you do not receive a decision on your application by the date the annual information return for exempt organizations is due, file that return by the due date. File either Form 990, Return of Organization Exempt From Income Tax, or Form 990–PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as a Private Foundation, whichever is applicable. Check the block on the return indicating an application is pending.
 9
(Automatic)
 Please see the instructions for those returns to determine if any other returns are required.
5998
(Selective)
 We have sent a copy of this letter to your representative as indicated in your power of attorney.
5999  Thank you for your cooperation.
(Automatic) Sincerely yours,
8500
(Automatic)
Director, Exempt Organizations

Exhibit 7.21.5-10  (01-01-2003)
Letter 1034 (DO/CG)
EO Letter Notifying Organization of Income Tax Filing Requirement

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#: XXXXX
   Contact Telephone Number:
[Salutation]    
 1
(Automatic)
 On the above date, we asked you for information showing that your organization was tax-exempt or for an application requesting recognition of exemption.
 3
(Automatic)
 Since we have no record of receiving either, your organization must file Federal income tax returns as a taxable organization for each year it has been in operation.
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)
Date of Our Previous Letter:
[20V]
8011
(Required)
Form Number:
[4V]

Exhibit 7.21.5-11  (01-01-2003)
Letter 1035 (DO/CG)
EO Follow-up Letter on Request for Verification of Exemption or

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#: XXXXX
   Contact Telephone Number:
[Salutation]    
 1
(Automatic)
 On the above date, we asked you for information showing that your organization was tax-exempt or for an application requesting recognition of exemption. However, we have no record of receiving either.
 3
(Automatic)
 If you intend to furnish either item, please do so within 30 days from the date of this letter. If we have not heard from you within that time, we will be unable to recognize your organization as exempt. We have enclosed an application form and an envelope for your convenience.
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)
Date of Our Previous Letter:
[20V]
8011
(Required)
Form Number:
[4V]
8610
(Automatic)
Enclosures:
Application for exemption
Envelope

Exhibit 7.21.5-12  (01-01-2003)
Letter 1037 (DO/CG)
EO Development Letter Concerning Possible Termination

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#: XXXXX
   Contact Telephone Number:
[Salutation]    
 1  Our records indicate your organization is either inactive or has been dissolved. If your organization has been inactive for some time but has not been dissolved or otherwise terminated, you must continue to file an annual return if:
(Automatic)  (1) The organization is a private foundation, or
 3  (2) gross receipts are normally more than $25,000 and you are not excepted from filing.
(Automatic)  For more information, please see the instructions for Form 990 or Form 990–PF. If you were required to file and have not done so, you should file as soon as possible. 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
 4
(Automatic)
$1,000,000 in any year, the penalty is $100 per day per return, unless there is reasonable cause for the delay. The maximum penalty for an organization with gross receipts exceeding $1,000,000 shall not exceed $50,000. This penalty may also be charged if a return is not complete, so please be sure your return is complete before you file it.
 5
(Automatic)
 If your organization has been dissolved or otherwise terminated, please send us the items listed below:
 6
(Selective)
 A final return. Blank forms are enclosed. If you have already filed a final return, please send us a copy.
 7
(Selective)
 Corporations must provide a copy of the articles/certificate of dissolution issued by the state. Associations or trusts must submit a statement signed by a principal officer authorizing dissolution.
 9
(Selective)
 A statement showing the disposition of any assets on hand at the date of dissolution, signed by a person who was a principal officer of the organization on the date it was dissolved.
 11
(Selective)
 The names and telephone numbers of your organization’s officers who can be reached during business hours, Monday through Friday.
 15
(Automatic)
 Please let us hear from you as soon as possible. It will help us identify your case if you attach the copy of this letter to your reply. If you have any questions, please contact the person whose name and telephone number are shown in the heading of this letter.
3000–3999  Please mail the information requested in this letter to the following address:
(Selective) [Addresses and instructions for the use of these paragraphs will be provided by the District Office.]
5998
(Selective)
 We have sent a copy of this letter to your representative as indicated in your power of attorney.
5999  Thank you for your cooperation.
(Automatic) Sincerely yours,
8500
(Automatic)
Director, Exempt Organizations
8610
(Automatic)
Enclosure(s):
Copy of this letter
8620
(Selective)
Blank forms

