Dear Applicant:
Based on information supplied, and
assuming your operations
will be as stated in your application for recognition of
exemption, we have determined you are exempt from federal income
tax under section 501(a) of the Internal Revenue Code as an
organization described in section 501(c)(3).
Based upon the facts and
circumstances represented in your request for relief under section
1.9100-1 of the Income Tax
Regulations, an extension of the period allowed for the filing of
notice required under section 508(a) of he Code and section
1.508-l(a)(2) of the regulations is granted. Accordingly, your
exemption under section 501(c)(3) is effective beginning on the
date shown above, the date you were organized.
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 the section(s)
above.
If your sources of support, or your
purposes, character, or method of operation change, please let your
key district know so that office can consider the effect of the
change on your exempt
status and foundation status. In the case of an amended document
or bylaws, please send a copy of the amended document or bylaws to your
key district. Also, you should inform your key District
Director of all changes in your name or address.
Unless you are an instrumentality of
a state or a political
subdivision of a state, or otherwise specifically
excepted, you are liable for the social security and medicare taxes
under the Federal Insurance Contributions Act (FICA) 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).
If you are a wholly-owned
instrumentality of a state or
political subdivision of a state, you are liable for FICA
taxes
with regard to services included under an agreement entered into
under section 218 of the Social Security Act. (For information
in this regard, you may contact your state social security
administrator.) Wages of any employees not covered under a
section 218 agreement, but who were hired after March 31, 1986,
are subject to the medicare portion of the FICA taxes. Finally,
with regard to services performed after July 1, 1991, the wages of any
employees not covered under a section 218 agreement and
who are not members of a retirement system of the state,
political subdivision, or instrumentality,
are subject to the
social security and medicare taxes.
Any questions that you may have as
to whether you are an
instrumentality of a state or a political subdivision
should be addressed to the Internal Revenue Service, Office of the
Associate Chief Counsel (Technical), P.O. Box 7604, Ben Franklin
Station, Washington, D.C. 20044.
Unless you are an instrumentality you
are required to file
Form 990, Return of Organization Exempt From Income Tax,
if your gross receipts each year are normally more than $25,000.
Such returns are not required to be filed by organizations that are
instrumentalities of a state or a political subdivision
thereof, the income of which is excluded from gross income pursuant
to
section 115 of the Code. If you believe your income is excluded
from gross income pursuant to section 115 of the Code, you should request
an appropriate ruling from the Office of Chief Counsel,
as indicated above.
If you are required to file Form 990,
but your gross
receipts each year are not normally more than $25,000, we
ask that you establish that you are not required to file Form 990 by
completing Part I of that Form for your first year. Thereafter,
you will not be required to file a return until your
gross
receipts exceed the $25,000 minimum. For guidance in determining if
your gross receipts are "normally" not more than the $25,000 limit,
see the instructions for the 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 $10
a
day is charged when a return is filed late, unless there is
reasonable cause for the delay. The maximum penalty charged cannot
exceed $5,000 or 5 percent of your gross receipts for the year,
whichever is less. This penalty may also be charged if a
return is not complete, so please be sure
your return is complete
.before you file it.
You are 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, and supporting documents, and
this exemption letter.
Failure to make these documents available for public
inspection
may subject you to a penalty of $10 per day for each day there is
a
failure to comply (up to a maximum of $5,000 in the case of an
annual return). See Internal Revenue Service Notice 88-120, 1988-2
C.B. 454, for additional information.
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.
Since you are not a private
foundation, you are not subject to the excise taxes under Chapter 42
of the 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 contact your key District Director.
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.
If your organization conducts
fund-raising events such as benefit dinners, auctions, membership
drives, etc., where something of value is received in return for
contributions, you can help your donors avoid difficulties with
their income tax
returns by assisting them in determining the proper tax treatment of
their contributions. To do this you should, in advance of the
event, determine the fair market value of the benefit received and state
it in your fund-raising materials such as solicitations, tickets,
and receipts in such a way that your
donors can determine how much is deductible
and how much is not. To assist you in this, the Service has issued
Publication 1391,
Deductibility of Payments Made to Organizations Conducting
Fund-Raising Events. You may obtain copies of Publication 1391
from your key district office.
In this letter, we have not
determined the effect on your
tax-exempt status of financing your activities with the
proceeds
.of tax exempt bonds since you have not indicated that you intend
to
use such methods now or in the future
You need an employer identification number even if you have
no employees. Please use that number
on all returns you file and
in all correspondence with the Internal
Revenue Service.
We are informing your key District
Director of this ruling.
Because this letter could help resolve any questions about
your
exempt status and foundation status, you should keep it in your
permanent records.
If you have any questions about this
ruling, please contact
the person whose name and telephone number are shown in
the heading of this letter. For other matters, including questions
concerning reporting requirements, please contact your key
District Director.
Sincerely,
Marvin Friedlander Chief,
Exempt Organizations
Rulings Branch 1
|