|
|
Enron Mail |
Jack:
We routinely work with applications that have been "sent to the national office." If an application is "sent to the national office," it means that an issue or issues have been identified in the application by the original reviewing agent that give the agent pause, and which the agent feels a more technical review by a more skilled agent is required. It always means that there is some problem with the application that could result in denial of the application. I suspect that what the IRS would really like your client to do is establish objective standards in your organization's fundamental documents for determining who is to receive the assistance of the charity. Such standards would give the IRS assurance that only poor people would receive the benefits, and make it easier to determine if the mission was being adhered to in an audit of activities. Addressing this concern could be as simple as enacting a Bylaw amendment or more likely an amendment to the Articles of Incorporation. Last year, our office was brought in at the "national office" stage, well after the Form 1024 was filed, to help a group of ranchers and cattlemen in Wyoming/Montana opposed to illegal imports of below cost beef, to obtain trade association status, (501©(6)), that the national office kept trying to deny by saying they were an agriculture organization (which meant potentially less availability of tax deductible contributions under o162). What we did in that case was setup a conference call with the client's lawyers and the IRS national office team assigned to the file. We talked through the application, identified each and every problem the IRS had identified, and then our firm prepared, in essence, a supplemental brief addressing each issue. In the process, we learned that a few minor changes to the Articles of Incorporation and Bylaws, plus the supplemental application information, were enough to address the IRS's agents concerns, and they issued the tax determination letter. Thus, I would suggest that you request a conference call with the national office agent or "team" reviewing the application, and get them to identify each and every concern with the application. Then, ask them for a period of time to respond. Ask them if changes in the fundamental corporate documents would help address their concerns. And of course, be mindful that if you have had ongoing activities, you will want to be sure that anything you do will result in retroactive deductibility for what contributions you have already received. During late 1999, the IRS was accused of responding to political pressure in triggering audits of exempt organizations by the Landmark Legal Foundation, a conservative, Washington, D.C. legal foundation. Landmark did a Freedom of Information Act request and released documents which tended to indicate that the IRS was auditing groups in response to complaints from Congressmen. The IRS denied that political influence plays a role in its decisions, and, since then, the IRS exempt organizations unit has been very careful about not creating an impression that they respond to political pressure. If your client would like our firm to help as a consultant to work with the national office, we'd be pleased to be of assistance. We would need to review the file and have your client execute a Form 2848 Power of Attorney for us to join the team. Hope this is helpful. Best regards, Jim Lacy Wewer & Lacy, LLP CONFIDENTIALITY NOTICE: The information contained in this communication and any accompanying document(s) is protected by the attorney-client and/or the attorney/work product privileges. It is intended for the sole use of the addressee. If the person actually receiving this communication or any other reader of the communication is not the named recipient, or the employee or agent responsible to deliver it to the named recipient, you are advised that any disclosure, copying, distribution, or the taking of any action in reliance upon the communication is strictly prohibited. Any such inadvertent disclosure shall not compromise or be a waiver of any applicable privilege as to this communication or otherwise. If you have received this communication in error, please immediately notify us by telephone at (949) 248-1154, or contact the sender at our email address above. Thank you.
|