Exhibit 7.21.5-13  (01-01-2003)
Letter 1042 (DO/CG)
EO Incomplete Letter

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Automatic)
 We are returning your application for recognition of exemption from Federal income tax under section 501(a) of the Internal Revenue Code because the application has not been fully completed.
 3
(Automatic)
 We will be glad to consider your application if you will complete and return it with the items listed on the attached sheet by the notification response date shown above. If you return it within that time, we will consider it received on the original submission date for purposes of notification under section 505(c) or 508(a) of the Code. If we do not hear from you by the notification response date, we will not take any further action on your application. However, an extension of time to submit the requested information may be granted for good cause. If you need an extension you must request it before the notification response date.
 5
(Automatic)
 You may be required to file Federal income tax returns if you do not take any further action to complete your application. When we receive the items requested, the preliminary screening of your application will be complete. Your application will then be assigned to an Exempt Organizations Specialist for technical consideration. The Specialist may need to request additional information to make a determination of exempt status.
 7
(Automatic)
 User fees are not refundable for applications that are returned to the submitter as incomplete. If you resubmit your application within 90 days from the date it is returned to you, no additional payment will be due. However, if you resubmit your application more than 90 days after the date of return, another user fee payment will be required. When you send the information we requested or write to us, PLEASE ATTACH THE COPY OF THIS LETTER.
298
(Automatic)
 List of Missing Items
 300
(Selective)
We have enclosed another application form because the application you submitted was on an outdate form. Please complete and return this revised application with required documents and statements.
302
(Selective)
 Provide your employer identification number (EIN), if you have one, or the date you have applied for one. If you have not applied, please complete and return the enclosed Form SS–4, Application for Employer Identification Number.
303
(Selective)
 The number you inserted on the application is not a valid employer identification number (EIN). Please verify the accuracy of the number before resubmitting your application.
304
(Selective)
 The application must be signed and dated by a person authorized to do so.
306
(Selective)
 If the organization has been in existence less than 12 months, a statement of revenue and expenses and a balance sheet for the current year (ending within 60 days of the date of the application). Also, a statement of revenue and expenses for any prior year along with budgets for the 2 years following the current year.
307
(Selective)
 If the organization has been in existence for more than one year, a statement of revenue and expenses for the current year and the three immediate prior years (or the years the organization has been in existence, if less than four years). Also submit a balance sheet for the current year (ending within 60 days of the date of the application).
308
(Selective)
 A copy of your corporate document that specifies the date it was approved by the appropriate state official (i.e. the date stamp and/or seal of the Secretary of State, Superintendent of Corporations, Judge of Probate or other similar official).
309
(Selective)
 A copy of your articles of association, constitution or other similar document creating your organization which sets forth your aims and purposes. The document must be signed by at least two members of your governing body and it must specify the date approved and adopted by your membership.
310
(Selective)
 A copy of your trust agreement or any other written instrument by which the organization was created, signed and dated by the trustee.
311
(Selective)
Please enter the date incorporated or formed in item 5 of the first page of the application.
312
(Selective)
A statement of revenue and expenses and a balance sheet for the current year (ending within 60 days of the date of the application). Also, a statement of revenue and expenses for any prior year along with proposed budgets for the 2 years following the current year.
313
(Selective)
A statement of revenue and expenses for the current year and each of the three immediate prior years (or the years the organization has been in existence, if less than four years) and a balance sheet for the current year.
314
(Selective)
A copy of your bylaws or similar internal rules of operation, or a statement that there are no bylaws.
315
(Selective)
Complete Item 11, Part III on page 2 of Form 1028.
316
(Selective)
Your response to the question concerning activities, on page 2 of the application, is either inadequate or missing. You must provide a detailed description of your past, present and future activities on page 2.
318
(Selective)
Complete Schedule [1V].
320
(Selective)
Any available pamphlets, brochures, literature, newsletters, etc. about your organization.
322
(Selective)
Check the appropriate box on page 1 of Form 1024 to indicate the Internal Revenue Code section under which you are applying for exemption and complete the corresponding schedule(s).
323
(Selective)
Since you requested an advance ruling on your foundation status, you must complete, sign, date, and return the enclosed Form 872–C in duplicate.
324
(Selective)
The month your annual accounting period ends.
325
(Selective)
Indicate the Internal Revenue Code section under which you are applying for exemption.
326
(Selective)
Check the appropriate box on page 1 of Form 1024 to indicate the Internal Revenue Code section under which you are applying for exemption.
328
(Selective)
The name and telephone number of a principal officer we can contact if we need more information.
330
(Selective)
Please send us a power of attorney if you wish to be represented by your attorney or accountant in this matter. You may use the enclosed Form 2848, Power of Attorney and Declaration of Representative, for this purpose.
331
(Selective)
Form 2848, Power of Attorney and Declaration of Representative, must be signed by both an authorized officer of the organization and the individual to whom power is being given (i.e. attorney or accountant). Please resubmit the attached Form 2848 with the required signature(s).
3000–3999  Please mail the information requested in this letter and the completed application to:
(Selective) [Addresses and instructions for the use of these paragraphs will be provided by the District Office.]
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.
   Thank you for your cooperation.
(Automatic) Sincerely yours,
8500
(Automatic)
Director, Exempt Organizations
8010
(Automatic)
90-Day User Fee Response Date:
8011
(Automatic)
Notification Response Date:
8012
(Required)
In Reply Refer To:
[20V]
8610
(Automatic)
Enclosures:
Your application
Copy of this letter
List of missing items
8620
(Selective)
Form 1023
8630
(Selective)
Forms 872–C
8640
(Selective)
Form 2848
8650
(Selective)
Form SS–4

