IRS Published Taxpayer Determination Letter 202634015

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document. Native kind: determination letter; this is not a private letter ruling.

AYA
IRS

Department of the Treasury
Internal Revenue Service
Tax Exempt and Government Entities

Date:
05/27/2026
Employer ID number:

Form you must file:

Tax years:

Person to contact:

Telephone:

Release Number: 202634015

Release Date: 8/21/26

UIL Code: 501.03-30, 501.32-00, 501.33-00

Dear

:

This letter is our final determination that you don't qualify for exemption from federal income tax under Internal
Revenue Code (IRC) Section 501(a) as an organization described in IRC Section 501(c)(3). Recently, we sent
you a proposed adverse determination in response to your application. The proposed adverse determination
explained the facts, law, and basis for our conclusion, and it gave you 30 days to file a protest. Because we
didn't receive a protest within the required 30 days, the proposed determination is now final.

Because you don't qualify as a tax-exempt organization under IRC Section 501(c)(3), donors generally can't
deduct contributions to you under IRC Section 170.

We may notify the appropriate state officials of our determination, as required by IRC Section 6104(c), by
sending them a copy of this final letter along with the proposed determination letter.

You must file the federal income tax forms for the tax years shown above within 30 days from the date of this
letter unless you request an extension of time to file. For further instructions, forms, and information, visit
www.irs.gov.

We'll make this final adverse determination letter and the proposed adverse determination letter available for
public inspection after deleting certain identifying information, as required by IRC Section 6110. Read the
enclosed Letter 437, Notice of Intention to Disclose - Rulings, and review the two attached letters that show our
proposed deletions. If you disagree with our proposed deletions, follow the instructions in the Letter 437 on how
to notify us. If you agree with our deletions, you don't need to take any further action.

If you have questions about this letter, you can call the contact person shown above. If you have questions
about your federal income tax status and responsibilities, call our customer service number at 800-829-1040
(TTY 800-829-4933 for deaf or hard of hearing) or customer service for businesses at 800-829-4933.

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Sincerely,
Stephen A. Martin
Director, Exempt Organizations
Rulings and Agreements

Enclosures:
Letter 437
Redacted Letter 4034
Redacted Letter 4038

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Department of the Treasury
Internal Revenue Service

IRS

Date:
04/01/2026

Employer ID number:

Person to contact:

Name:

ID number:

Telephone

Fax:

Legend:

UIL:
501.03-30

D = Date
E = Name

501.32-00

501.33-00

F = Number
G = Number

H = Number
x dollars = Amount
y dollars = Amount
z dollars = Amount

Dear
:

We considered your application for recognition of exemption from federal income tax under Internal Revenue
Code (IRC) Section 501(a). We determined that you don't qualify for exemption under IRC Section 501(c)(3).
This letter explains the reasons for our conclusion. Please keep it for your records.

Issues

Do you qualify for exemption under IRC Section 501(c)(3)? No, for the reasons stated below.

# Facts

You submitted Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal
Revenue Code. Your application indicated that you formed as an unincorporated association on D. You didn't
submit your organizing document, but you did submit a statement that upon dissolution, the ownership of the
property your facility sits on will remain in E's family. The facility will be sold with proceeds used to pay off
all outstanding debts and the remainder of your assets will be distributed proportionately back to the donors.
Any food on hand would be distributed to the food bank.

You stated you are a religious based teaching center designed to help believers grow spiritually and become
religious disciples. You have started building relationships with the pastors of small country churches and your
goal is for these pastors to help their members grow spiritually using the teachings you will provide. You will
primarily be a teaching center and will use tv programs, DVDs, CDs, and live teachers. You will have a

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teaching series on weekends and others that will be 5 days a week. You will also have teachings for pastors as
well as sit down dinners aimed at various groups such as neighbors, local pastors, county commissioners, law
enforcement, and your contributors and contractors.

You are governed by E and his two daughters who are also currently your only members. You hope to have as
many as G members over the next H years.