Exhibit 7.21.5-14  (01-01-2003)
Letter 1045 (DO/CG)
EO Favorable Determination Letter 501(c)(3) and Advance Ruling on Foundation Status

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#: XXXXX
   Contact Telephone Number:
[Salutation]    
 1
(Automatic)
 Based on information you supplied, and assuming your operations will be as stated in your application for recognition of exemption, we have determined you are exempt from federal income tax under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3).
 2
(Selective)
Because you are a newly created organization, we are not now making a final determination of your foundation status under section 509(a) of the Code. However, we have determined that you can reasonably expect to be a publicly supported organization described in sections 509(a)(1) and 170(b)(1)(A)(vi).
 3
(Selective)
 Because you are a newly created organization, we are not now making a final determination of your foundation status under section 509(a) of the Code. However, we have determined that you can reasonably expect to be a publicly supported organization described in section 509(a)(2).
 4
(Automatic)
 Accordingly, during an advance ruling period you will be treated as a publicly supported organization, and not as a private foundation. This advance ruling period begins and ends on the dates shown above.
 5
(Automatic)
 Within 90 days after the end of your advance ruling period, you must send us the information needed to determine whether you have met the requirements of the applicable support test during the advance ruling period. If you establish that you have been a publicly supported organization, we will classify you as a section 509(a)(1) or 509(a)(2) organization as long as you continue to meet the requirements of the applicable support test. If you do not meet the public support requirements during the advance ruling period, we will classify you as a private foundation for future periods. Also, if we classify you as a private foundation, we will treat you as a private foundation from
 6
(Automatic)
your beginning date for purposes of section 507(d) and 4940.
 7
(Automatic)
 Grantors and contributors may rely on our determination that you are not a private foundation until 90 days after the end of your advance ruling period. If you send us the required information within the 90 days, grantors and contributors may continue to rely on the advance determination until we make a final determination of your foundation status.
 9
(Automatic)
 If we publish a notice in the Internal Revenue Bulletin stating that we will no longer treat you as a publicly supported organization, grantors and contributors may not rely on this determination after the date we publish the notice. In addition, if you lose your status as a publicly supported organization, and a grantor or contributor was responsible for, or was aware of, the act or failure to act, that resulted in your loss of such status, that person may not rely on this determination from the date of the act or failure to act. Also, if a grantor or contributor learned that we had given notice that you would be removed from classification as a publicly supported organization, then
 11
(Automatic)
that person may not rely on this determination as of the date he or she acquired such knowledge. If you change your sources of support, your purposes, character, or method of operation, please let us know so we can consider the effect of the change on your exempt status and foundation status. If you amend your organizational document or bylaws, please send us a copy of the amended document or bylaws. Also, let us know all changes in your name or address.
 12
(Automatic)
 As of January 1, 1984, you are liable for social security taxes under the Federal Insurance Contributions Act on amounts of $100 or more you pay to each of your employees during a calendar year. You are not liable for the tax imposed under the Federal Unemployment Tax Act (FUTA). Organizations that are not private foundations are not subject to the private foundation excise taxes under Chapter 42 of the Internal Revenue Code. However, you are not automatically exempt from other federal excise taxes. If you have any questions about excise, employment, or other federal taxes, please
 13 let us know.
(Automatic)  Donors may deduct contributions to you as provided in section 170 of the Internal Revenue Code. Bequests, legacies, devises, transfers, or gifts to you or for your use are deductible for Federal estate and gift tax purposes if they meet the applicable provisions of sections 2055, 2106, and 2522 of the Code.
 14
(Automatic)
 Donors may deduct contributions to you only to the extent that their contributions are gifts, with no consideration received. Ticket purchases and similar payments in conjunction with fundraising events may not necessarily qualify as deductible contributions, depending on the circumstances. Revenue Ruling 67–246, published in Cumulative Bulletin 1967–2, on page 104, gives guidelines regarding when taxpayers may deduct payments for admission to, or other participation in, fundraising activities for charity.
 15
(Selective)
 Contributions to you are deductible by donors beginning [20 V].
 16
(Automatic)
 You are not required to file Form 990, Return of Organization Exempt From Income Tax, if your gross receipts each year are normally $25,000 or less. If you receive a Form 990 package in the mail, simply attach the label provided, check the box in the heading to indicate that your annual gross receipts are normally $25,000 or less, and sign the return. Because you will be treated as a public charity for return filing purposes during your entire advance ruling period, you should file Form 990 for each year in your advance ruling period that you exceed the $25,000 filing threshold even if your sources of support do not satisfy the public support test specified in the heading of this letter.
 17
(Automatic)
 If a return is required, it must be filed by the 15th day of the fifth month after the end of your annual accounting period. A penalty of $20 a day is charged when a return is filed late, unless there is reasonable cause for the delay. However, the maximum penalty charged cannot exceed $10,000 or 5 percent of your gross receipts for the year, whichever is less. For organizations with gross receipts exceeding $1,000,000 in any year, the penalty is $100 per day per return, unless there is reasonable cause for the delay. The maximum penalty for an organization with gross receipts exceeding $1,000,000 shall not exceed $50,000. This penalty may also be charged if a
 18
(Automatic)
return is not complete. So, please be sure your return is complete before you file it.
 19
(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.
 20
(Automatic)
 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).
 21
(Automatic)
You need an employer identification number even if you have no employees. If an employer identification number was not entered on your application, we will assign a number to you and advise you of it. Please use that number on all returns you file and in all correspondence with the Internal Revenue Service.
ADDITIONAL PARAGRAPHS
3206
(Selective)
 This ruling is based on the understanding that the majority of your Board of Directors will be non-salaried and will not be related to salaried personnel or to parties providing services. It is also based on the understanding that salaried individuals cannot vote on their own compensation and that compensation decisions will be made by the board.
3207
(Selective)
 This ruling is based on the understanding that you will enter a formal agreement with the state regulatory agency to operate as a provider under the Special Nutrition Food Program and to operate that program within the state’s guidelines.
3208
(Selective)
 As part of a continuing program, we periodically examine the operations of tax-exempt organizations. The purpose of this program is to determine whether the organizations are operating within the scope of the laws under which they are granted exemption. Therefore, you should keep information that would show that you are operating for section 501(c)(3) purposes. The information should include the training given to the child care providers, number of inspections, reports submitted to the state, and other pertinent information about your activities. You should also keep records of your income and your disbursements of funds.
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 we will not treat an organization organized after October 9, 1969, as an organization described in section 501(c)(3) for any period before it gives notice that it is applying for recognition of exempt status, if it gives such notice 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 it was organized. The notice is filed by submitting a properly completed Form 1023, exemption application, with the key district director.
3217
(Selective)
 Our records show 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) apply to you, the effective date of your exemption is [20V]. Contributions made to you on or after this date are tax deductible.
3219
(Selective)
 Revenue Ruling 77–208, published in Cumulative Bulletin 1977–1, on page 153, states that if an organization does not apply within 15 months of its formation, we will not consider financial information for the period prior to the application date in determining an organization’s private foundation status. Accordingly, your advance ruling covers the period beginning and ending on the advance ruling period dates shown in the heading of this letter. Contributions by donors would be deductible beginning [20V].
3220
(Selective)
 You may also seek relief from federal income tax for the period before the effective date of this exemption by filing Form 1024, requesting recognition of exemption under section 501(c)(4) for that period. Contributions to organizations exempt under section 501(c)(4) are not deductible.
3221
(Selective)
 If you elect to file Form 1024, be sure to indicate that it is intended only to cover the period during which you could not qualify under section 501(c)(3) of the Code.
3222
(Selective)
 You have agreed on your application for exemption under section 501(c)(3) of the Code that your exemption is effective [20V], the date your completed application was filed.
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 keep records to show that funds are spent 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), you must have evidence that the funds will remain dedicated to the required purposes and that the recipient will use the funds for those purposes.
3235
(Selective)
 If you distribute funds to individuals, you should keep case histories showing the recipients’ names, addresses, purposes of awards, manner of selection, and relationship (if any) to members, officers, trustees or donors of funds to you, so that you can substantiate upon request by the Internal Revenue Service any and all distributions you made to individuals. (Revenue Ruling 56–304, C.B. 1956–2, page 306.)
3237
(Selective)
 Evidence you submitted with your application shows 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.
3277
(Selective)
 If you are an instrumentality that is owned completely by a state or a political subdivision of a state, wages paid for services performed for you are not subject to unemployment taxes under the Federal Unemployment Tax Act (FUTA) or to any portion of the social security taxes under the Federal Insurance Contributions Act (FICA). Wages for your employees hired after March 31, 1986, are subject only to the medicare portion of the social security tax. If you want full social security coverage for your employees, you may obtain it only by an agreement under section 218 of the Social Security Act between the state and the Secretary of Health and Human Services.
3341
(Selective)
 If you do not agree with our determination, you may request that the Office of Regional Director of Appeals consider this matter. 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 we will contact you to arrange a date. The hearing may be held at the regional office, or, if you request, at any mutually convenient district office. If someone represents you who is not one of your principal officers, that person needs to file a power of attorney or tax information authorization
3342
(Selective)
with us.
3343
(Selective)
 If you don’t 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 don’t appeal this determination within the time provided, we will not consider you to have exhausted 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 remedies
3344
(Selective)
 available to it within the Internal Revenue Service."
3347
(Selective)
 No further appeal is available within the Internal Revenue Service on the denial of your request for retroactive relief under section 1.9100 of the Regulations regarding the effective date of your exemption. You may still take advantage, however, of the declaratory judgment rights as described in the enclosed Publication 892.
3348
(Selective)
 If you agree with our determination, please sign and return the enclosed Form 6018 as soon as possible.
3350
(Selective)
 This determination is based on the understanding that you will own and operate your health care facility directly, without using a management company. Bond authorities should not rely on the validity of this letter if you do not operate the facility directly.
5997
(Automatic)
 If we said in the heading of this letter that an addendum applies, the addendum enclosed is an integral part of this letter. Because this letter could help us resolve any questions about your exempt status and foundation status, you should keep it in your permanent records.
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)
Foundation Status Classification:
[20V]
8012
(Required)
Advance Ruling Period Begins:
[20V]
8013
(Required)
Advance Ruling Period Ends:
[20V]
8014
(Required)
Addendum Applies:
[20V]
8610
(Selective)
Enclosure(s):
8620
(Selective)
Addendum
8630
(Selective)
Forms 872–C
8640
(Selective)
Form 6018
8650
(Selective)
State Attorney General [20V]