E owns the acre lot where you are building your facility. E's
will inherit this lot. Your building is
projected to cost x dollars. E has contributed y dollars. The remainder will come from E's savings account,
monthly donations from partners, and individual donations. Donors giving more than z dollars are promised
proportional ownership in the organization.

# Law

Internal Revenue Code Section 501(c)(3) provides for the recognition of exemption of organizations that are
organized and operated exclusively for religious, charitable, or other purposes as specified in the statute. No
part of the net earnings may inure to the benefit of any private shareholder or individual.

Treasury Regulation Section 1.501(c)(3)-1(a)(1) states that, in order to be exempt as an organization described
in IRC Section 501(c)(3), an organization must be both organized and operated exclusively for one or more of
the purposes specified in such section. If an organization fails to meet either the organizational test or the
operational test, it is not exempt.

Treas. Reg. Section 1.501(c)(3)-1(b)(4) holds that an organization is not organized exclusively for one or more
exempt purposes unless its assets are dedicated to an exempt purpose. An organization's assets will be
considered dedicated to an exempt purpose, for example, if, upon dissolution, such assets would, by reason of a
provision in the organization's articles or operation of law, be distributed for one or more exempt purposes.

Treas. Reg. Section 1.501 (c)(3)-1(c)(1) provides that an organization will be regarded as "operated
exclusively" for one or more exempt purposes only if it engages primarily in activities that accomplish one or
more of such exempt purposes specified in Section 501(c)(3) of the Code. An organization will not be so
regarded if more than an insubstantial part of its activities is not in furtherance of an exempt purpose.

Treas. Reg. Section 1.501(c)(3)-1(d)(1)(ii) provides that an organization is not organized or operated
exclusively for one or more exempt purposes unless it serves a public rather than a private interest. To meet the
requirement of this subsection, the burden of proof is on the organization to show that it is not organized or
operated for the benefit of private interests, such as designated individuals, the creator or his family,
shareholders of the organization, or persons controlled, directly or indirectly, by such private interests.

Rev. Rul. 69-175, 1969-1 C.B. 149, describes an organization created to provide bus transportation for school
children to a tax-exempt private school. The organization was formed by the parents of pupils attending the
school. The organization provided transportation to and from the school for those children whose parents
belonged to the organization. Parents were required to pay an initial family fee and an additional annual charge
for each child. The Service determined that "when a group of individuals associate to provide a cooperative
service for themselves, they are serving a private interest."

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In Better Business Bureau of Washington, D.C., Inc v. United States, 326 U.S. 279 (1945), the Supreme Court
of the United States held that the presence of a single non-exempt purpose, if substantial, will destroy a claim
for exemption, regardless of the number or importance of truly exempt purposes.

In New Concordia Bible Church v. C.I.R., 49 T.C.M. (CCH) 176 (1984), the organization wasn't granted
exemption under IRC Section 501(c)(3) because it failed to demonstrate that no part of its net earnings inured to
the benefit of private individuals.

In Community Worship Fellowship v. United States 178 Fed. Cl. 764 (2025), the organization's tax-exempt
status under IRC Section 501(c)(3) was revoked because at least some of its net earning inured to the benefit of
private individuals for their personal use.

# Application of law

IRC Section 501(c)(3) of the Code and Treas. Reg. Section 1.501(c)(3)-1(a)(1) set forth two main tests for an
organization to be recognized as exempt. An organization must be both organized and operated exclusively for
purposes described in Section 501(c)(3). You did not submit an organizing document and therefore fail the
organizational test. Additionally, the dissolution statement you submitted states that the property your facility
sits on will be inherited by E's family if you dissolve and remaining assets will be distributed proportionately
back to donors. Your assets are therefore not dedicated to an exempt purpose as required in Treas. Reg. Section
1.501(c)(3)-1(b)(4).