Exhibit 7.21.5-15  (01-01-2003)
Letter 1046 (DO/CG)
EO Follow-up After an Advance Ruling of Foundation Status

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#: XXXX
   Contact Telephone Number:
[Salutation]    
 1
(Automatic)
 Our letter of the above date stated that we had determined your organization is exempt under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3) and that you would be treated as a publicly supported organization and not as a private foundation during your advance ruling period. This was based on our determination that you could reasonably be expected to be an organization described in sections 170(b)(1)(A)(vi) and 509(a)(1) or in section 509(a)(2).
 3
(Automatic)
 We also stated that at the end of your advance ruling period you would have to establish that you were in fact an organization described in one of the above sections.
 5
(Automatic)
 Our records indicate that your advance ruling period begins and ends on the dates shown above. Your exempt status as an organization described in section 501(c)(3) is still in effect. However, to establish that you are a publicly supported organization described in sections 170(b)(1)(A)(vi) and 509(a)(1) or in section 509(a)(2), please complete the attached Form 8734, Support Schedule for Advance Ruling Period, for each of the tax years in your advance ruling period.
 7
(Automatic)
 The information requested in this letter is required to support your claim to be other than a private foundation. It is needed in addition to any required Form 990 or other annual return. Please send it to us within 90 days from the end of your advance ruling period.
 9
(Automatic)
 If we do not receive this information, we will presume you are a private foundation and you will be treated as a private foundation as of the first day of your first tax year for purposes of sections 507(d) and 4940 of the Code. In addition, if you do not provide the information by the time requested, it will be considered by the Internal Revenue Service that you have not taken all reasonable steps to secure the determination you requested. Under section 7428(b)(2) of the Code, not taking all reasonable steps, in a timely manner, to secure the determination may be considered as a failure to exhaust administrative remedies available to you within the Service, and may preclude the issu-
   
 10
(Automatic)
ance of a declaratory judgment in the matter under judicial proceedings.
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.
   Thank you for your cooperation.
(Automatic) Sincerely yours,
8500
(Automatic)
Director, Exempt Organizations
8010
(Required)
Our Letter Dated:
[20V]
8011
(Required)
Advance Ruling Period Begins:
[20V]
8012
(Required)
Advance Ruling Period Ends:
[20V]
8013
(Required)
Addendum Applies:
[20V]
8610
(Automatic)
Enclosures:
Form 8734
Copy of this letter
8620
(Selective)
Form 872–C
8630
(Selective)
Addendum

Exhibit 7.21.5-16  (01-01-2003)
Letter 1048 (DO/CG)
EO Private Foundation Letter After No Response to Follow-up

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#: XXXXX
   Contact Telephone Number:
[Salutation]    
 1
(Required)
 Our letter of the above date asked for information we needed to make a final determination of your private foundation status under section 509(a)[1V] of the Internal Revenue Code.
 3
(Required)
 Since we have not received the information, you are, under section 508(b) of the Code, presumed to be a private foundation as of the 91st day after the end of your advance ruling period, shown above. In addition, you are presumed to be a private foundation as of the first day of your first tax year for purposes of sections 507(d) and 4940 of the Code. This presumption, however, is rebuttable. If you meet the requirements of section 509(a)(^), you may establish that fact by submitting a written request for a determination.
 5  Your exempt status under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3) is still in effect. Based on this presumption, you are required to file Form 990–PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as a Private Foundation, for the current and all subsequent years. 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
 6
(Automatic)
exceed $10,000 or 5 percent of your gross receipts for the year, whichever is less. For organizations with gross receipts exceeding $1,000,000 in any year, the penalty is $100 per day per return, unless there is reasonable cause for the delay. The maximum penalty for an organization with gross receipts exceeding $1,000,000 shall not exceed $50,000. This penalty may also be charged if a return is not complete, so please be sure your return is complete before you file it.
 7
(Automatic)
Since you are presumed to be a private foundation as of the first day of your first tax year for purposes of sections 507(d) and 4940 of the Code, you are required to file a limited Form 990–PF for each year in your advance ruling period. Complete only the general information at the top of the form, column (b) of Part I, all of Parts IV and VI (or all of Parts VII and II, respectively, for tax years beginning before 1985), and Part V (if applicable), and be sure to sign the return. If you file within 90 days from the date of this letter, you will not be subject to the penalty provisions of sections 6651 and 6652. Attach a statement to the returns explaining that you have reason-
 8
(Automatic)
able cause for filing late (your advance ruling) and cite Revenue Procedure 79–8, 1979–1 C.B. 487. File the limited Forms 990–PF described in this paragraph with this office. Attach your check or money order for the full amount of tax due. We will figure the interest due and send you a bill.
 9
(Automatic)
 You are presumed to be a private foundation as of [20V].
 10
(Selective)
 You are presumed to be a private foundation as of the date of this letter.
 11
(Required)
 All parts of the Form 990–PF for [20V] should be completed. However, the figures for column (c) of Part I, all of Part IX through Part XIV, and Part XV (if applicable), and your answers to the questions in Part VII should reflect only the period beginning on the above date and ending on the last day of your tax year. Forms 990–PF for subsequent years should be completed and filed according to the instructions for those forms.
 12
(Automatic)
 Since you have not provided the information needed to make a final determination of your private foundation status, it is considered by the Internal Revenue Service that you have not taken all reasonable steps to secure the determination you requested. Under section 7428(b)(2) of the Code, not taking all reasonable steps, in a timely manner, to secure the determination may be considered as a failure to exhaust administrative remedies available to you within the Service, and may preclude the issuance of a declaratory judgment in the matter under judicial proceedings.
 13
(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).
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 in the heading of this letter.
(Automatic) Sincerely yours,
8500
(Automatic)
Director, Exempt Organizations
8010
(Required)
Our Letter Dated:
[20V]
8011
(Required)
Advance Ruling Period Ends:
[20V]
8012
(Required)
Addendum Applies:
[20V]
8610
(Selective)
Enclosure:
Addendum

Exhibit 7.21.5-17  (01-01-2003)
Letter 1050 (DO/CG)
Favorable Determination Letter on Foundation Status

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Automatic)
 This modifies our letter of the above date in which we stated that you would be treated as an organization that is not a private foundation until the expiration of your advance ruling period.
 2
(Selective)
 Your exempt status under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3) is still in effect. Based on the information you submitted, we have determined that you are not a private foundation within the meaning of section 509(a) of the Code because you are an organization of the type described in section 509(a)(1) and 170(b)(1)(A)([2V]).
 3
(Selective)
 Your exempt status under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3) is still in effect. Based on the information you submitted, we have determined that you are not a private foundation within the meaning of section 509(a) of the Code because you are an organization of the type described in section 509(a)(2).
 5
(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)(^) organization.
ADDITIONAL PARAGRAPHS
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.
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, 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 7.21.5-18  (01-01-2003)
Letter 1051 (DO/CG)
EO Favorable Determination 501(c)(3) Organization not Eligible for Definitive Ruling on Foundation Status

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Automatic)
 Based on information you supplied, and assuming your operations will be as stated in your application for recognition of exemption, we have determined you are exempt from federal income tax under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3).
 3
(Automatic)
 Because you are a newly created organization, we are not now making a final determination of your foundation status under section 509(a) of the Code. However, based on the information you submitted, we have determined that you cannot reasonably be expected to meet the support requirements of either section 170(b)(1)(A)(vi) or 509(a)(2) of the Code.
 5
(Required)
 Within 90 days after [20V], you must send us information to establish whether you have met the requirements of the applicable support test for the period ending on the above date. If you establish that you have been a publicly supported organization, you will be classified as a section 509(a) organization as long as you continue to meet the requirements of the applicable support test. If you do not meet the public support requirements, you will be classified as a private foundation as of the date of your inception and, therefore, subject to the excise taxes under Chapter 42 of the Code from that date.
 7  As a result, it is to your advantage to comply with the rules that apply to private foundations and pay the tax imposed by section 4940 of the Code by filing Form 990–PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as a Private Foundation. If you do not comply with these rules and are ultimately determined to be a private foundation, you may be subject to penalties and taxes in addition to the tax imposed by section 4940. If you meet the requirements of section 509(a) by [20V], you will be treated as a section 509(a) organization from the date of your inception, and any tax you may have paid under Chapter 42 will be refunded to you if you file a claim
 8 for refund within the time allowed by law.
(Automatic)  If you change your sources of support, your purposes, character, or method of operation, please let us know so we can consider the effect of the change on your exempt status and foundation status. If you amend your organizational document or bylaws, please send us a copy of the amended document or bylaws. Also, let us know any changes in your name or address.
 10
(Automatic)
 As of January 1, 1984, you are liable for social security taxes under the Federal Insurance Contributions Act on amounts of $100 or more you pay to each of your employees during a calendar year. You are not liable for the tax imposed under the Federal Unemployment Tax Act (FUTA). If it is determined that 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 taxes, please let us know.
 12
(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.
 13
(Automatic)
 Exempt organizations that are private foundations are required to file Form 990–PF. Generally, all other exempt organizations, if their gross receipts each year are normally more that $25,000, are required to file Form 990, Return of Organization Exempt From Income Tax. Form 990 or 990–PF must be filed by the 15th day of the fifth month after the end of the organization’s 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
 14
(Automatic)
receipts exceeding $1,000,000 in any year, the penalty is $100 per day per return, unless there is reasonable cause for the delay. The maximum penalty for an organization with gross receipts exceeding $1,000,000 shall not exceed $50,000. This penalty may also be charged if a return is not complete, so please be sure your return is complete before you file it.
 15
(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).
 16
(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.
 18
(Automatic)
 You need an employer identification number even if you have no employees. If you did not enter an employer identification number on your application, we will assign a number to you, and let you know. Please use that number on all returns you file and in all correspondence with the Internal Revenue Service.