According to Treas. Reg. Section 1.501 (c)(3)-1(c)(1), you will be regarded as operating for one or more
exempt purposes if you are engaged primarily in activities that accomplish one or more exempt purposes. Your
religious based teaching activities fulfill both religious and educational purposes under Section 501(c)(3).
However, when you dissolve, your property and assets will go to family members and donors which is not in
furtherance of an exempt purpose. Similar to the organizations Community Worship Fellowship v. United
States and New Concordia Bible Church, this results in inurement which precludes exemption under Section
501(c)(3). As noted in Better Business Bureau of Washington, D.C., the presence of a single non-exempt
purpose, if substantial in nature, will preclude exemption under IRC Section 501(c)(3). Like the organization in
Rev. Rul. 69-175, you are serving the private interests of your members. Per Treas. Reg. Section 1.501(c)(3)-
1(d)(1)(ii), you are therefore not organized and operated for exempt purposes because you serve private rather
than public interests.

# Conclusion

Based on the information submitted, you are not organized and operated exclusively for exempt purposes within
the meaning of IRC Section 501(c)(3). You are operated for substantial nonexempt private purposes.
Accordingly, you do not qualify for exemption under IRC Section 501(c)(3).

# If you agree

If you agree with our proposed adverse determination, you don't need to do anything. If we don't hear from
you within 30 days, we'll issue a final adverse determination letter. That letter will provide information on
your income tax filing requirements.

# If you don't agree

You have a right to protest if you don't agree with our proposed adverse determination. To do so, send us a

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protest within 30 days of the date of this letter. You must include:

· Your name, address, employer identification number (EIN), and a daytime phone number

· A statement of the facts, law, and arguments supporting your position

· A statement indicating whether you are requesting an Appeals Office conference

· The signature of an officer, director, trustee, or other official who is authorized to sign for the
organization or your authorized representative

· The following declaration:

For an officer, director, trustee, or other official who is authorized to sign for the organization:
Under penalties of perjury, I declare that I have examined this request, or this modification to the
request, including accompanying documents, and to the best of my knowledge and belief, the request
or the modification contains all relevant facts relating to the request, and such facts are true, correct,
and complete.

Your representative (attorney, certified public accountant, or other individual enrolled to practice before the
IRS) must file a Form 2848, Power of Attorney and Declaration of Representative, with us if they haven't
already done so. You can find more information about representation in Publication 947, Practice Before the
IRS and Power of Attorney.

We'll review your protest statement and decide if you gave us a basis to reconsider our determination. If so,
we'll continue to process your case considering the information you provided. If you haven't given us a basis
for reconsideration, we'll send your case to the Appeals Office and notify you. You can find more information
in Publication 892, How to Appeal an IRS Determination on Tax-Exempt Status.

If you don't file a protest within 30 days, you can't seek a declaratory judgment in court later because the
law requires that you use the IRC administrative process first (IRC Section 7428(b)(2)).

Where to send your protest
Send your protest, Form 2848, if applicable, and any supporting documents to the applicable address:

U.S. mail:

Street address for delivery service:

Internal Revenue Service

Internal Revenue Service

EO Determinations Quality Assurance

EO Determinations Quality Assurance

Mail Stop 6403

550 Main Street, Mail Stop 6403

PO Box 2508

Cincinnati, OH 45202

Cincinnati, OH 45201

You can also fax your protest and supporting documents to the fax number listed at the top of this letter. If you
fax your statement, please contact the person listed at the top of this letter to confirm that they received it.

You can get the forms and publications mentioned in this letter by visiting our website at www.irs.gov/forms-
pubs or by calling 800-TAX-FORM (800-829-3676). If you have questions, you can contact the person listed at
the top of this letter.

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# Contacting the Taxpayer Advocate Service

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that can help protect your
taxpayer rights. TAS can offer you help if your tax problem is causing a hardship, or if you've tried but haven't
been able to resolve your problem with the IRS. If you qualify for TAS assistance, which is always free, TAS
will do everything possible to help you. Visit www.taxpayeradvocate.irs.gov or call 877-777-4778.

Sincerely,
Stephen A. Martin
Director, Exempt Organizations
Rulings and Agreements

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