 20
(Automatic)
 If you do not agree with our determination that you cannot reasonably be expected to meet the support requirements of either section 170(b)(1)(A)(vi) or 509(a)(2) of the Code, you may ask that the Office of Regional Director of Appeals consider the matter. 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 we will contact you 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 repre-
 21
(Automatic)
sented by someone who is not one of your principal officers, that person will need to file a power of attorney or tax information authorization with us. If you do not appeal this determination on meeting the support requirements 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, we will not consider you to have exhausted available administrative remedies. Section 7428(b)(2) of the Code provides, that, "A declaratory judgment or decree under this section shall not be issued in any proceeding unless the Tax Court, the
 22
(Automatic)
 Claims Court, or the District Court of the United States for the District of Columbia determines that the organization involved has exhausted administrative remedies available to it within the Internal Revenue Service."
ADDITIONAL PARAGRAPHS
3206
(Selective)
 This ruling is based on the understanding that the majority of your Board of Directors will be non-salaried and will not be related to salaried personnel or to parties providing services. It is also based on the understanding that salaried individuals cannot vote on their own compensation and that compensation decisions will be made by the board.
3207
(Selective)
 This ruling is based on the understanding that you will enter a formal agreement with the state regulatory agency to operate as a provider under the Special Nutrition Food Program and to operate that program within the state’s guidelines.
3208
(Selective)
 As part of a continuing program, we periodically examine the operations of tax-exempt organizations. The purpose of this program is to determine whether the organizations are operating within the scope of the laws under which they are granted exemption. Therefore, you should keep information that would show that you are operating for section 501(c)(3) purposes. The information should include the training given to the child care providers, number of inspections, reports submitted to the state, and other pertinent information about your activities. You should also keep records of your income and your disbursements of funds.
3223
(Selective)
 Based on the information you supplied, we recognize you as exempt from federal income tax for the period [20V], your formation or
3224
(Selective)
incorporation date, to [20V], your dissolution date. You are not required to file federal income tax returns for that period.
3349
(Selective)
 You indicate that you will not finance your activities with tax-exempt bonds or certificates of participation. Therefore, this determination letter is based on the understanding that you will not raise funds through such financing. If in the future you wish to raise funds by either of these methods, you should request a ruling from the Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington, D.C. 20224, Attn: CP:E:EO:R, according to Revenue Procedure 90–4, 1990–2 I.R.B. 10.
3350
(Selective)
 This determination is based on the understanding that you will own and operate your health care facility directly, without using a management company. Bond authorities should not rely on the validity of this letter if you do not operate the facility directly.
5997
(Automatic)
 If we have indicated in the heading of this letter that an addendum applies, the addendum enclosed is an integral part of the letter. Because this letter could help resolve any questions about your exempt status and private foundation status, you should keep it for your 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
(Automatic)
Enclosure(s):
Publication 892
8620
(Selective)
Addendum

Exhibit 7.21.5-19  (01-01-2003)
Letter 1071 (DO/CG)
EO Favorable Determination Letter under 509(a)(3) for a NECT

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   Person to Contact:
   Contact Telephone Number:
[Salutation]    
 1  Based on information supplied, we have classified your organization as one that is not a private foundation as defined in section 509(a) of the Internal Revenue Code because you are an organization described in section 509(a)(3).
(Automatic)  This classification is based on the assumption that your operations will continue as you have stated. If your purposes, character, or method of operation change, please let us know so we can consider the effect of the change on your foundation status.
 3
(Automatic)
 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)(3) status, a grantor or contributor may not rely on this determination if he or she was in part responsible for, or was aware of, the act or failure to act, or the substantial or material change on the part of the organization that resulted in your loss of such status, or if he or she acquired knowledge that the Internal Revenue Service had given notice that you would no longer be classified as a section 509(a)(3) organization.
 4
(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 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 7.21.5-20  (01-01-2003)
Letter 1075 (DO/CG)
EO Favorable Determination Letter to a Private Operating Foundation under 4942(j)(3)

EDS
Paragraph
Numbers
Text  
   Employer Identification Number:
   DLN:
   Person to Contact:
    ID#:
   Contact Telephone Number:
[Salutation]    
 1
(Automatic)
 Based on information you supplied, and assuming your operations will be as stated in your application for recognition of exemption, we have determined you are exempt from federal income tax under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3). We also determined that you are a private foundation within the meaning of section 509(a) of the Code.
 2  Based on the information you submitted with your application, we have determined that you are likely to qualify as a private operating foundation described in section 4942(j)(3) of the Code. Accordingly, you are treated as a private operating foundation for your first year. After that, you will be related as a private operating foundation as long as you continue to meet the requirements of section 4942(j)(3).
(Selective)  This ruling satisfies the good faith determination requirement of section 53.4942(b)–3(b)(2) of the Excise Tax Regulations.
 3
(Selective)
 Based on the information you submitted with your application, we have determined that you are likely to qualify as a private operating foundation described in section 4942(j)(3) of the Code. Accordingly, you are treated as a private operating foundation for your first year of exempt status. After that, you will be treated as a private operating foundation as long as you continue to meet the requirements of section 4942(j)(3).
 4
(Automatic)
 If you change your sources of support, your purposes, character, or method of operation, please let us know so we can consider the effect of the change on your exempt status and foundation status. If you amend your organizational document or bylaws, please send us a copy of the amended document or bylaws. Also, let us know any changes in your name or address.
 5
(Automatic)
 As of January 1, 1984, you are liable for social security taxes under the Federal Insurance Contributions Act on amounts of $100 or more you pay to each of your employees during a calendar year. You are not liable for the tax imposed under the Federal Unemployment Tax Act (FUTA). 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 taxes, please let us know.
 7
(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)
 Donors may deduct contributions only to the extent 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 Publication 1391, which sets forth guidelines on when payments made by taxpayers for admission to, or other participation in fundraising activities for charity are deductible as charitable contributions.
 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
 10
(Automatic)
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.
 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 you did not enter an employer identification number on your application, we will assign a number to you and let you know. Please use that number on all returns you file and in all correspondence with the Internal Revenue Service.
ADDITIONAL PARAGRAPHS
3211
(Selective)
 In accordance with section 508(a) of the Internal Revenue Code, the effective date of this determination letter is [20V].
3213
(Selective)
 Section 508(a)(2) of the Internal Revenue Code states we will not treat an organization organized after October 9, 1969, as an organization described in section 501(c)(3) for any period before it gives notice that it is applying for recognition of exempt status, if it gives such notice 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 it was organized. The notice is filed by submitting a properly completed Form 1023, exemption application, with the key district director.
3217
(Selective)
 Our records show 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) apply 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 keep records to show that funds are spent 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), you must have evidence that the funds will remain dedicated to the required purposes and that the recipient will use the funds for those purposes.
3235
(Selective)
 If you distribute funds to individuals, you should keep case histories showing the recipients’ names, addresses, purposes of awards, manner of selection, and relationship (if any) to members, officers, trustees or donors of funds to you, so that you can substantiate upon request by the Internal Revenue Service any and all distributions you made to individuals. (Revenue Ruling 56–304, C.B. 1956–2, page 306.)
3237
(Selective)
 Evidence you submitted with your application shows 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). This means 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
3244
(Selective)
1986.
   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
3245 will not be restricted to a course of study that would be of particular benefit to the relevant employee 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: (1) 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
3246 recipients of grants in that year, or (2) the number of grants 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 (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. You should keep records 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 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 under your program remain in compliance with sections 4.01 through .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 selection 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 to a course of study that would be of particular benefit to the relevant employer or to the foundation.
3256
(Selective)
 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 eligible, were applicants for such grants, and 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 employees’
3257
(Selective)
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 test of section 4.10 applicable to a program that awards loans to children of employees of a particular employer. You should keep records 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 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 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 sections 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 to further the purposes for which you are organized. Therefore, you should keep 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
3266
(Selective)
the 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 loan 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 to a course of study that would be of particular benefit to the relevant employer or to the foundation.
(Selective) 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: (1) the number of grants or loans awarded under that program in any year to such children does not exceed 25 percent of the number of employees’ children
3269
(Selective)
who were eligible, were applicants for such grants or loans, and 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 grants of
3270 scholarships, fellowships, and educational loans.
(Selective)  You have agreed that your program will meet the requirements of either the 25 percent or 10 percent 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. You should keep records 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 sections 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 that the Office of Regional Director of Appeals consider this matter. 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 we will contact you to arrange a date. The hearing may be held at the regional office, or, if you request, at any mutually convenient district office. If someone represents you who is not one of your principal officers, that person needs to file a power of attorney or tax information authorization
3342
(Selective)
with us.
3343
(Selective)
 If you don’t 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 don’t appeal this determination within the time provided, we will not consider you to have exhausted 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 remedies
3344
(Selective)
available to it within the Internal Revenue Service."
3349
(Selective)
 You indicate that you will not finance your activities with tax-exempt bonds or certificates of participation. Therefore, this determination letter is based on the understanding that you will not raise funds through such financing. If in the future you wish to raise funds by either of these methods, you should request a ruling from the Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington, D.C. 20224, Attn: E:EO:R, according to Revenue Procedure 90–4, 1990–2 I.R.B. 10.
3350
(Selective)
 This determination is based on the understanding that you will own and operate your health care facility directly, without using a management company. Bond authorities should not rely on the validity of this letter if you do not operate the facility directly.
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 private foundation status, you should keep it for your 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

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